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CONSUMER SPENDING

Luxury brands feel pressure as Chinese consumers pare back spending

By our African Marketing Confederation News Team | 2024

Rising cost of living, growing unemployment among young people, and fears of deflation are among the factors worrying Chinese shoppers.

Under-pressure Chinese consumers are becoming increasingly cautious about spending on expensive luxury items. 

 

This is according to Swatch, which has several luxury watch brands in its stable – among them Harry Winston, Longines, Tissot and Breguet. 

 

“They (Chinese consumers) have become even more price sensitive, as there have been excessive price increases in many areas,” Swatch group CEO, Nick Hayek, told the Swiss newspaper Neue Zuercher Zeitung. “I expect the Chinese market to remain difficult until the end of the year.” 

The Cloud Nine Mall in Shanghai, China.

Photo: Szalai.laci via Wikipedia

 

In the last decade or so, Chinese buyers have been a mainstay of global luxury brands, ranging from automobiles to clothing and jewellery. 

 

Factors impacting the market

 

However, the lingering effects of Covid on the economy and factors such as growing youth unemployment, a struggling property sector, and rising cost of living have all impacted the market. 

 

Deflationary concerns have also led to people choosing to save and invest more, rather than spend on consumer goods. 

 

“The Chinese [still] have money and they continue to show interest and come into [our] businesses. But they currently hesitate for a long time before buying something,” Hayek said. 

 

Other top-end brands that are struggling in China at the moment include Gucci, the Italian fashion and leather goods manufacturer, and LVMH. The latter’s brands include Moët, Hennessy and Louis Vuitton. 

 

However, Hayek remains bullish about long-term prospects in China. 

 

“China’s potential remains great; people are hungry for success, want to work, earn more, go out, travel and certainly buy watches,” he said. 

Dr Kin Kariisa

Group CEO - Next Media

Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

  • Other current and previous roles played by Dr Kin Kariisa:
  • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
  • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
  • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
  • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
  • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.