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Tag: luxury goods

  • Ralph Lauren Asia Revenue Surges 28% to $571 Million

    Ralph Lauren Asia Revenue Surges 28% to $571 Million

    Ralph Lauren Corporation reported a 28 percent surge in Asia revenue to $571 million for the second quarter of Fiscal 2027, outpacing all other international operating divisions.

    Regional comparable store sales climbed 24 percent during the quarter, driven by a 23 percent rise in brick-and-mortar locations and a 31 percent jump in digital commerce.

    Group-wide net revenue grew 9 percent on a reported basis to $2.2 billion, prompting the New York-based fashion house to raise its full-year outlook on November 5, 2026.

    Mainland China Drives Regional Outperformance

    Mainland China revenue climbed more than 35 percent on both a reported and constant-currency basis, defying broader luxury sector softness across top-tier shopping malls. New retail real estate supported the volume, including a standalone shop at Beijing’s Hopson One shopping center, alongside existing city footprints.

    The company opened 22 new owned and partnered stores during the quarter, deploying capital into physical formats while introducing localized digital infrastructure. In Japan, Ralph Lauren deployed a dedicated brand mobile application designed to capture consumer transactions directly, avoiding third-party marketplace commissions and capturing customer data.

    Brand momentum across the wider territory leaned heavily on localized marketing campaigns. Direct consumer activations included hosting a documentary screening event in Seoul and styling pop group BTS during appearances at MetLife Stadium, while global properties such as the Wimbledon and U.S. Open sponsorships retained high traction among affluent Asian travelers.

    Full-Price Disciplines and Margins

    Direct-to-consumer average unit retail rose 9 percent across the global store network, driven by full-price transactions and product mix improvements across women’s wear and leather accessories. Adjusted gross margin reached 70.5 percent, up 250 basis points, aided by cheaper raw material expenses and favorable geographic distribution.

    Reported gross margins widened even faster, jumping 620 basis points to 74.2 percent, though that figure incorporated non-recurring duty refunds received during the period. Inventory holdings finished the quarter down 9 percent at $1.2 billion, giving regional commercial managers leaner backrooms heading into peak winter promotions.

    Ralph Lauren Chief Executive Officer Patrice Louvet pointed to structural demand across geographic divisions during the company’s results presentation. “Through a dynamic global operating environment, we continue to invest in the strategic priorities that are bringing our _Next Great Chapter:_ _Drive_ plan to life, strengthening our brand desirability and delighting multi-generational customers in every geography around the world to drive sustainable long-term growth and value creation. We remain confident in the strength of our brand, our teams and our diversified engines of growth through this fiscal year and beyond.”

    Divergence from Western Markets

    Asia’s performance provided essential operating insulation against sluggish retail activity in mature Western economies. North American revenues grew 6 percent to $885 million, aided by an early wholesale inventory delivery schedule, while European revenue edged up just 1 percent to $696 million as brick-and-mortar store comps fell 4 percent.

    For retail landlords and franchise partners throughout East Asia, Ralph Lauren’s results demonstrate durable middle-class appetite for heritage American prep aesthetics when combined with localized luxury positioning. Ralph Lauren broadened high-potential lines including outerwear and its new Polo Blaze leather collection, lifting sales in those sub-segments by low double digits.

    Regional margin strength sits against immediate supply chain and macro risks. Sourcing shifts, currency swings, and trade friction remain liabilities for global fashion houses importing western-designed apparel lines into Asian retail malls, even as regional operating margin widened to 27.4 percent despite a 10 basis point foreign exchange hit.

    Fiscal Trajectory and Capital Deployment

    The second-quarter acceleration extends an operational playbook begun under the group’s Drive strategic framework, which shifted resources toward core apparel lines and Tier 1 Asian cities over the past two fiscal years. In the second quarter of fiscal 2026, Ralph Lauren generated diluted earnings per share of $3.32 on a reported basis and $3.79 on an adjusted basis, trailing the $4.87 and $4.64 recorded in the current period.

    Shareholder returns drained cash balances through planned repurchases. The company bought back $250 million of Class A common stock during the quarter, bringing year-to-date buybacks to $500 million and completing its approved repurchase authorization for fiscal 2027 while preserving $1.8 billion in cash reserves and short-term holdings against total debt of $1.2 billion.

    Looking toward the holiday trading cycle, Ralph Lauren expects third-quarter group constant-currency revenue growth to moderate between 3 percent and 4 percent as wholesale delivery timing pulls revenue forward. Investors and regional commercial partners will watch whether mainland China’s 35 percent growth pace holds through the Lunar New Year trading window, when full-price retail traction faces its steepest seasonal test.

  • Live2.ai and Rotoris Raise Fresh Capital Across Indian Tech and Retail

    Live2.ai and Rotoris Raise Fresh Capital Across Indian Tech and Retail

    This week, Indian luxury watchmaker Rotoris raised ₹70 crore (around $8.5 million) in a Series A funding round led by Blume Ventures to expand production and presence in India and overseas.

    Participation came from 9Unicorns and Centricity, which pooled backing from family offices including BlackRock global head of data Diwakar Goel, former Coca-Cola Asia Pacific group president Atul Singh, and Adhiraj Burman of the Dabur family. Actor Rannvijay Singha also invested.

