After all, the Chinese are not broke. They would just rather save their money during this time of economic uncertainty. They also prefer spending their on experiences like travel and buying stuff - including luxury items - when they are on vacation in Japan, where they can get great discounts.
So, even though LVMH's business in China is lower than in past years, "it doesn't mean that the global business we do with mainlanders is down," LVMH chief financial officer Jean-Jacques Guiony during the company's second-quarter earnings call on Tuesday.
"The response from customers to marketing stimulus is still quite important in China," said Guiony on the earnings call. "So we will certainly allocate a significant amount of our marketing budgets there."
LVMH does not break down its marketing cost by region. For the first half of this year, its spending on marketing and sales totaled nearly $15 billion - about the same as last year.
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