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China<\/b>, which until recently accounted for a substantial share of global sales of luxury goods, is experiencing a notable slowdown<\/b>. This turnaround is attributed to various factors, including the real estate crisis and anti-corruption<\/b> policies discouraging ostentatious displays of wealth. As a result, big names in luxury goods, such as Burberry and Kering, are experiencing significant declines in sales<\/b> in this key market.<\/p>\n
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Strategic errors<\/b> have been made by some major luxury manufacturers. Faced with slowing demand in China and the United States and declining sales volumes, several manufacturers have raised their product<\/b> prices.<\/p>\n
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This strategy,<\/b> known as \u201cpremiumization\u201d<\/b>, has been used by Herm\u00e8s<\/b>, which raised its prices by around 9% at the beginning of the year<\/b>. However, this strategy has proven ineffective for more affordable brands such as Gucci<\/b> (a subsidiary of Kering) and Burberry<\/b>, which have seen a significant drop in sales.<\/p>\n
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The observed trend has led to a decrease in the customer base<\/b>, as highlighted by the Bain & Company study, which estimated that 50 million<\/b> customers have been lost since 2022<\/b>. The high prices charged by leather goods brands<\/b> (3,000 euros for a cotton Dior bag, more than 5,000 euros for a Hermes tote bag, etc.) have deterred members of Generation Z<\/b>, i.e. people under the age of 35, whom they had managed to attract, particularly in China.<\/p>\n
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Faced with unemployment, they are now more thrifty. 40% of luxury sector customers consider the prices charged to be excessive<\/b>. It is therefore imperative that brands re-examine their offerings.<\/p>\n
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