    Alongside consumer brands, enterprise AI and trading platforms secured capital during the same period, led by Live2.ai’s ₹130 crore pre-Series B round from IvyCap Ventures and Mochatrade’s $5.5 million seed round.

    Luxury Manufacturing and Domestic Assembly

    Rotoris will direct the Series A proceeds toward research and development, expanded factory output, and physical store placement across India and international markets. The watch label competes in a premium segment historically dominated by Swiss and Japanese imports, where homegrown brands usually struggle to establish mechanical credibility.

    Consumer discretionary spending across India has tilted toward high-margin domestic design labels over the past two years. Investors back local manufacturing because retail shelf economics favour domestic assembly when import duties on finished Swiss timepieces stay elevated.

    Nutritional Brands Draw Fresh Cheques

    Packaged nutrition company Ace Blend raised 9.91 million dollars in a Series A2 round led by 3one4 Capital. Existing institutional investor Fireside Ventures provided follow-on capital for the transaction.

    Ace Blend plans to allocate the capital toward proprietary ingredient research, factory supply chain integration, and a wider product catalogue across health channels. The brand sells directly to consumers online while placing packaged dietary supplements into modern trade grocery chains and pharmacy networks.

    Enterprise Software and Retail Logistics

    B2B manufacturing platform Venttup secured 3 million dollars in pre-Series A funding led by Zerodha investment arm Rainmatter and Unicorn India Ventures. The engineering business runs digital supplier networks that supply precision parts to industrial clients and consumer hardware assemblers.

    Venttup plans to recruit additional design engineers and deploy artificial intelligence tools that benchmark component sourcing costs across India. The firm also plans to build fast prototyping centres to serve physical hardware makers trying to bypass Chinese vendor dependency.

    International Expansion and Trading Engines

    Software developer Live2.ai raised 130 crore rupees in pre-Series B capital led by IvyCap Ventures, combining fresh equity with secondary share sales to provide early liquidity to initial investors. The software vendor intends to sell its automated conversational agent platform to enterprise retail and commercial clients across North America, Europe, and Asia-Pacific.

    Retail-facing fintech operator Mochatrade closed a 5.5 million dollar seed round led by CoinFund, with backing from Coinbase Ventures and Zero Knowledge Ventures, while earlier backers include Y Combinator and Pioneer Fund. Mochatrade built a transaction engine aimed at Indian retail investors buying US-listed equities, pre-IPO equity contracts, and options, subject to regulatory clearances from domestic capital markets authorities.

  • Casio Announces Release of CMK-100 Mechanical Watch

    Casio Announces Release of CMK-100 Mechanical Watch

    Casio Computer Co., Ltd. Announced on Oct. 29, 2026, that it will release the CMK-100, an automatic mechanical timepiece featuring a lightweight titanium case and 10-bar water resistance.

    The Tokyo company created the model in response to rising demand for mechanical watches, targeting everyday and business wear.

    Five versions comprise the release, offering black, gray, and brown dials matched with titanium, nylon, or leather bands.

    Titanium Specs and Pricing Across Five References

    Each model in the CMK-100 family uses a lightweight titanium case with a hairline finish across the body and bezel, paired with a sapphire crystal and 100 meters of water resistance. Power comes from an automatic mechanical movement manufactured in Japan. The dials feature a matte texture intended to suppress reflection, anchored by raised indexes treated with multiple layers of phosphorescent paint for night visibility.

    Retail pricing splits across three strap configurations. The entry model, the CMK-100TC-1A on a black nylon strap, sells for $320. Two mid-tier variations, the CMK-100TCC-8A on grey nylon and the CMK-100TL-1A on black Italian leather, retail at $350 each. A brown Italian leather version designated CMK-100TCL-5A carries a $375 price tag, while the flagship CMK-100TD-1A with a solid titanium bracelet tops the catalog at $440.

    Challenging Competitors on Department Store Shelves

    Casio is putting mechanical movements inside titanium cases at competitive price points. By pricing titanium automatics below $450, Casio undercuts many comparable Japanese and Swiss mechanical field watches that trade on heritage rather than aggressive bill-of-materials value.

    For watch retail buyers and multi-brand department store operators across the region, the launch creates a margin challenge. Casio built its distribution scale on high-volume G-Shock and standard digital quartz lines that require minimal customer education. Selling mechanical timepieces forces sales clerks to pitch power reserves, sweep seconds, and automatic winding against entrenched mechanical catalogs.

    The Transition Out of Digital Resin

    The CMK-100 marks Casio’s second deliberate step into mechanical movements after decades of relying on quartz modules. The company tested consumer appetite for winding gears earlier in 2026 with the Edifice EFK collection, an integrated sport-watch series that introduced Casio’s first automatic calibres to market.

    The CMK100 is Casio’s response to the overwhelming demand of our introduction into the automatic timepiece category

    Said Shermeen Greenmun, vice president of timepiece at Casio America, framing the new line as a field watch designed for outdoor exploration and daily wear.

    Retail Rollout Begins in November

    Stock arrives at select physical retailers, Casio’s direct e-commerce portals, and the dedicated G-Shock Soho storefront in November 2026. The initial retail reception across North America and key Asian consumer hubs will determine whether Casio expands automatic calibres into its core resin-shock lineups next year.

