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How China’s ‘Revenge Travel’ Will Boost Luxury

Mainland shoppers have flocked to local tourism hubs like Macau and Hainan over Chinese New Year and are expected to visit Asian destinations like Thailand and Singapore before returning in droves to European fashion capitals later this year.
Tourists seen walking through The Grand Palace's gate in Bangkok.
Tourists walking through The Grand Palace gate in Bangkok, Thailand at the start of the Chunyun travel period during Jan. 2023 Chinese New Year festivities. (Getty Images)

Key insights

  • Chunyun travel is mostly domestic in nature but the holiday period also serves as a barometer for outbound travel in the post-'zero-Covid' era.
  • Pent-up demand for travel in China is intense but international departures remain almost 90 percent below pre-pandemic levels.
  • The bulk of mainland visitors are so far opting for shopping hubs closer to home like Macau, Hong Kong, Thailand, Taiwan and South Korea.

After three years of shopping for luxury goods at home — both through apps like WeChat and boutiques across China — twenty-nine-year-old Jojo Wang was thrilled to be back in Paris during Chunyun, the travel period that bookends the Lunar New Year festivities.

“I’ve been back to all the stores and restaurants I used to visit; it’s hard to believe so much time has passed,” the Shanghai native told BoF after exiting Chanel’s Rue Cambon flagship, where she purchased one of the brand’s iconic leather flap bags in time for Chinese New Year on Jan 22. “I’ve invested in bits and pieces in the last couple of years but spending during a long-awaited trip abroad does feel different.”

Wang is just one of the Chinese visitors who returned to international luxury retail hubs for the week-long Spring Festival national holiday period during Chunyun, after the easing of strict isolation requirements for inbound travellers was announced on December 26 and put into effect in January. According to, search rates for outbound flights were up 83 percent in the 10 days after the sudden changes to the government’s zero-Covid policies.

But the bulk of mainland Chinese visitors aren’t flocking to far-flung luxury meccas in Europe just yet. Rather, they’re opting for shopping hubs closer to home: Macau, Hong Kong, Thailand, Taiwan and South Korea were, in that order, the most popular outbound destinations during the holiday, data reveals.

The lion’s share of Chunyun travel has always been domestic and centred around visiting hometowns for family reunions. This year was no exception: China’s Ministry of Transport reported that over 42 million domestic trips took place on January 21, up 57 percent from the same day in 2022. In contrast, international departures from China remain almost 90 percent below pre-pandemic levels, according to aviation data firm Cirium.

“In the immediate term, we’re talking a lot more about domestic travel,” said Jacques Roizen, managing director of consulting at digital marketing agency DLG China.

When it comes to Chinese travel and spending, a global return to pre-pandemic numbers is going to take more time — especially considering the cloud zero-Covid policies cast on consumer confidence. Moreover, flights are scarce and expensive with airlines taking a wait-and-see approach to China’s reopening, and a significant number of citizens now hold expired passports and visas after a years-long suspension of issuances and renewals.

Hotels and other businesses in the travel sector are also facing capacity challenges, which prompted LVMH-owned travel retailer DFS Group to take a “cautiously optimistic” approach to performance during the holiday, said chairman and CEO, Benjamin Vuchot.

There’s also an undercurrent of wider anxiety around long-haul travel and catching or spreading Covid-19. Numerous reports indicate that infection rates within China have surged as hospitals overcrowd and drugs shortages hit pharmacies, but Beijing has said that critical cases and deaths are down 72 percent and 79 percent respectively from last month’s peak.

Nonetheless, for many luxury businesses around the world, the reopening of China’s travel corridors is — however tentative — a relief.

Investment bank Citi forecasts that global tourism will start to see a solid recovery in Q1 and a rebound in Q2; in a memo published mid-January, the United Nations World Tourism Organisation predicts that global tourism will recover to 80 to 95 percent of pre-pandemic levels this year. Other estimates are more conservative, particularly those for China. This month, McKinsey partner Steve Saxon told CNN that Chinese outbound air passengers would recover to around 50 percent of 2019′s 12 million per month by the summer.

“2023 is going to be a transition year,” says Roizen. Once less risk-averse travellers start posting about their trips on social media, “there’s going to be a tsunami of Chinese tourists who [also] say, ‘I’m ready.’”

Great expectations

Luxury industry executives are feeling increasingly encouraged by early signs of pent-up demand for travel, known as ‘revenge travel’, among Chinese shoppers and expectations that some will return to ‘revenge spending’ sprees akin to those seen in 2020.

