After a year of exceptional sales and profits, the luxury sector has set its sights on the reopening of China to continue its expansion in 2023. LVMH, the world’s largest luxury group, reported a 23% increase in sales, reaching a record 79 billion euros ($86 billion) in 2022, with profits rising 17% to 14 billion. This impressive growth was not limited to LVMH, as competitors such as Hermes and Kering also experienced significant increases in sales and profits.

The reopening of China is seen as a crucial development for the luxury sector. With China gradually lifting travel restrictions as part of its zero-Covid policy, the country’s economy is expected to expand by 5.2% in 2023, according to the International Monetary Fund. This presents a significant growth opportunity for the luxury sector, which saw a decline in consumption due to pandemic-related restrictions. Analysts predict that 2023 will be the “year of the Chinese consumer,” as Chinese tourists are unlikely to return to Europe until next year.

LVMH’s financial director, Jean-Jacques Guiony, emphasized the importance of the Chinese clientele and their role in driving future growth. He noted that Chinese consumers within the country will be the primary focus for luxury groups, as they are unlikely to travel abroad for luxury shopping anytime soon. LVMH’s CEO, Bernard Arnault, expressed confidence in the Chinese market and the growth potential it offers. Analysts estimate that the luxury market in China could experience a 30% surge this year, fueled by the affluent class’s accumulated savings and desire to purchase luxury goods.

The CEO of Kering, Francois-Henri Pinault, recently visited China and was amazed by the bustling stores and the country’s recovery from the virus. He regarded this as a positive sign and welcomed the Chinese government’s efforts to boost domestic consumption. With the luxury sector now focusing on the Chinese market, the reopening of China presents a promising opportunity for further growth and success in 2023.

Useful Links:
1. LVMH Official Website
2. Kering Official Website