  • Luxury Goods Market to Reach $610.4 Billion by 2032 as Asia-Pacific Leads Growth

    Luxury Goods Market to Reach $610.4 Billion by 2032 as Asia-Pacific Leads Growth

    Asia-Pacific luxury goods spending will expand at a compound annual rate of 5.2 percent between 2027 and 2032, outpacing every other global region as total market value heads toward USD 610.4 billion.

    Europe retained 51.82 percent of worldwide luxury turnover in 2026, but Asian demand is shifting the commercial priorities of major European fashion conglomerates. Global luxury sales stood at USD 484.2 billion in 2026, climbing to USD 505.1 billion in 2027. While mature Western markets cope with cautious shoppers, regional retail networks across China, Japan, and Southeast Asia are taking a larger share of capital expenditure.

    Clothing and apparel anchored the sector with a 36.93 percent market share in 2026. Hard luxury, led by specialist watchmakers, is projected to deliver the quickest category expansion at 4.2 percent through 2032. Women drove 55.93 percent of total luxury revenue in 2026, though menswear is advancing at a 4.25 percent annual rate. Single-brand boutiques controlled 38.16 percent of retail sales in 2026, but dedicated online channels are forecast to expand at 4.75 percent annually through 2032.

    Prada and Hermès Expand Regional Footprints

    Prada Group generated a 15 percent jump in Asia-Pacific retail sales during the first half of 2026 compared with the first half of 2025. Stripping out the acquisition of Versace, organic regional retail turnover grew 6 percent at constant exchange rates. The flagship Prada label maintained positive momentum through the second quarter, while Miu Miu recorded steady volume gains across the half.

    Rival Hermès logged EUR 4.53 billion, or USD 5.11 billion, in 2025 revenue from its combined ready-to-wear and accessories division, a 6 percent gain at constant currency. Leather goods and saddlery sales rose 13 percent, supported by added workshop capacity. Chanel followed a parallel path by opening more than 40 standalone boutiques in 2025, directing a substantial portion of those doors into Mainland China, Japan, and the Middle East.

    Compagnie Financière Richemont saw its specialist watchmaker division post an 8 percent revenue gain at constant exchange rates in the three months to June 2026, led by sales in Japan and the Americas. The group’s jewellery division, housing Cartier and Van Cleef & Arpels, generated a 14 percent sales increase during the fiscal year ended March 31, 2026.

    Direct Store Ownership Shifts Margin Control

    The operational divide between company-owned flagships and third-party wholesale accounts is hardening across Asian shopping districts. LVMH Moët Hennessy Louis Vuitton operated approximately 2,300 dedicated fashion and leather goods boutiques worldwide at the close of 2025. Direct store ownership shields retail margins from intermediary markdowns and maintains rigid presentation standards in premier Asian malls.

    Wholesale distribution carries severe legal boundaries when brands attempt to dictate shelf pricing. The European Commission fined Kering’s Gucci, Richemont’s Chloé, and Loewe in October 2025 for illegal resale-price restrictions imposed on independent distributors across Europe. Those distribution curbs ran until April 2023, barring stockists from discounting apparel, shoes, and leather goods. Luxury houses operating in Asia face a clear operational tradeoff: independent retail partners deliver fast geographic distribution, but houses sacrifice pricing authority over the final consumer ticket.

    Digital channels are simultaneously consolidating around high-spending clients rather than broad web traffic. Online platform Mytheresa increased net sales by 11.5 percent at constant exchange rates in fiscal 2026, while expanding its top-tier customer base by 18 percent during the fourth quarter. Direct consumer relationships allow brands to defend price points without depending on wholesale clearance mechanisms.

    Regulatory Pressures and Supply Checks Tighten

    Supply chain scrutiny is forcing luxury groups to alter how they produce and verify garments sold in Asian commercial hubs. LVMH instituted supplier audits, work-in-progress monitoring, and on-site factory visits in 2025 following public scrutiny over labor practices within Italian manufacturing hubs. Across its operations, recycled materials reached 41 percent of product and packaging inputs in 2025, including circular cashmere projects at Loro Piana.

    Apparel importers into Mainland China face tightened quality-safety rules and mandatory merchant inspections under standard GB 18401-2010, alongside expanded fiber measures starting July 1, 2026. Chinese authorities require sellers to inspect incoming inventory and store compliance documentation for at least two years. The regulatory duty contrasts with the United States, where the Federal Trade Commission permits invoice-level fiber disclosures without requiring dedicated per-unit verification checks.

    Anti-counterfeit enforcement remains a constant operational friction point for Asian distribution networks. The European Anti-Fraud Office concluded an enforcement operation in May 2025 that netted 1.8 million counterfeit garments, footwear pieces, and leather accessories hidden within legitimate textile shipments. Illicit goods mixed into lawful trade flows drain brand equity while complicating customs clearance for verified fashion houses.

    Divergence Across Global Spending Hubs

    The acceleration of luxury demand in Asia contrasts sharply with contractions in the Middle East. Military operations involving the United States, Israel, and Iran in early 2026 reduced the Gulf luxury consumer base by 15 to 25 percent. Richemont saw sales in the Middle East and Africa slide 3 percent at constant currency during the quarter ended March 31, 2026, hurt by suppressed tourist traffic and cautious domestic spending.

    Consumer demand is dividing by income tier. A survey of aspirational luxury clients conducted across 11 key markets in 2026 revealed that every respondent classified as an infrequent, price-sensitive buyer planned to trim personal spending over the subsequent 12 months. An additional 22 percent of regular luxury shoppers planned to reduce transaction ticket sizes, trading down within product collections.