LVMH chairman Bernard Arnault said during the group’s results conference on January 26 that “we have every reason to [be] confident, indeed optimistic, on the Chinese market,” adding that the outlook hinged on the continuation of the Chinese government’s current reopening trajectory. Though he remarked on Chinese tourism’s strong recovery and high footfall in cities like Macau, Arnault predicted that mainlanders won’t be travelling to France in large numbers until at least the second half of 2023.

The mood was recently summed up by Hong Kong-based Imke Wouters, partner at consulting firm Oliver Wyman, who said that while brands and retailers are readying themselves for a “bumpy ride to the start of the year...we are much more positive about 2023 now than we were a few months ago.”

China’s reopening comes at a crucial juncture for the global economy, with European and American shoppers expected to tighten their belts due to the ongoing energy crisis and high interest rates among other factors.

“No one should expect the floodgates to suddenly open and an instant return to pre-pandemic 2019 travel levels,” says Martin Moodie, Hong Kong-based founder of travel retail business intelligence publication, The Moodie Davitt Report. “But make no mistake, the Chinese are coming back as a pivotal force in the global travel and travel retail sectors.” Moodie noted already seeing upswings in destinations like Thailand, Indonesia, Vietnam and the Philippines.

Due to heightened risks around the virus, Bernstein’s Luca Solca expects the first quarter of 2023 to be the hardest for luxury brands, before a “western-like rebound” buoys the sector. Brands are set to benefit from both a boost in foot traffic in China, as well as the return of Chinese visitors in boutiques and travel retail outlets overseas.

Beijing’s previously strict measures make a strong recovery all the more likely, even if it ends up being more gradual than some expect. Pent-up demand for outbound travel is “intense” among the Chinese, says Moodie, as is a pent-up appetite to spend, where many consumers have saved money throughout the pandemic.

Some brands are erring on the side of caution before pinning their hopes on a dramatic rebound. “The reality is that we are planning for Q1 to be a relatively challenging environment from a footfall perspective, which may spill over into Q2,” says Sarah Rotheram, CEO of Anglo-French perfume brand Creed, which in addition to its online channels operates 14 locations across mainland China, Hong Kong and Macau. A further uptick in coronavirus cases, particularly after the Chunyun travel spree, could hit physical stores hard.

But the long-term view remains optimistic for Chinese travel retail spending. Rotheram expects duty free sales to be a victory for Creed both domestically and globally, and considering this expects the brand’s China business to double in size this year.

“The numbers may still be small compared to pre-pandemic levels, but you will find that Chinese travellers are already having a transformative impact on average spends,” says Moodie.

Tilting the Balance

Pre-pandemic, Chinese shoppers made up a third of global luxury spending, according to Bain; two-thirds of that was happening outside the mainland. Demand has suffered in the wake of last year’s extended lockdowns, rising youth unemployment and a nationwide property crisis. This month, official data revealed China’s economy grew 3 percent in 2022, much less than in 2021 and below Beijing’s target of 5.5 percent.

Yet the mainland is still expected to surpass the US and Europe as luxury’s biggest spending geography by 2025. Indeed, a recent McKinsey report predicts that China will gain 71 million upper-middle and high-income households in the next three years, signalling major reserves for consumption growth, particularly when it comes to premium and luxury goods.

That does not mean luxury will be reverting back to its 2:1 ratio in favour of Chinese spending overseas in the long run. “Habits have been formed, and [companies] are aiming for 50-50 or 60-40 in favour of spending domestically,” said Roizen.

Brands will be kept busy as this plays out. Once consumer anxiety around long-haul travel eases and logistical factors catch up with demand, retailers are likely to see a spike in spending overseas and will need to adapt. London department store Harrods, for example, is stocking up on products designed to meet Chinese consumers’ specific expectations for fit for the first time since 2019, its managing director Michael Ward recently told the Financial Times.

Most companies have built up impressive customer relationship management systems in the mainland over the last three years, which should make connecting clients with Chinese speaking sales contacts abroad (particularly in 2023 travel hot spots like Thailand, Taiwan and South Korea) straightforward. Beyond that, making the most of flagships to boost awareness around heritage and craftsmanship, as well as renewing discussions around price gaps between regions, will be crucial to capturing demand elsewhere.

Luxury brands’ price harmonisation efforts will continue to be a factor in where Chinese travellers decide to shop. The likes of Chanel have steadily increased prices throughout the pandemic (including three hikes in 2021 alone) to reduce price gaps between markets and account for inflation and currency fluctuations. Others, like LVMH and Prada, indicated in 2022 they were monitoring gaps but weren’t in a rush to amend differences to achieve parity.

