A luxury rebound in China is fueling hopes of a rapid recovery for high-end brands. Yet analysts say the wealthy are likely spend very differently in the post-pandemic world.
— are seeing rapid bounce backs in sales as stores reopen in China, according to Claudia D'Arpizio, partner at Bain & Co who focuses on luxury. After a steep and sudden drop in the first quarter, many top brands will end up positive for 2020 in China given the strong sales, she said.
"We're seeing people come back to the stores quite quickly," D'Arpizio said. "It's not yet at the same levels yet as it was before the crisis. But revenge spending is happening — and also to some degree in Europe. The people who are coming back into the stores are strongly motivated to buy." Yet the spending of the rich will shift dramatically in the next year or two, Bain said. Instead of splurging on experiences, which dominated luxury spending over the past decade and fueled much of its growth, the rich will focus their spending on physical products.
"I think we will see a near-term rebalancing away from expensive holidays and back to products," D'Arpizio said.
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