    Luxury brands are directing product development toward ultra-affluent shoppers who remain insulated from inflationary pressures. Global personal wealth grew 10.8 percent in dollar terms during 2025, adding 440,000 millionaires in the United States alone. Capturing these shoppers requires extensive boutique investments in prime metropolitan locations rather than broad distribution through department store counters.

    The next test for luxury retail performance arrives on July 19, 2026, when the European Union’s statutory ban on destroying unsold garments and footwear takes effect for large corporations, directly reshaping how fashion houses clear seasonal stock across their international supply chains.

  • LVMH Loses $167 Billion in Value as Chinese Shoppers Cut Handbag Spending

    LVMH Loses $167 Billion in Value as Chinese Shoppers Cut Handbag Spending

    LVMH has lost more than $167 billion in market value this year as Chinese consumers pull back from expensive handbags, cutting group valuation by more than half from its peak above $500 billion.

    The selloff exposes the conglomerate’s heavy concentration in a single division and a single region, with Asia excluding Japan generating 35 percent of Fashion and Leather Goods revenue in 2025.

    Fashion and Leather Goods accounts for roughly three-quarters of recurring operating profit across LVMH’s 75 brands. UBS estimates the flagship Louis Vuitton label alone generates more than half of divisional earnings. Chinese shoppers account for nearly a third of all fashion and leather sales, leaving group performance tightly bound to domestic sentiment in mainland China.

    Bernard Arnault, the 77-year-old chairman and chief executive whose family controls 65 percent of voting rights through Agache, faces a market where the pricing power of the past five years has stalled. Average luxury prices rose 54 percent between late 2019 and September 2024, according to HSBC estimates. While that strategy lifted group revenue from €54 billion in 2019 to €86 billion in 2023, shoppers in Asia are no longer absorbing further price increases for coated canvas and leather.

    Mainland luxury market contracts for two straight years

    China’s personal luxury goods market shrank between 18 percent and 20 percent in 2024, followed by an additional decline of 3 percent to 5 percent in 2025, according to Bain estimates. Leather goods suffered the steepest drops, falling between 8 percent and 11 percent last year. Real estate weakness and employment concerns have eroded consumer confidence, while local fashion labels have gained market share by emphasizing cultural relevance.

    Consumer budgets are shifting rather than disappearing entirely. A 2026 survey by Oliver Wyman found 37 percent of affluent Chinese consumers plan to increase spending on prestige beauty, compared with just 4 percent planning higher spending on leather goods. L’Oréal recorded 10 percent revenue growth for its Luxe division in China during its latest reported quarter, while Compagnie Financière Richemont reported a 14 percent sales rise at constant currency for jewellery brands Cartier and Van Cleef & Arpels in the year to March.

    Rivals test price cuts while Vuitton protects margins

    Rival luxury groups are responding with aggressive regional pricing adjustments. Gucci reduced prices by 20 percent to 30 percent across several handbag collections to recruit entry-level customers, while Chanel rolled out smooth-leather accessories positioned below its signature quilted lines. Chanel lifted first-half comparable sales by about 16 percent following the adjustments.

    LVMH has resisted broad price reductions, choosing instead to invest in store upgrades and creative turnover at Dior and Loro Piana. Bernstein calculations indicate a hypothetical €1,350 entry-level Vuitton bag could generate €440 million in incremental revenue and boost divisional unit volume by 5 percent, even if average selling prices drop 1.8 percent. For now, the group relies on North America to offset Asian weakness, with Jefferies forecasting 5 percent growth in US fashion sales against a 10 percent contraction across its Chinese customer base in the third quarter.

    Local missteps add friction in mainland malls

    Brand perception in China has faced additional scrutiny. A trademark dispute in which Louis Vuitton successfully sued Shenzhen-based drinks chain Molly Tea over a floral pattern triggered public backlash from state media and social network users, who argued the design stemmed from traditional Chinese heritage. Jefferies reported the controversy caused a measurable drag on Vuitton’s mainland store sales.

    Direct acquisitions of Western luxury houses offer little help because LVMH’s current revenue base is too large for mid-sized European brands to move group earnings. Competitors have turned to minority equity investments in local players: Kering took a minority holding in Shanghai-based ICICLE parent ICCF, while L’Oréal backed domestic Chinese fragrance companies To Summer and Documents to tap shifting consumer taste.

    Earnings multiple resets to five-year lows

    The structural shift follows five years of rapid expansion that ended late in 2024, when LVMH posted its first quarterly revenue contraction since 2020. Divisional sales in Fashion and Leather Goods dropped 1 percent in 2024 and slipped another 5 percent in 2025, breaking an operating margin run that had peaked at 26.5 percent.

    Equity markets have adjusted valuations accordingly. LVMH trades at roughly 16 times forward earnings, down from 24 times at the start of the year, as institutional investors wait for third-quarter earnings figures to determine whether Chinese cluster sales can stabilize before year-end.

  • Mainland Chinese Tourists Flock to Hong Kong Trails as Spending Slows

    Mainland Chinese Tourists Flock to Hong Kong Trails as Spending Slows

    Mainland Chinese visitors to Hong Kong are shifting away from luxury retail centers toward outdoor hiking trails as tighter household budgets curtail discretionary travel spending.

