China’s Rich Dumping Luxury Brand Name Items Over Luxury Shame

China’s rich are avoiding flaunting their money by dumping luxury brand name items link Louis Vuitton, Channel and Hermes in favour of more subtle designs. Analysis are now predicting the weakest global luxury market since the height of the epidemic.

Global sales of personal high-end items, including apparel, accessories, and beauty products, are expected to be flat to 4% higher year on year, at constant rates, according to Bain’s twice-yearly luxury report, which is keenly monitored in the fashion industry.

This would be the slowest sales rise since 2020, when sales plummeted during the Covid-19 pandemic.

The slump is particularly noticeable in China, where economic instability weighs on middle-class consumers and makes those who can still afford luxury wary of ostentation.

“For the first time in history, we have in China the so-called luxury shame,” Bain partner Federica Levato remarked.

In an era of unemployment, social and economic crises, the wealthier Chinese, who have resumed travel, have shifted their expenditures away from the mainland.

“The market is definitely in a stall moment,” Levato added. “After two years and a half of growth, there is a fatigue in personal luxury goods.”

Luxury Demand in China

The revelation would amplify investor concerns that Chinese luxury demand is not recovering, which has dragged down shares of LVMH and Gucci-owner Kering over the last year.

It will also raise expectations that luxury brands at the upper end of the market, such as Birkin bag maker Hermes, which sells handbags for more than $10,000, will perform better in the current market.

Hermes shares are the only ones among the major listed luxury houses that have increased in value over the past year.

Instead of swarming to malls, customers are making private meetings and opting for more subtle and discreet design, rather buying “very visible and flashy items,” Levato predicted, forecasting that this trend, directly related to a specific economic condition, may not endure.

Signs of recovery have surfaced in the United States, with more affluent clients driving growth, while younger, less wealthy shoppers continue to postpone purchases.

Foreign travellers have returned to Europe and Japan, boosting luxury sales.

Luxury Shame in China

Luxury shame or guilt is becoming more prevalent in China as more people become wealthy yet are hesitant to show it off. The rise of social media has exacerbated this, making people uncomfortable about flaunting their money.

They are concerned about judgement and retribution from friends, coworkers, and even strangers who may view their posts. Overt shows of riches are considered garish or disrespectful in the country’s culture, which historically emphasises modesty. Luxury brands are also experiencing heat.

They must strike a balance between marketing their items and offending potential buyers who do not want to appear arrogant. This has resulted in a trend in which consumers purchase luxury goods but keep them understated, opting for less dazzling objects or modest trademarks.

In essence, people still want luxury, but they are more cautious about how they present it. This dynamic is influencing how firms market their products, with an emphasis on understated elegance rather than over-the-top grandeur.