Reports

    China News Brief
    January 18, 2024

    K11 posts impressive performance, global luxury rebound sluggish and more from China's beauty market, Furla and Victoria's Secret
    Global luxury rebound sluggish as China rebound slow

    Modest Growth of Over 5 Percent in China’s Cosmetic Retail Sales#

    A decade's lowest according to a statement released by the National Bureau of Statistics of China  on January 17, the total retail sales of cosmetics in 2023 amounted to 414.2 billion RMB($64.17 billion), marking a 5.1 percent increase compared to the previous year. In December, the retail sales data reached 32.3 billion RMB($5 billion), reflecting a 9.7 percent year-on-year increase. It's worth noting that this growth rate represents the lowest positive growth in the total retail sales of cosmetics in the past decade, signaling the end of the high-growth phase in the beauty and cosmetics market and a shift towards more refined and stable operations.

    Karry Wang Joins Furla as Brand Ambassador for 2024 New Year Capsule Collection #

    Furla officially announced that young actor and singer, Karry Wang(Wang Junkai), as new brand ambassador.  Together, they unveiled the 2024 New Year capsule collection advertisement, with a collection blendingng Eastern and Western aesthetics, drawing inspiration from the traditional Chinese orchid with colors like Green Orchid, Sapphire Orchid, and Peach Orchid, giving the classic Candy bags a fresh, dynamic look. Furla also includes an original cartoon dragon-shaped charm with the bags, symbolizing happiness and a new journey ahead.

    Luxury’s Rebound Is Proving Elusive as China Gloom Adds to Warnings #

    Investors in luxury stocks are facing challenges as companies like Burberry and Hugo Boss reported disappointing results , and economic data from China, a key market, indicates a lacklustre outlook. Richemont, the owner of Cartier, is set to provide insight into the luxury sector's performance as it reports third-quarter sales. Concerns about demand for luxury goods have grown, causing a drop in the European luxury sector. While valuations have fallen by over 20 percent, investors are hesitant to buy, and analysts have scaled down earnings expectations by over 5 percent. Hermes stands out as demand for its high-end handbags remains strong, but overall, the luxury sector faces uncertainties and challenges ahead.

    Chanel, Armani Lipsticks Among Tested Brands Found To Contain Metal Contaminants: Hong Kong Consumer Watchdog #

    Hong Kong's Consumer Council conducted tests on approximately 30 lipstick samples and found that 60 percent of them contained elevated levels of cobalt, while 40 percent contained nickel, both known allergenic heavy metals. Brands such as Chanel, Giorgio Armani, Estee Lauder, and others were found to have heightened levels of these metals, causing skin irritations. The council recommended that manufacturers pay close attention to raw materials potentially containing allergenic heavy metals and minimize their use. Some brands defended the safety of their products, while others expressed a willingness to address allergy-causing substances. The council advised consumers to discontinue use if they experienced skin reactions and cautioned against ingesting substances by wiping off lipstick before eating or drinking.

    K11 Musea's Impressive 2023 Performance: Sales and Foot Traffic Soar #

    New World Development, the Hong Kong property developer, announced impressive results for its high-end shopping center, K11 Musea, in the second half of 2023. Sales and foot traffic increased by 40 percent, member spending grew by 20 percent, and Black Card members' spending went up by 17 percent, with a 55 percent year-on-year increase. On December 24 and 25, K11 Musea set new daily foot traffic records. Jewelry and watch sales, along with personal care, increased by 25 percent. K11 Musea's occupancy rate remains close to 100 percent. Nanjing Deji Plaza Sets New Records with 23.9 Billion RMB in 2023 Annual Sales In January, several domestic high-end shopping centers announced their 2023 annual performance. Beijing SKP, Nanjing Deji Plaza, Hangzhou MixC, Hangzhou Hubin Yintai in77, and others achieved annual sales exceeding 10 billion RMB($1.56 billion), with Nanjing Deji Plaza recording a total annual sales revenue of 23.9 billion RMB($3.74 billion), a year-on-year increase of 13.9 percent compared to 2022. Nanjing Deji Plaza has long been synonymous with high-end commercial properties in China and is hailed as "China's most profitable shopping center," consistently ranking among the top three in single-store sales among high-end shopping centers nationwide.

    China’s Population Declines for Second Straight Year #

    China has reported a record low birth rate in 2023, with only 6.39 births per 1,000 people, the lowest since the founding of Communist China in 1949. Some 9.02 million babies were born, compared to 9.56 million in 2022, contributing to an overall population decline of 2.08 million people. The country's demographic shift comes as its economic growth is slowing, with concerns about its aging population and shrinking workforce. Analysts suggest that China may need to implement structural changes in its economy, particularly in healthcare and housing, to address these challenges and stimulate economic growth.

    Victoria’s Secret To Create AI-Powered Shopping Experiences With Google Cloud #

    Victoria's Secret & Co. and Google Cloud have entered into a strategic multi-year partnership. VS&Co plans to use Google Cloud's AI and generative AI technologies to enhance personalized and inclusive online shopping experiences for its global customers. They will also explore a generative AI-powered conversational assistant, providing tailored product recommendations and advice based on individual preferences and experiences. This partnership aims to leverage AI for various aspects of the business, including marketing, customer sentiment analysis, supply chain optimization, human resources, and store operations. Google Cloud's technology will also enhance the website and mobile app with advanced search and recommendation capabilities.

    Mulberry blames Tourist Tax and luxury slowdown in luxury demand for falling sales #

    British fashion brand Mulberry reported a 9 percent decline in sales over the recent quarter, attributing it to a slowdown in demand for luxury spending and the absence of VAT-free shopping for international tourists in the UK. UK retail sales were down by 4 percent, while total retail sales saw a 1.5 percent decrease. However, international sales managed to grow by 3.9 percent, yet the overall group revenue for the period was down by 8.4 percent. The company also mentioned the cost impact of opening new stores in Sweden and Australia and noted that upmarket shoppers scaling back their spending contributed to the sales decline, aligning with the challenges faced by fellow designer Burberry in the luxury retail sector.