    The change redirects footfall away from prime shopping districts in Tsim Sha Tsui and Causeway Bay into natural landmarks across the territory.

    Shift Toward Low-Cost Outdoor Sites

    Popular natural destinations across the city are experiencing heavy foot traffic from mainland travelers seeking low-cost itineraries. Visitors now gather at spots like the Hong Kong UNESCO Global Geopark, known for its 140-million-year-old hexagonal volcanic rock formations and coastal sea stacks. Travelers such as Apple Yang squeeze past more than a dozen hikers specifically for outdoor photography and nature walks rather than traditional shopping excursions.

    This behavioral pivot reflects ongoing pressure on consumer confidence and household budgets across mainland China. Rather than purchasing luxury fashion, cosmetics, and jewelry, younger visitors prioritize experiential travel that requires minimal direct retail spending.

    Impact on Hong Kong Retail Landlords

    For Hong Kong landlords and retail operators, the change in visitor preferences alters revenue models that historically relied on high mainland spending per capita. Duty-free shopping and luxury brand boutiques no longer command the automatic footfall from cross-border tourists that defined previous tourism cycles. High-street landlords face pressure to adjust tenant mixes toward dining, sports gear, and convenience retail rather than relying exclusively on high-end fashion houses.

    Outdoor apparel brands and convenience operators stand to capture the remaining spend as hikers buy equipment, hydration, and day-to-day food supplies. The total basket size per visitor remains far below historical levels seen during peak retail spending years.

    Broader Consumer Spending Patterns

    Similar consumer belt-tightening has reshuffled travel destinations across East and Southeast Asia, where Chinese tourists consistently seek lower-cost activities and dining over luxury purchases. Retailers in destination cities have had to lower margin expectations and pivot toward value-oriented promotions to capture cautious spenders. The structural shift toward budget-conscious travel shows that cross-border visitor volumes do not directly translate into equivalent retail sales growth.

    Hong Kong retail sales figures and border crossing tallies in the coming quarters will demonstrate whether domestic consumption can offset the decline in luxury spend from mainland tourists.

  • Luxury Evermore Flags Cloned Chanel Serial Code Found 127 Times Across 36 Countries

    Luxury Evermore Flags Cloned Chanel Serial Code Found 127 Times Across 36 Countries

    Singapore resale platform Luxury Evermore found a single Chanel serial code repeated 127 times across 36 countries in its authentication database, exposing widespread counterfeit production.

    The code, 10218184, showed up on multiple bag models submitted to the firm’s free authentication screening tool, directly contradicting the brand’s rule that each code belongs to one specific bag.

    Database Flags Cloned Code

    Submissions came through Luxury Evermore’s consumer review service, which screens pre-owned luxury items to weed out fakes in the secondary market. Counterfeiters routinely duplicate legitimate serial strings because they lack access to internal luxury brand databases.

    “There are specific patterns and details on these tags that are very difficult to replicate,” Luxury Evermore founder Mingchuan Tian said. The company noted that while a single code match does not automatically prove a bag is fake, any pre-owned piece bearing the 10218184 string requires physical inspection before purchase.

    Shift to Microchip Authentication

    Chanel changed its authentication architecture in 2021, replacing physical authenticity cards and interior sticker tags with embedded microchips and metal plaques. Bags made before that transition remain heavily traded across Asian consignment platforms, leaving older serial numbers exposed to industrial-scale cloning.

    Secondary luxury platforms across Southeast Asia and East Asia face rising costs as authentication moves from simple serial checks to multi-point material inspections. As counterfeit operations replicate physical tags across multiple product lines, resale operators are tightening screening protocols on legacy inventory to protect platform credibility.

    Resellers tracking the 10218184 code are now screening pre-2021 inventory for matching batch anomalies across regional intake hubs.

  • Massive fake luxury goods ring shut down in Vietnam

    Massive fake luxury goods ring shut down in Vietnam

    Government authorities have raided a warehouse storing thousands of fake luxury goods in Lao Cai City, northern Vietnam, which were being sold online.

    The 10,000sqm warehouse was divided into several areas including rooms for selling fake luxury goods via live-streaming on Facebook. Most of the items are copies of major brands including Gucci, Chanel, Nike and Adidas.

    One of the employees from the warehouse admitted that there were more than 40 people processing orders during the live-streaming and some 1000 packages being shipped each day.

    Although the exact number of fake goods smuggled from China has yet to be confirmed, authorities discovered the ring sold more than 90,000 products each month at a profit of around US$432,000.

    An official said the ring was professionally organised and took advantage of online platforms for both wholesale and retail as online shopping has become increasingly popular in Vietnam.

  • Global luxury goods sales drop: Bain

    Global luxury goods sales drop: Bain

    New data from Bain & Company shows global luxury goods sales will struggle to maintain growth, as the US-Sino trade war and other geopolitical events impact on consumer confidence.

    In June, Bain said the personal luxury goods market was “on a tear” this year and would grow by between 6 per cent and 8 per cent at constant exchange rates to reach €276-281 billion. It said the market could reach €390 billion globally in sales by 2025.

    But now, Bain has released a more tepid projection of €260 billion and a growth rate of 5 per cent this year.

    It has pared back its 2025 projection of personal luxury goods sales to €320-365 billion, slashing €35 to €70 billion off its forecast in just five months.

    And it cautioned that even this figure may be under threat saying “socio-political issues, commercial policies, and potential short-term soft recessions could make this road to growth a bumpy one in the short term”.

