Dior’s Hong Kong showcase on indefinite hold amid regional market jitters

Reflecting the unpredictability of the Greater China luxury market, Dior unexpectedly announced the indefinite postponement of its eagerly anticipated fashion show at the Kai Tak Cruise Terminal in Hong Kong, originally scheduled for March 23. With a projected cost of approximately HK$100 million ($12.8 million), the Dior event had been highly promoted in the wake of Louis Vuitton’s successful inaugural runway show in Hong Kong in November. Reportedly, the decision to postpone was mainly driven by “commercial factors,” with no further elaboration given, which presumably relates to the unpredictable economic picture throughout Greater China. In a short statement, Dior simply announced the show’s delay to be “indefinite.” As a government official told Reuters, “We have just received notification from the organizer that the event will be postponed. In fact, postponements of large-scale events often happen. We continue to welcome large-scale events to be held in Hong Kong.” Yet it remains unclear whether international brands will rush to Hong Kong to hold events in the near term. Dior’s cancellation followed the controversial handling of Inter Miami’s friendly soccer match against a local team, during which Lionel Messi sat on the sidelines, much to the chagrin of fans who had shelled out HK$580 ($74) to HK$780 ($100) for tickets to see the superstar in action. The controversy cast Messi as well as Hong Kong in a poor light, with one fan telling South China Morning Post, “While it is indisputable that Messi was discourteous towards Hong Kong, this incident also highlights the Hong Kong government’s inadequacy in managing events and communicating with the organizers.” Netizens have been even more critical. Instagram user @hked41 opined that Dior cancelled their event “because Messi made a mess of it and Dior has connections with Messi [...] End of game!” Unsteady footing Given the lack of detail, the delay of such a heavily publicized event — particularly one that could have given Hong Kong a much-needed shot in the arm after years of stagnation — indicates that Greater China’s luxury retail scene remains on unsteady footing. Although the IMF expects mainland China to see 4.6 percent GDP growth in 2024, consumers remain value- and price-conscious. Many young consumers are holding back on big-ticket purchases, spooked by high youth unemployment and uncertain economic prospects. This means luxury brands’ China plans for 2024 remain in flux as they re-evaluate where to focus spending on marketing and market expansion. Renaissance in question? The cancellation of the Dior event is particularly damaging to Hong Kong at a time when it needs to project an image of a city experiencing a major retail renaissance. For city officials, the Dior event had been touted as one of the top “mega-events” that heralded the city’s resurgence as a premier cultural and business hub. Artistic director Kim Jones was expected to present the men’s fall collection at the site of the former Kai Tak airport to a guest list of 1,000 overseas VIPs, executives, and local attendees. More questions than answers Instead, the event’s cancellation comes as a shock, especially considering the importance of the Greater China market to Dior. The brand’s decision indicates a far more cautious stance among top luxury brands in the face of intensifying economic uncertainty and a pressing need to carefully navigate China’s complex socio-economic landscape. Adding another layer to the mystery of Dior’s cancellation is the brand’s success, particularly online, in the China market. A recent study conducted by Launchmetrics revealed that Dior topped the charts in influencer engagement in China from January to November 2023. Dior’s influencer engagements were valued at $397 million, surpassing Chanel’s at $313 million and significantly outperforming Nike ($134 million), Armani ($117 million), and Hermès ($111 million). A key factor in Dior's dominance in the Chinese market is its effective use of Douyin, the local equivalent of TikTok, which contributed to 56 percent of Dior’s influencer media impact value (MIV). In-person events also proved popular for Dior in China in 2023, with the brand holding a triumphant 2023 fall women’s collection showcase in Shenzhen that drew an audience of around 850 VIP clients, celebrities, socialites, and local officials and amassed 130 million livestream views. More damaging to Hong Kong Eager to overcome the yearslong challenges posed by the pandemic, Hong Kong positioned the Dior show as key to its broader strategy to revitalize its global image and economic prospects. Dior may come out of this cancellation without a scratch, but the indefinite postponement casts a shadow over the city’s ambitious plans to reassert itself as a leading destination for international events, tourism, and cultural and luxury retail.

Sectors

Insights

Company

Dior’s Hong Kong showcase on indefinite hold amid regional market jitters