As China’s luxury market slowdown continued to hit brands and Chinese shoppers bought even more of their goods abroad in 2015, the industry saw many key changes and developments. As the year comes to a close, we’ve rounded up the key trends that we saw in the industry, which are likely to continue to have significant effects on the market in the future:
1. Hong Kong’s luxury retail slump.
A combination of local anti-mainland sentiment, new government policies to combat parallel trade smugglers, and more favorable currency situations elsewhere prompted a decline in tourists visiting Hong Kong from the mainland this year—and a major hit to luxury retail sales as a result. Watches and jewelry sellers had an especially difficult time, and brands have responded by closing stores, renegotiating sky-high retail rent, and shifting their strategies to market to local Hong Kong shoppers as a result.
2. China comes to the Met Gala.
The massive “China: Through the Looking Glass” exhibition for this year’s Costume Institute fashion exhibit and accompanying gala at the Metropolitan Museum of Art wasn’t actually “about” China, according to its curator Andrew Bolton. While most of the gowns on display in the exhibit and on the stars at the gala were (often misguided and Orientalist) pieces by European designers, the event launched a massive amount of global attention for Chinese designer Guo Pei after she dressed Rihanna in that iconic, meme-worthy yellow gown.
3. Luxury brands and Chinese government respond to China price gap.
As currency fluctuations widened the price gap between luxury items in mainland China and abroad, some brands such as Chanel and Tag Heuer took decisive action to lower their prices in China. This was intended to not just boost mainland sales growth that has slumped as Chinese shoppers buy abroad, but also to cut down on demand for goods from China’s rampant gray market that has taken off as a result. The Chinese government also took action to keep more sales at home, slashing tariffs on consumer goods (including fashion) twice this year and developing duty-free shopping.
4. Alibaba takes heat for fakes on its platforms.
Fed up with the number of fakes that can easily be found on Taobao, Kering filed a high-profile lawsuit against Alibaba this year, accusing the e-commerce giant of encouraging the proliferation of fakes. Alibaba also faced criticism from China’s State Administration for Industry and Commerce, which issued a white paper accusing it of allowing the sale of counterfeit and illegal goods before removing it from its website a few days later. The American Apparel and Footwear Association (AAFA), the Trademark Working Group, Spanish anti-counterfeit group ANDEMA, and the U.S. Chamber of Commerce have also joined in the criticism over counterfeits on Alibaba’s platforms.
5. Japan rises as a key destination for Chinese luxury shoppers.
As Hong Kong slumped and popular Chinese tourist destination South Korea suffered from its MERS crisis, Japan was the Chinese luxury shopper’s destination of choice in 2015. Companies including Hermès and Richemont have seen significant sales growth in Japan thanks to Chinese tourists as China became Japan’s number one source country for foreign travelers. Their love for shopping was so prominent this year that the term bakugai, or “explosion buying” used to refer specifically to Chinese spending habits, was named Japan’s “buzzword of the year,” chosen over terms like “drone” and “We will not tolerate Abe’s politics.”