    The Bain & Company Luxury Study was released in Milan in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.

    In June, Bain said Mainland China is expected to account for the lion’s share of growth this year. “We forecast this market to grow by 20-22 per cent … Brands are learning how to cater to local consumers, often young and heavily influenced by social media.”

    China kept close to its projections, rising 20 per cent, albeit with the year still not over.

    “Chinese consumers are leading the positive growth trend around the world. Between 2015 and this year, their purchases in Mainland China contributed twice as much growth as their spending abroad. Their share of global spending has continued to rise (now estimated at 33 per cent of global luxury spend, up from 32 per cent in last year), while the share of Mainland China has also risen to 9 per cent (up from 8 per cent in last year). In Mainland China, luxury sales grew 18 per cent at current exchange rates to €23 billion (20 per cent at constant exchange rates), driven by rising demand rather than by price increases,” the report said.

    Claudia D’Arpizio, a Bain partner and lead author of the study, said luxury purchases in Japan softened slightly this year, pushing brands to find new solutions to bring consumers back to stores. However, retail sales still grew at 3 per cent at current exchange rates to €22 billion. “Increased consumption from tourists in Japan is prompting brands to rethink their distribution models.”

    Across the rest of Asia retail sales grew 7 per cent at current exchange rates to €39 billion, due to dynamic growth in South Korea, driven by strong local consumption. Brisk growth in other Asian countries – Singapore, Thailand and Taiwan – also contributed while Hong Kong and Macau benefitted from Chinese purchases.

    Europe lagged in 2018 due to a strong Euro that impacted tourists’ purchasing power. Local consumption was positive overall, despite mixed country performance, helping to boost retail sales 1 per cent at current exchange rates to €84 billion.

    The Americas grew 5 per cent at current exchange rates to €80 billion. “A positive US economy boosted disposable income and overall luxury spending from locals, even as brands remained wary of continued economic prosperity,” the report said. “However, the strong dollar impacted tourists’ spending from Asia and Latin America. Canada and Mexico were strong players in the region, while political uncertainties derailed Brazil’s performance.”

    In other areas, there was nil growth, holding at €12 billion, mainly due to stagnation in Middle East brought on by a recent government spending restriction.

    Luxury online

    The retail channel grew 4 per cent this year, with three-quarters coming from like-for-like sales growth. Wholesale channels grew at only 1 per cent, brought down by high-end department stores still trying to recover, and a slow-down among specialty stores facing tough competition from online.

    Luxury shopping online continued to accelerate this year compared with physical channels, growing 22 per cent versus 2017 to €27 billion.  The US market made up close to half of online sales – 44 per cent– but Asia is emerging as the new growth engine for luxury online, slightly ahead of Europe. Accessories remained the top category sold online, ahead of apparel; beauty and hard luxury (jewellery and watches) were both on the rise.

    Brands are catching up to other online players, comprising 31 per cent of sales, compared to e-tailers (39 per cent) and retailers (30 per cent).

    “New technologies are at once enriching the online and mobile shopping experiences, while potentially putting role of physical channels at risk,” said Federica Levato, a Bain partner and co-author of the study.

    “The luxury store-opening path is slowing down, leading to channel consolidation in the future. Brands must therefore rethink their physical channels and evolve their role from point-of-sale to point-of-touch, and use new technology to enhance customers’ in-store experiences.”

    Luxury consumers getting younger

    The report concluded that younger generations are becoming increasingly more important luxury brands. This year, Generations Y and Z contributed 100 per cent of the total luxury market growth, compared with 85 per cent last year. Bain predicts Generation Z, which today comprises just 2 per cent of the market will account for 10 per cent of it in 2025.

  • Desire for cheap luxury drives counterfeit market in Vietnam

    Desire for cheap luxury drives counterfeit market in Vietnam

    Le Thu Trang recently switched from a Gucci bag to a Prada design for a fresh look, but the decision did not put a massive dent in her bank account.

    Both of her bags are counterfeits and cost 20 times less than the originals that can be found in the stores of luxury Italian brands.

    “I like to carry Gucci and Prada bags, but buying luxury goods is not easy because they’re expensive and fashion trends change quickly,” Trang said. “In that respect, fake bags are very appealing. They’re nice and quite cheap.”

    Trang’s case illustrates a trend among consumers, especially young people in Vietnam, who like buying fake products ranging from eyewear and shoes to garments and handbags. Their desire for cheap luxury has helped counterfeiters thrive in the country.

    On the streets of Hanoi and in some of its glistening air-conditioned malls, countless fake Hermes and Louis Vuitton handbags, Rolex watches and Gucci fashion accessories are openly on sale.

    Consumers who want an expensive logo or style can pick up goods for surprisingly cheap prices, even though they know the goods are illegal and might be confiscated by international customs agents who can impose heavy fines.

    Wealthy businessmen, savvy importers and even enthusiastic housewives are looking to make a profit from selling fakes from bricks and mortar stores or online, despite efforts to stop intellectual property right infringements.

    Retailers are also unconcerned about selling fake goods. “This is a knock-off, but no problem,” a woman said, pointing to a white polo shirt emblazoned with a Louis Vuitton logo.

    “Why should I have to worry about the police? I don’t sell drugs. I didn’t steal this shirt,” she said in a store on Hanoi’s Hang Ngang Street. “Lots of people here sell fake goods like me.”

