Chinese customers queueing up for a luxury brand at a shopping mall in Shanghai on August 30, 2020. Photo: Chen Xia/GT

 

Offline consumption saw a strong rebound during the May Day holidays in Shanghai compared with last year when the COVID-19 epidemic curbed brick-and-mortar store consumption, with consumption of luxury products increasing significantly. 

Statistics from the Shanghai Municipal Commission of Commerce showed that luxury products, cosmetics and automobiles saw significant growth during the five-day holiday with luxury goods shops maintaining high-speed growth (62.8 percent year-on-year) after the second May Day shopping festival is held to boost domestic consumption in Shanghai following the success of last year's festival.

Statistics from the Shanghai Consumer Market Big Data Laboratory shows offline consumption in the city reached 19.65 billion yuan ($3.04 billion) between April 30 and May 4, increasing by 30.4 percent from 2020 and 9.6 percent from 2019. 

The statistics also echoed the performance of the world's leading luxury groups which all reported strong Q1 revenue rebounds largely driven by strong sales rebounds in the Chinese market. 

The world's largest luxury conglomerate, LVMH, which possesses multiple luxury brands including Louis Vuitton and its recently-acquisitioned US luxury jeweler Tiffany & Co, realized a 13.96-billion-euro Q1 revenue, up 32 percent year-on-year, mainly due to strong sales redounds in the Chinese and American markets. 

Meanwhile, Q1 revenue of Gucci's parent company, France Luxury Group Kering, returned to its pre-epidemic level with its Q1 revenue increasing by 21.4 percent from 2020 and 5.5 percent from 2019. 

Such a strong comeback was also largely prompted by strong rebounds of consumptions in the Chinese market. Bernstein's analyst Luca Solca wrote in a report that "to reignite young Chinese consumer interest for the brand" is "exactly the kind of thing Gucci should do."

A salesperson at a luxury handbag store on Nanjing Road West in Shanghai told the Global Times on Thursday that sales of the store during May Day holidays were satisfactory, especially during the first three days of the holiday. 

"Sales statistics of our store during this holiday increased compared with the same period last year and also increased from 2019. As far as I know, almost all luxury bands saw their sales rebound this holiday," the salesperson said under the condition of anonymity. 

A 27-year-old consumer surnamed Li at the store told the Global Times that she thinks consumers' consumption desire of luxury brands still depends on their real demands rather than previous suppressed desires due to the COVID-19 epidemic, but she also believes the alleviated epidemic situation can be contributed to the increase in luxury consumption. 

In other parts of the country such as South China's Hainan Province, shopping tourism continued to boom over the holiday since China rolled out a new tax rebate policy on the island last July, with overseas luxury product shopping unrealistic. 

Statistics from the Haikou Customs show that 993 million yuan of duty-free shopping on the islands were supervised by the authority between May 1 and 5, up 248 percent year-on-year.