For the better part of this year, China has experienced a slump in the most opulent of sectors. Sales for luxury powerhouses like LVMH, Richemont, and Burberry have fallen in the region that once seemed to represent limitless growth for high-end goods.
Consumer spending in China never fully recovered after the government started lifting COVID-19 curbs in late 2022. Since then, the country has struggled with weak consumer sentiment and multiple economic challenges, including a property crisis, deflation, and high youth unemployment.
Meanwhile, China's once-free-spending consumers are holding back and prefer to save - in cash or gold. Cautious spenders are also trading down to knockoffs and lower-priced or local alternatives across a range of products from beauty and fashion to travel.
The prevailing zeitgeist in China is about 'aiming to live well while spending less,' MingYii Lai, a strategy consultant at Beijing-based market research firm Daxue Consulting, told Business Insider in September.
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