As currency fluctuations continue to distort prices amid the resumption of international travel, some Chinese shoppers could be encouraged to buy through sellers known as daigou, a grey market trade that was disrupted by the pandemic.

Winners and Losers

It’s clear that the long-term repatriation trend for luxury spending is great news for Chinese retail hubs like Hainan, as well as downtown duty-free destinations in cities like Shanghai and Chongqing.

According to a recent report by KPMG and DLG, Hainan was listed as the most sought-after domestic destination with 30 percent of respondents interested in visiting the island. The island “will not only hold but strengthen its place in the travel shopping firmament,” said Moodie, noting the allure of its 100,000-yuan ($14,500) annual duty-free allowance and proximity to the rest of the mainland. Another boon to the island is the fact that the estimated 87 percent of Chinese citizens who do not hold passports can travel there.

Around 32 percent of respondents to the joint survey chose domestic cities as their go-to destinations, beating cities in Europe, which were chosen by 26 percent, and America, with just 6 percent. Asian shopping hubs will continue to benefit most in the short-term, especially as fears persist of another surge of Covid-19, with the report finding that Singapore had overtaken Paris in planned destination rankings for the first time.

Complications to this picture have emerged though, with countries like Japan, South Korea, and the US instating negative Covid-19 test requirements for Chinese travellers. Beijing has deemed such moves discriminatory, and on January 10 retaliated by suspending the issue of short-term visas to China in South Korea and Japan; Chinese netizens have also criticised policies requiring Chinese inbound travellers to wear colour-coded tags at airports.

“These things don’t tend to last; countries will realise they’re missing out,” said Roizen, pointing to Singapore and Thailand, which announced they would not adopt special measures for Chinese tourists; Thailand has even introduced a red carpet and souvenir hand-outs, sometimes fronted by dignitaries. “This is the smart way to go.”

In recent years, most big luxury brands have gotten better at pivoting to meet Chinese shoppers wherever they go. With the global travel industry in a state of flux and China still in an early phase of its reopening, major players will need to draw on this flexibility even more in the year ahead — and sometimes at short notice. Brands with a smaller global footprint, however, will need to find creative solutions to tap into China’s gradual outbound travel rebound.


by Annachiara Biondi



LVMH is on a hiring spree targeting young people under the age of 30.

LVMH Optimistic on China’s Rebound After Government Policy Reversal

Strict ‘zero-Covid’ restrictions put in place by the Chinese government last year hit sales at Richemont, Burberry and LVMH in the last three months of 2022. At Richemont and Burberry, revenue from China dropped 24 and 23 percent respectively in the period. At LVMH, sales in Asia (excluding Japan) fell 8 percent in the fourth quarter. Despite the headwinds in China, luxury executives are confident that the country will see a v-shaped recovery in the new year as it leaves behind Covid-19 curbs and the government puts in place measures to spur consumer spending. “There’s been an extremely strong start to 2023…if it continues like this it should be a very good year,” LVMH chairman Bernard Arnault told analysts. (BoF; BoF)

Swatch CEO Bets on Full Recovery of Chinese Watch Market

According to Nick Hayek, CEO of Swatch Group, a strong rebound in China could propel the company’s revenue to a record 9 billion Swiss francs ($9.8 billion) in 2023, above analysts’ expectation of 8.1 billion francs. A recovery would be good news for Swiss watchmakers, who are significantly exposed to the Chinese market. China used to be the largest export market for Swiss watches, but lost its crown to the US in 2022, with exports falling 13.5 percent to 2.6 billion Swiss francs ($2.8 billion) last year. Luxury watches also lost as much as 50 percent of their value on the secondary market in China in 2022 as consumers cut spending. Sales at the Swatch Group, which owns high-end brands such as Omega, Tissot and Longines, in addition to its more affordable namesake, increased 2.5 percent to 7.5 billion Swiss francs ($8.16 billion) in 2022. (Bloomberg; Forbes; Financial Times)

