Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Sunday, May 26, 2024

LVMH slowly abandoning Hong Kong as city loses shine for shoppers

LVMH slowly abandoning Hong Kong as city loses shine for shoppers

LVMH is shifting resources out of Hong Kong, reflecting waning interest in what used to be Asia’s premium shopping hub as mainland Chinese consumers switch to shopping at home.
The top global luxury conglomerate wants to focus more of its investment in burgeoning metropolises such as Shanghai, Chengdu, Guangzhou and Shenzhen as Hong Kong loses its relevance in the Greater China region, according to people familiar with the matter, who asked not to be identified discussing private deliberations.

To that end, it’s already moved the regional headquarters of some brands, including the group’s local head office, to Shanghai, and relocated some senior executives to the mainland, the people said.

A spokesperson for LVMH Moet Hennessy Louis Vuitton SE declined to comment and pointed to the company’s recent earnings announcements.

The financial hub has long been a luxury shopping mecca for mainland tourists drawn in by its lower prices and broader array of product offerings. But fortunes took a turn in 2019, when months of anti-government protests kept many visitors away, while the pandemic dealt an even bigger blow with China sealing itself off from the world as part of Covid Zero. Devoid of shoppers, major retailers began shutting stores across Hong Kong’s glitziest retail strips.

For LVMH, which owns brands including Louis Vuitton, Christian Dior and Tiffany & Co., the post-Covid recovery has been much slower in Hong Kong than elsewhere in Greater China, according to one of the people.

The company expects the pivot by Chinese shoppers to buying more domestically to continue, with the portion of total luxury spending that’s done within the mainland expected to almost double from pre-Covid levels, one of the people said. The conglomerate doesn’t break down Greater China sales figures by location in its public results.

LVMH is already reaping the benefits of China’s reopening to the world, with a rush of shoppers unleashing a massive wave of spending that boosted sales and pushed shares to a record this month. The country’s bullish longer-term prospects have made moving closer to the major growth market increasingly attractive, and some of the biggest names in luxury have already been expanding their presence in the mainland.

That’s spurred the rise of shopping centers like the duty-free island of Hainan and the gambling hub of Macau, which are likely to further erode Hong Kong’s significance.

Duty-free sales in Hainan more than tripled to 49.5 billion yuan (US$7.2 billion) in 2021 from 2019, according to Bloomberg Intelligence analysts Angela Hanlee and Rebecca Wang. Even during last year’s Covid Zero chaos, sales were still more than twice the size of pre-pandemic levels, and the island province is well-positioned to benefit from policies to boost onshore spending in China, they said.

Hong Kong’s neighbor, Macau, is also emerging as an up-and-coming luxury destination able to offer cheaper prices as well as a broader holiday experience for mainland Chinese tourists. The gambling hub’s visitor arrivals recovered to about 62 percent of 2019 levels over this month’s Easter holiday — versus 44 percent for Hong Kong — building on a tourism boom during January’s Lunar New Year break.
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×