    In a nearby handbag store, fake products with Chanel, Gucci and Louis Vuitton logos on them are on sale for $20-50.

    “The originals cost thousands of U.S. dollars,” the dealer said, convincing customers that her handbags look like the genuine article. “Same design. Same material. This one is made in China.”

    Fake products such as garments, footwear, eyewear, shampoo, body lotions and pharmaceuticals can be found all over Vietnam, from high-end shopping malls to street-side markets.

    Most of the knock-offs are smuggled in from China, Phan Hoan Kiem, head of the Market Surveillance Agency in Ho Chi Minh City, said at a recent meeting.

    However, some counterfeit products are made in Vietnam. Many households in Lich Dong Village, Thai Binh Province produce glasses and label them with famous international brands such as Ray-Ban, Gucci and Chanel, while Thao Noi Village in Hanoi is notorious for producing fake Chanel, Hermes and Louis Vuitton handbags.

    Without drastic measures to combat fake products, Vietnam could become a major counterfeiting center in the future, an official from the Department of the Intellectual Property under the Ministry of Science and Technology warned. Many handicraft villages that specialize in counterfeit goods have sprung up as farmland disappears as a result of the industrialization and urbanization process, he said.

    Vietnam has detected over 44,500 cases related to counterfeiting and piracy since 2014, said Truong Van Ba, a member of National Steering Committee 389, the government’s anti-smuggling body.

    Lack of enforcement

    Experts say Vietnam is not doing enough to stop the trend. Current laws do not impose fines on people who use counterfeit goods, but in many other countries buying and using these products is considered a crime.

    Hoang Van Truc, deputy director of the Investigation Bureau of Economic Crimes, said that only one in seven cases related to fake goods is prosecuted, while the rest receive administrative fines.

    Truc added that there’s a lack of cooperation between authorities, especially in border provinces, to prevent fake products from entering the local market. Many laws on counterfeiting and piracy overlap, while the current penalties aren’t enough of a deterrent.

    In addition, the fight against fake goods is made more difficult by the fact that some products are imported into the local market in the form of spare parts rather than finished products, making it almost impossible for authorities to identify them.

    Many enterprises also offer fake items that are 90 percent genuine, posing another problem for law enforcement officers.

    Even anti-counterfeiting stamps, which are used to protect trademarks, are being faked.

    The growing taste among local consumers for fake products has contributed to the market’s development in Vietnam, said Phan Thi Viet Thu, vice chairwoman of the Consumer Protection Association in Ho Chi Minh City.

    Her association rarely receives complaints about counterfeit products. “If consumers don’t say “no” to counterfeit goods, the trade will continue expanding.”

    Despite the warning, Trang is still happy with her fake bags. “I’ll buy genuine goods when I’m rich. For now, the cheap ones are still my best option.”

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  • High-end Knockoff Retailers Busted in Seoul’s Busiest Tourist District

    High-end Knockoff Retailers Busted in Seoul’s Busiest Tourist District

    Seoul police busted four retailers Monday for selling counterfeit products of luxury brands in Myeongdong, one of the busiest tourist and shopping districts in Seoul. 
    fake-product-luxury

    The gang launched operations in April, and has since sold 40-million-won ($36,245) worth of knockoff products from 41 brands that included luxury brands Louis Vuitton and Rolex. Converting the sales figure to the retail value of their respective genuine products, they were worth over 8.3 billion won, the police said. 

    The suspects displayed the products without the logo engravings to evade police crackdowns. Instead, they sold the final products with the logos at a separate storage area only when visiting customers asked for counterfeit products.

    “Counterfeit products can badly hurt the image of Myeongdong, so we plan to continue our crackdown operations jointly with the local government and the intellectual property office,” said a police official.

     

     

    Image Credit: Yonhap 

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  • Report: Chinese Shoppers Make 40 Percent of Luxury Purchases Abroad

    Report: Chinese Shoppers Make 40 Percent of Luxury Purchases Abroad

    Chinese travelers are spending billions of dollars abroad, but where exactly are they making their luxury goods purchases? A recent report titled “Who Buys Where: Decrypting Cross-Border Luxury Demand Flows” by digital direct marketing services provider ContactLab and Exane BNP Paribas Research maps out spending patterns by tourists from all over the globe based on three years of data. ContactLab’s research ranks Chinese travelers second in terms of the proportion of spenders who buy luxury goods abroad, finding that 40 percent of Chinese consumers’ luxury spending occurred overseas in the first part of this year.

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    While Chinese consumers spend most of their budget on luxury items abroad, this year, overseas spending dropped 5 percent, but rose 5 percent domestically. ContactLab attributes this to price corrections by major luxury brands on the mainland. For example, last year, Chanel lowered its mainland China prices to encourage Chinese shoppers to purchase there, and deter daigou sellers from benefiting from purchasing cheaper goods abroad.

    How much Chinese spend abroad may provide some insight into exactly who these consumers are. The value of purchases Chinese travelers make in “European Heritage” countries, the United States, and Japan is significantly lower than it is in China—by 20 to 30 percent. ContactLab says this suggests big spenders in these countries are “aspirational first-time buyers.”

