China`s consumption downgrade and crackdown on culture of showing off wealth LVMH sales continue to decline.

LVMH Group has reported the global revenue in the third quarter of this year (2024) was 19.07 billion euros, which decreased of 3% annually. This is the first time quarter sales decline since COVID-19. Analysts generally believe the reason that cause the sharp reduction is the demand decrease from China and Japan .

The market performance in China is particularly sluggish. Since the beginning of this year, LVMH`s in the Asian (excluding Japan) market dominated by China have continued to deteriorate with annual declines of 6% and 14% respectively in the first and second quarters, and the decline in the third quarter expanded to 16%.

Not only LVMH Group is affected by the downgrade of consumption in China, but also many boutique brands began to withdraw, lay off employees or close branched this year. British brand Burberry also reported major layoffs in July.

As China`s economy contimues to slump, the industry and analysts are generally pessimistic about the future of China`s luxury goods market.

However, China Government`s stimulus policies are concentrated in areas such as home appliance updates and electric vehicle subsidies, mainly to solve the problem of overcapacity in the manufacturing industry, and have failed to effectively boost consumer demand for luxury goods.

Additionally, China`s advocacy of common prosperity and crackdown on the culture of showing off wealth, luxury goods consumption in China is also facing increasing pressure from public opinion.