How omnichannel strategies drive success in China's luxury retail market?
The initial decrease in the personal luxury market in five years was due to continuing Covid-19 restrictions and economic instability but despite this setbacks in 2022, China is still the most promising market for luxury goods. How will luxury consumption recover once mall traffic improves and consumer sentiment rebounds?

China’s luxury market saw a 10% year-over-year decline, ending a period of rapid growth. Business disruptions from Covid-19 caused the downturn. Despite this, the foundations of luxury consumption remain strong, and experts expect growth to rebound soon.
China’s luxury market experienced significant growth, doubling in size. However, this growth halted due to the country’s strict zero-Covid policies. Lockdowns across major cities disrupted economic activities, leading to store closures and the first major downturn for most luxury brands.
Nicolas Nesme, VP at VISEO China and David Liu, Cegid Practice Manager at VISEO APJ share insights into the luxury retail sector in China, highlighting emerging trends and challenges in the expansion of personal luxury.
Varying impact across luxury categories
Chinese luxury consumers mostly shopped within the mainland due to closed borders. But lockdowns hindered purchases further. Sudden shutdowns in key cities disrupted in-person shopping, weakening consumer sentiment. The real estate market’s decline, rising unemployment, and Covid-related anxieties worsened the situation. Even after restrictions eased, many preferred to stay home.
Interestingly, while foot traffic declined, luxury sales did not fall as sharply, thanks to higher conversion rates. Consumers became more targeted, opting for quick shopping trips instead of browsing casually. All luxury categories faced challenges, but some fared better. Categories with strong online presence, like luxury beauty (with 50% online penetration), contracted by only 6%, according to Bain & Company.
The impact on non-beauty categories followed past trends. Jewelry and leather performed best, fashion held a middle ground, while watches struggled the most.
China’s luxury market remains promising
Experts anticipate a recovery in luxury consumption as Covid-19 fades, mall traffic improves, and consumer confidence returns. Sales could match previous high levels.
Hainan is expected to reclaim its status as a key travel destination, especially for Chinese travelers without passports. International travel demand will rise, starting with nearby Asia-Pacific regions like Hong Kong, Macau, and Southeast Asia.
Chinese luxury consumers have unique shopping habits and preferences, setting the Chinese market apart from global trends. Digitalization, retail environments, cultural influences, and brand relationships will continue to differentiate China’s luxury market. Brands that understand and cater to these distinctions are more likely to thrive.
Importance of an omnichannel strategy for specialty Retailers
To stay competitive in a rapidly evolving market, it’s essential for luxury brands to adopt an omnichannel strategy. Partnering with strong cloud-native POS systems like Cegid and unified commerce platforms allows specialty retailers to increase profitability and streamline operations. These platforms drive retail activities and enable seamless omnichannel customer experiences. Engaging in-store employees with real-time insights, anywhere in the world, ensures that brands can meet customer expectations with confidence.
Omnichannel strategies integrate physical and digital touchpoints, offering customers a cohesive shopping journey, whether they’re browsing online or visiting a store. By investing in this approach, luxury retailers can enhance customer loyalty, drive sales, and maintain high service standards across locations.
Challenges ahead for brands
However, brands must address several risks. Pricing discrepancies between China and Europe need resolution before international travel fully resumes. Although airlines have not yet restored full operations, demand is expected to increase soon. Exchange rate fluctuations will also affect travel decisions.
Over recent years, brands invested heavily in customer experience and service in China. As a result, customer expectations have risen. Brands must ensure their CRM tools work seamlessly across borders to maintain growth and deliver consistent, high-quality experiences globally.
Streamline your retail operations globally with Cegid in Asia
Deliver an exceptional, personalised customer experience through dedicated store teams that truly represent your brand. Ready to elevate your profitability with VISEO and Cegid?
By bringing together VISEO’s comprehensive industry insights and technology experience with Cegid’s advanced capabilities, we can make our clients’ digital strategy a reality, allowing them to be more productive, innovative, and competitive.