Daily Times

On the southern Chinese island of Hainan, a duty-free shopping paradise, mainland tourists keen to splurge will often patiently line up for an hour or more to enter a Gucci, Tiffany or other luxury brand store.

“I’m mentally working on a shopping list,” says Zeng Rong, 34, a Beijing-based auditor who is looking forward to her upcoming Hainan trip. “I’d like to buy a Bottega Veneta bag as well as a coat and a down jacket from Moncler before the weather gets cold.”

With the coronavirus pandemic having sent most of the world’s luxury spending into a tailspin and China the only major economy expected to show growth this year, high-end brands now depend more than ever on Chinese consumers like Zeng for sales.

Their spending largesse, which extends across China’s biggest cities, is spurring luxury brands to double down on the Chinese market – embracing e-commerce and pushing ahead with store openings whereas in most other countries such plans have been postponed or scaled down.

Lavish events are also back. Louis Vuitton menswear designer Virgil Abloh held a Spring/Summer fashion show before a live audience in Shanghai last month. Prada hosted private viewings of its new collection last week – also in Shanghai, the country’s fashion capital which has begun to replace Hong Kong as the favoured shopping haven for domestic tourists. Driven by well-heeled consumers forsaking their usual overseas trips to places like Milan and Paris as well as pent-up demand that built during lockdown, spending in China on luxury goods has surged.

Prada has said the group’s China sales jumped 60% in June and 66% in July, while LVMH noted that in some weeks since March when the country came out of lockdown, Louis Vuitton and Dior have seen China sales more than double.

“Mainland China has become the place where all the purchase power is trapped,” said Mauro Maggioni, Asia Pacific CEO at Italian luxury sneaker and apparel brand Golden Goose which has 21 stores in mainland China. It also opened stores on China’s top e-commerce sites last month and plans a new shop in Hainan soon.