What: A Bernstein report reveals that sales at Chinese luxury malls are declining due to oversupply and subdued demand.

Why it is important: The report highlights significant challenges in the Chinese luxury market, including a faltering housing market and economic uncertainties, impacting both consumer behaviour and luxury brand performance.

According to a recent Bernstein report, luxury sales in Chinese shopping malls are experiencing a double-digit decline, attributed to an oversupply of new malls and subdued demand. Despite some offshore spending growth in Japan, Chinese luxury spending has not rebounded to pre-COVID-19 levels. The report points to a faltering housing market as a key factor, with lower real estate prices reducing consumer wealth and increasing savings rates. Bernstein projects a 6% growth for Chinese luxury spending in 2024, assuming market recovery. The report also notes that while mega-brands like Hermès and Louis Vuitton remain stable, others like Gucci and Burberry face significant declines, losing market share to emerging domestic brands.

Oversupply and subdued demand are causing sales declines at Chinese luxury malls