China News Brief
    May 23, 2024

    Gold prices surge in China, driving increased jewelry consumption; Perfume brand Documents shutters Shanghai, Chengdu stores; LVMH deepens partnership with Alibaba.
    Gold jewelry is displayed at a jewelry store in Yichang, Hubei province, China, April 11, 2024. Image: Getty Images

    Gold prices surge in China, driving increased jewelry consumption#

    On May 20, the websites of gold jewelry brands such as Chow Tai Fook, Luk Fook Jewellery, Chow Sang Sang, and Lao Miao Gold showed  that the domestic price of pure gold jewelry exceeded 742 RMB ($104.62) per gram. Since the end of 2022, gold prices have risen by more than 40%. According to data from the China Gold Association, in the first quarter of this year, the national gold consumption reached 308.905 tons, a 5.94% increase compared to the same period in 2023.

    [@portabletext/react] Unknown block type "postReference", specify a component for it in the `components.types` prop

    Perfume brand Documents shutters Shanghai store#

    Documents revealed  that the brand’s first offline store on Middle Huaihai Road in Shanghai has closed. Opened in July 2021, it was part of Documents’ network of eight fragrance testing spaces and two reading rooms across seven cities. Additionally, the Chengdu IFS Bright Space closed on December 21, 2023, after only a year of operation. Established in 2021, Documents is a Chinese high-end perfume brand known for its “Zen Cool Chanku” style and high-concentration perfumes. The brand, which uses Chinese raw materials, secured tens of millions of RMB in Series A+ financing in September 2022, co-led by Cathay Capital and L’Oréal China's investment company, with Vision Capital as the exclusive financial advisor.

    [@portabletext/react] Unknown block type "postReference", specify a component for it in the `components.types` prop

    LVMH deepens partnership with Alibaba#

    LVMH is deepening  its partnership with Alibaba to enhance luxury retail experiences in China. Utilizing Alibaba’s AI-powered cloud technologies through Tmall, the collaboration aims to innovate and personalize the luxury shopping experience. Since 2019, LVMH has used Alibaba’s data management and machine learning tools to tailor services for Chinese consumers. The expanded partnership will integrate Alibaba’s AI capabilities across over 30 brands in China and Southeast Asia. LVMH’s Stephane Bianchi and Alibaba’s Eddie Wu both emphasized the transformative potential of this partnership, which recently saw the debut of Tiffany’s and Chaumet on Tmall Luxury Pavilion.

    Jaeger-LeCoultre opens pop-up in Hangzhou#

    On May 18, Jaeger-LeCoultre’s “The Adventure Spirit” themed pop-up experience opened  at Hangzhou MixC, celebrating the brand’s sports watch heritage. Running until June 2, the exhibit features five chapters showcasing the development of Jaeger-LeCoultre’s sports watches, including the origins of the Polaris collection. A highlight is the Underwater Time art installation, using 12 water columns and bubbles to symbolize deep-sea breaths and the passage of time. The Adventure Atelier offers natural-element-infused drinks, inviting visitors to explore the legendary journey of Jaeger-LeCoultre’s sports watches.

    [@portabletext/react] Unknown block type "postReference", specify a component for it in the `components.types` prop

    China’s e-commerce growth ticks up#

    On May 21, the Ministry of Commerce’s Department of E-commerce reported  China’s e-commerce development from January to April 2024. National online retail sales reached 4.41 trillion RMB ($617.4 billion), up 11.5%. Physical goods online retail sales were 3.74 trillion RMB ($523.6 billion), up 11.1%, accounting for 23.9% of total retail sales. Cross-border e-commerce exports steadily increased. Network service consumption monitored by the ministry grew by 25.1%, with online travel up 77.6%, driven by new Chinese-style, county, and outbound tours. The trade-in policy boosted April's online sales of home appliances and furniture by 9.3% and 12.2%, respectively, accelerating from the previous month.

    Amer Sports reports 13% revenue growth, driven by China, APAC#

    Amer Sports, the parent company of Arc’teryx, reported  a 13% YoY increase in first-quarter revenue to $1.18 billion, with an operating profit of $109 million and a net profit of $7 million, down from $19 million last year. The technical apparel segment, including Arc’teryx and Peak Performance, grew 44% to $510 million. The outdoor performance segment, including Salomon, grew 6% to $400 million, while the ball sports and racquet segment declined 14% to $273 million. Greater China and the Asia-Pacific regions saw the highest growth, with sales increasing by 51% and 34%, respectively. EMEA sales grew by 1%, and sales in the Americas remained flat.

    Scratch card craze sweeps China, causing shortages#

    Recently, scratch cards have sold out  in almost all lottery shops in China, with glass cases remaining empty since late April. The cards, now popular among young people, are often sold out immediately when restocked. A Weibo topic titled “They’re afraid to sell scratch cards in the open” garnered significant attention, highlighting this phenomenon. The cards’ popularity is driven by the chance of instant gratification and winning, as well as being a social activity. Despite high demand, supply is limited due to strict regulations and a slow production process. Sales nearly doubled from 60 billion RMB ($8.4 billion) in 2022 to 120 billion RMB ($16.8 billion) in 2023, yet supply struggles to keep pace with the increasing demand.

    European cities prep for luxury tourist influx during Olympics#

    Luxury retailers in European cities outside France are expecting  a surge in wealthy tourists this summer, as visitors avoid the crowds and street closures in Paris during the Olympic Games. Cartier CEO Cyril Vigneron predicts that cities like London, Milan, and Barcelona will see increased traffic. The Summer Games, from July 26 to August 11, are not seen as the ideal time for high jewelry events in Paris, though stores will remain open. Richemont-owned jewelry brands and LVMH, based on past experiences, anticipate similar trends. A Paris 2024 report suggested tourists might divert to other destinations. Consequently, fashion shows are rescheduled, and some labels opt for Milan presentations. London stores like Harrods and Selfridges are preparing for an influx, with Harrods focusing on exclusive products and Selfridges offering sporting events. Barcelona is promoting a more relaxed alternative. Some tourists, including Americans, plan to visit other European countries during the Games, boosting intra-European travel.

    Chanel to boost retail network investment, acquisitions#

    Chanel plans  to boost its investment in its retail network and real estate by over 50% this year, aiming to secure prime locations amid fierce competition from other luxury groups. Owned by the Wertheimer family and headquartered in London, Chanel will also continue acquisitions to further integrate its supply chain. CFO Philippe Blondiaux emphasized seizing real estate opportunities and expanding manufacturing control. Despite a crowded market, Chanel is rapidly growing, with sales hitting $19.7 billion last year, a 16% increase. CEO Leena Nair highlighted Chanel’s resilience and strategic expansion, doubling revenues and headcount in the past decade. The brand plans further investments, particularly in the US and China, while maintaining pricing policies amid rising material costs and inflation.

    Balenciaga launches original video game, playlist with Bfrnd#

    Balenciaga has collaborated  with its runway music producer Bfrnd (Loïck Gomez) to launch an original video game, a new four-hour playlist, and a series of limited-edition merchandise, including T-shirts and hoodies, each equipped with an NFC chip that provides access to all data from production to sale. The new music playlist has been officially available on Apple Music since May 21. Meanwhile, the original video game Bfrnd: The Game is described as a pixelated adventure that takes players through Balenciaga shows from the past few years, set to the original soundtracks Bfrnd created for each show. Anyone can access the game through the dedicated website, WeChat, or the touchscreen at the Balenciaga flagship store on Avenue Montaigne.

    [@portabletext/react] Unknown block type "postReference", specify a component for it in the `components.types` prop