The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
French luxury conglomerate LVMH has broken ground in Shanghai on its largest e-commerce sales and storage hub for cosmetics in the Asia-Pacific region, which is scheduled to be operational by the end of next year.
The hub will serve as an industrial base for e-commerce packaging and dispatch for the group’s cosmetics and perfume products. It covers a nine hectare area and is expected to cost nearly 1 billion yuan ($154 million).
In 2020, the Asia market, excluding Japan, accounted for 45 percent of LVMH Group’s perfumes and cosmetics sales, according to the company’s annual report, making it the largest regional market for these categories. The China market in particular was singled out for playing a key role in regional growth.
With consumers tightening their belts in China, the battle between global fast fashion brands and local high street giants has intensified.
Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.
The French beauty giant’s two latest deals are part of a wider M&A push by global players to capture a larger slice of the China market, targeting buzzy high-end brands that offer products with distinctive Chinese elements.
Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.