    However, despite individual purchases being lower overall, Chinese luxury spending in Europe “appeared to be rising” in the first four months of 2016 compared to the same period two years before, according to the report. This was the case even factoring in the Paris terrorist attacks in late 2015. The increase takes place “possibly because our data includes also a portion of daigou spend (eg Chinese students in Europe whose visas don’t allow tax free refunds, and which are therefore not captured by Global Blue statistics),” said ContactLab senior advisor Marco Pozzi. “If this is what we see in the wake of the November terrorist attacks, then 2H16 could reasonably expected to be even more positive.” It’s still worth noting that since the release of the report last month, there have been further attacks in Europe and numerous luxury brands have reported that they are feeling the repercussions of waning Chinese tourists in light of security concerns.

    In Asia, Chinese tourist luxury spending has also gone up in the last few years in Japan and Korea. In Japan’s case, Chinese travelers make up the majority of the luxury purchases, even though inbound tourists only make up about 5 to 15 percent of sales in the country overall.

    The report also confirms known trends in Hong Kong and Macau’s luxury retail industry. This year, Chinese consumers have done almost the same amount of luxury shopping in Japan, Taiwan, Singapore, and Korea combined as they have done in Hong Kong and Macau. Chinese tourists went from spending 70 percent of their luxury goods budget in Hong Kong in the first four months of 2014 to spending 35 percent in the same period this year. Hong Kong’s luxury retail industry has been struggling with the absence of Chinese tourists and developers are being forced to find alternatives to high-end stores to attract shoppers. This month was the first in over a year where Hong Kong finally experienced a rebound in tourists from the mainland.

  • Asia luxury goods market still growing

    The Asia luxury goods market is still growing rapidly despite negative press about Hong Kong, Macau and deteriorating China spending.

    Luxury goods retail sales in Asia-Pacific are expected to reach US$134.9 billion by 2019, growing at a CAGR of seven per cent during 2014-2019, according to the report Luxury Goods Retailing Market in Asia-Pacific, 2014-2019 Market and Category Expenditure and Forecasts, Trends, and Competitive Landscape.

    Japan will remain the largest Asia Pacific luxury goods market amid a slowdown in China and India’s luxury goods market is the fastest growing in Asia-Pacific, driven by rising disposable income, growing fascination towards luxury brands, and the desire of high earners to differentiate themselves from others.

    The report says jewellery, watches and accessories is the largest and fastest growing category in the region, driven by higher spending on jewellery and watches by Chinese, Japanese, and Korean consumers.

    The Hong Kong luxury goods market is struggling due to political unrest and reduced Chinese spending. A luxury tax exemption is expected to boost luxury goods consumption in Indonesia.

    Social messaging apps is a trending marketing channel for luxury brands, as the digital channel is influencing the purchasing decisions and pattern of consumers.

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  • Hong Kong Luxury Goods Stores Want Cheaper Rents

    Hong Kong Luxury Goods Stores Want Cheaper Rents

    Rents for retail space on the island of O‘ahu rose to a record earlier this year.  Colliers International says commercial rents here have been rising for the past several years, a trend that’s expected to continue. Commercial rents have also risen in Hong Kong, but some luxury retailers are fighting back.  HPR’s Bill Dorman has more in today’s Asia Minute.

    Selling luxury goods in Hong Kong is not the business it used to be.  Part of that reflects a slowing Chinese economy.  But those who follow the sales say an even bigger impact has been the crackdown on extravagant spending by Chinese government officials.

    This week, the chief financial officer of Gucci’s parent company threatened to close some stores in Hong Kong unless rents are reduced.  He told a conference call of analysts that “many landlords have not necessarily understood that the markets have changed.”

    Bloomberg reports Burberry may also try to lower its rent after its sales in the city fell to a two-year low.  Commercial rents have come down in some parts of Hong Kong, but they remain among the most expensive in the world.  Reuters reports a 500-square foot store space in the neighborhood of Causeway Bay can cost the equivalent of 64-thousand US dollars a month.

    Commercial real estate firm Cushman and Wakefield says annual rent for retailers tops two-thousand dollars a square foot in three different Hong Kong neighborhoods.  Many Chinese shoppers are now traveling beyond Hong Kong to buy luxury goods.  In a report last month, Bain and Company said the world’s luxury goods market is continuing to grow, and its major driver is tourism.

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  • China duty cuts details released

    China’s mainland government will halve duties on imported clothing, accessories, skincare products and nappies from Monday June 1.

    The China duty cuts were first flagged early this month as Beijing’s lawmakers sought a way to revive flagging retail sales growth and encourage locals to spend more at home rather abroad.

    The cuts are aimed at incentivising travellers to purchase luxury goods from local retailers rather than abroad, and discourage cross-border trading, especially through Hong Kong.

    The duty cuts average 50 per cent and will go a long way towards addressing an imbalance where mainlanders can pay as much as 40 per cent premium on foreign made goods due to import duties and other taxes.

    While the biggest impact of the duty cuts will be on luxury goods, Hong Kong’s border traders and cosmetics and personal care chains will take a significant hit. The mainland government has already clamped down on cross-border runs, limiting mainlanders to one trip a week to Hong Kong. That has reduced sales of nappies, cosmetics and infant milk formula in Hong Kong, for resale in Shenzhen and beyond.

    Hong Kong General Chamber of Pharmacy committee member Cheung Tak-wing told the South China Morning Post that local pharmacies had seen sales drop by one-fifth in April year-on-year. Drugstores in the northern district were hardest hit by the loss of bulk buyers from across the border.

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