Recently, the news that Louis Vuitton (LV), a French luxury brand, will open a shop in Yangshuo, Guilin, China, spread on social platforms such as Little Red Book and Tiktok.
Some Chinese netizens have questioned whether this is a counterfeit LV store, as Yangshuo is just a small county town. However, others believe that this may be because LV is no longer available for sale, so they are starting to sink into third – and fourth tier areas, targeting affluent “county ladies”.
LV has not responded to this yet, and its official website also shows that there are only more than 60 franchised stores in Chinese Mainland, basically in the first and second tier cities. However, if the news from the Yangshuo store is true, the outside world may not be surprised at all. After all, Yangshuo is a tourist hotspot, receiving over 20 million visitors last year.
LVMH, the parent company of LV and the world’s largest luxury goods giant, released its first quarter financial report on the 16th of last month. According to Bloomberg, the organic revenue of the fashion and leather goods division, the largest division of the group, increased by 2% in the first quarter, compared to an 18% increase in the same period last year. LVMH’s fashion and leather goods department includes brands such as LV, Christian Dior, Celine, etc.
Excluding the COVID-19 pandemic in 2020, the growth rate in the first quarter of this year was the slowest since 2016.
According to the Daily Economic News, in terms of sales regions, sales revenue in the Asian market (excluding Japan) decreased by 6% year-on-year. Nevertheless, LVMH CFO Gioni said that Chinese consumers still contributed 10% year-on-year to LVMH’s fashion and leather goods division in the first quarter.
It is worth noting that a considerable proportion of consumption remains in Japan. In LVMH’s first quarter financial report, Japan was the only market to record double-digit sales growth.