Luxury Brands Go Beyond Clichés to Celebrate Year of the Rabbit

Luxury brands including Prada, Miu Miu and Bottega Veneta were less obvious in their Chinese New Year capsule collections and campaigns this year, espousing a more sophisticated approach. In Prada’s ‘Memories of Beauty’ campaign, singer Cai Xukun, actress Chunxia, actor Bai Yufan and model Du Juan were shot next to objects reminiscent of cherished Chinese New Year moments in a celebration of memory. Miu Miu opted for a subdued take on the theme with its ‘Shine A Light’ collection, which featured only subtle nods to the Year of the Rabbit. At Bottega Veneta the focus was on the journey made by many to rejoin family and friends in celebration of the holiday, especially significant this year as Chinese citizens were allowed to travel without restrictions for the first time since 2020. The brand’s ‘Reunion in Motion’ campaign included a short film by director Jess Jing Zou depicting train, car, bus and ferry journeys across the many different landscapes of China. (Jing Daily)

Louis Vuitton Taps Patriotic Pop Star Jackson Wang

Louis Vuitton named singer Jackson Wang as its latest brand ambassador, after the popstar made an appearance at the brand’s autumn/winter 23 menswear show in Paris. The celebrity is one of China’s most internationally renowned stars and has already collaborated with fashion brands including Fendi, Cartier and Armani Beauty, as well as launching his own fashion label Team Wang. Wang, who was born in Hong Kong and owes much of his career to his K-pop training in Seoul, is well-known for his staunch patriotic stance, which he recently reiterated during a gig in London, where he fiercely criticised the coverage of China in Western media. (LifeStyleAsia)



Luxury shoppers in China outside a Prada store.

Chinese Consumers Travel and Spend Locally for New Year

Chinese citizens made 226 million domestic trips during the Lunar New Year holiday, the highest number since 2020. Many also decided to travel abroad, choosing close-to-home destinations such as Hong Kong, Macau, Bangkok and Singapore for a total of 2.88 million international trips. Both sectors lagged behind pre-pandemic levels — in 2019 domestic trips reached 421 million and international trips hit 12.53 million — but the results signal a positive recovery of tourism. Luxury brands in particular are hoping that the recent lifting of travel restrictions will lead Chinese consumers to travel and shop overseas in droves again, but analysts expects a growing share of China’s luxury spending to remain in domestic locations such as Hainan. (CNN, BoF)

Shein Valuation Could Be Slashed in New Fundraising Round

China-based ultra fast-fashion e-commerce platform Shein is reportedly looking to raise new funds from existing investors such as Abu Dhabi’s sovereign fund Mubadala, venture capital group Sequoia China and private equity group General Atlantic. The sum, $3 billion, would bring the platform’s valuation to $64 billion, a decline of more than a third from its peak $100 billion valuation in April 2022. Shein denied the accuracy of some of the information in reports. Like other tech and tech-adjacent companies, Shein has been negatively impacted by a funding crunch caused by a series of headwinds including the war in Ukraine and a decline in venture capital funding. The company’s growth has also seen a slowdown in the US and it paused plans for an IPO at the beginning of 2022. (BoF, Financial Times)

China’s 2022 Retail Sales Decline 0.2 Percent

According to the National Bureau of Statistics, China’s retail sales, including apparel, cosmetics and jewellery, dropped 0.2 percent year on year to 43.97 trillion yuan ($6.51 trillion) in 2022. Better than expected results in December, when sales fell 1.8 percent as opposed to the expected 8.6 percent, helped to soften the decline. China’s online retail sales registered a positive 4 percent year-on-year growth to 13.8 trillion yuan ($2 trillion). The country’s consumer price index (CPI), a measure of inflation, increased 2 percent last year but Kang Yi, director of the National Bureau of Statistics, said he is confident consumer prices will be stable in 2023. CPI was flat on a monthly basis in December. (CNBC, Fibre2Fashion)



China’s reports a 25 percent jump in quarterly revenue. Shutterstock. to Shut Indonesia, Thailand Shopping Sites

Chinese online retailer is closing its Indonesia and Thailand e-commerce sites as the company shifts its overseas strategy toward supply-chain and logistics services. in Indonesia will stop accepting orders from mid-February and all services will be stopped by the end of March, while JD Central in Thailand will cease its operations from March 3, according to statements on the businesses’ websites. The company, which is Alibaba Group’s biggest rival, is pivoting its international businesses toward services such as supply chain management and warehousing. It is among Chinese tech giants that are curbing spending to weather slowing growth caused by three years of Covid restrictions and the government’s crackdown on powerful internet firms. (BoF)

