The sales are being offered primarily by aspirational brands such as Versace and Burberry, as China’s once-voracious middle-class consumers become more frugal.
| Luxury goods are being discounted at rates as high as 50 per cent in China as middle-class shoppers rein in spending on big-ticket items and retailers grapple with overstocking.
Average reductions on Versace and Burberry products in China across all distribution channels reached, and in some cases exceeded, 50 per cent in 2024, up from 30 and 40 per cent in 2023, respectively, according to Luxurynsight. Top-tier labels such as Louis Vuitton, Hermès and Chanel, which have been more resilient across regions and target higher spenders, have maintained stronger control on distribution and avoided discounts.“Chinese consumers couldn’t go anywhere, so they shopped domestically, no matter how much you charged,” said Veronica Wang, partner at consulting firm OC&C in Hong Kong.
The e-commerce platforms have been particularly aggressive with pricing. “Platforms don’t own the brands, and so they are purely focused on commercial performance. When the market is bad it is easy for them to just offer discounts,” said Ms Wang. Some luxury brands are also suffering higher return rates as shoppers take advantage of online promotions that require them to spend a specific sum to unlock a discount. At Marc Jacobs, return and cancellation rates in China went from 30 per cent in 2023 to 40 per cent in 2024, while at Brunello Cucinelli they increased from 59 per cent to 69 per cent in the same period, according to Luxurynsight.
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