Cotton Imports from US Surge in China After Xinjiang Ban

Following last year’s US ban on cotton and cotton products from the Chinese region of Xinjiang, China has increased the amount of cotton that it imports from the US. In the first eleven months of 2022, China imported cotton worth $2.899 billion, compared to a total value of $1.601 billion in 2021. Meanwhile in the UK, a high court judge ruled against the World Uyghur Congress and the Global Legal Action Network in a case claiming that the UK government had failed to investigate conditions in which cotton imported in the country was produced. The judge, however, said that the ruling didn’t “in any way undermine the striking consensus in the evidence that there are clear and widespread abuses in the cotton industry” in Xinjiang, “involving human rights violations and the exploitation of forced labour.” (Fibre2Fashion; AP News)

China Textile and Garment Exports Show Modest Growth in 2022

China’s textile exports grew 2 percent year-on-year to $145.1 billion in 2022, while exports of apparel grew 3.2 percent to $175.4 billion, according to the General Administration of Customs of China. The modest increase in the textile and apparel sectors mirrors a widespread slowdown in China’s exports, which in 2022 grew 7.7 percent compared to 29.6 percent in 2021. Meanwhile, weaker global demand for Chinese goods, as well as labour shortages and factory closures caused by the recent surge in Covid-19 infections in the country, are leading shipping carriers to avoid Chinese ports because of fear of delays or insufficient available cargo. The industry expects to receive a boost from the recent loosening of Covid-19 restrictions and a possible drop in infections. (Fibre2Fashion; Reuters; Financial Times)

Vote on US TikTok Ban Confirmed for February

The US House Foreign Affairs Committee confirmed that in February it will hold a vote on a bill that, if passed, will aim to block the use of ByteDance-owned TikTok in the United States on the basis of national security concerns. The bipartisan legislation was introduced in December by Republican Senator Marco Rubio, but the US has long been concerned about the app’s collection of US citizen data and the influence of the Chinese government on the app, which has more than 100 million users in the US. In 2020 President Donald Trump signed an executive order to block users from downloading the app, followed by an order for ByteDance to divest its US operations, but they never came into effect. Some 25 US states have already banned TikTok on government-owned devices. Meanwhile, TikTok CEO Shou Zi Chew agreed to appear before the House Energy and Commerce Committee on Mar. 23. (Bloomberg; Wall Street Journal)



A shopping street in Wuhan, China during Golden Week in 2019.

China Population Sees First Drop in 60 Years

China’s population decreased to 1.4118 billion in 2022, a drop of 850,000 from 2021 and the first fall in 60 years. The country also reported its highest death rate since 1976, with 7.37 deaths per 1,000 people, and a record-low birth rate, with 6.77 births per 1,000 people. China’s demographic decline is expected to continue, led by economic uncertainty, rising cost of living, growing unemployment and social changes, as well as the long-standing effect of the government’s one-child policy, which was in effect between 1980 and 2016. The country’s demographic crisis is expected to have long-term consequences on both the domestic and global economy. (BBC)

China Says Covid Wave Has Peaked

According to the Chinese Centre for Disease Control and Prevention, hospitals across the country registered 6,364 deaths linked to Covid-19 between Jan. 20 and Jan. 26, almost half the number recorded the previous week. The CDC also said that Covid-19 related deaths and the number of critically ill patients in hospitals declined by more than 70 percent after peaking in early January, but experts suggest numbers could be higher as China only reports deaths occurred in hospitals. Earlier this month officials revealed that more than 1.1 billion people had been infected since restrictions were lifted in December. (Bloomberg)

China’s ‘Revenge Spending’ Key to Global Economic Recovery

Chinese consumers are expected to boost international growth as they give way to pent-up demand after a year dominated by stringent restrictions and financial difficulties that have led citizens to accumulate a record 17.8 trillion yuan ($2.6 trillion) in new savings. Optimistic economists believe that Chinese households will unleash as much as 4 trillion yuan of excess savings, driving a recovery in global economic growth that will start to materialise at the end of 2023 and continue in 2024. Other analysts are more cautious pointing to lingering uncertainties in the economy. (Financial Times)

China, US Seek to Enhance Cooperation, but Tensions Remain

After meeting for the first time in person in Zurich on Jan. 18, China’s Vice Premier Liu He and US Treasury Secretary Janet Yellen said the two countries would improve cooperation on issues such as the economy and climate change, enhance communication and strive to maintain the overall stability of Chinese-US relations. The meeting followed a speech by Liu at the World Economic Forum in Davos, where the politician urged global leaders to abandon the “Cold War mentality” and reassured the audience that China was recovering and ready for business. Still, relations between the US and China remain fraught over issues including technology, trade and Taiwan. (Reuters, New York Times)

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