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.
Beijing’s Covid-19 policy shift will give the sector a boost in 2023 but a surge in infections and sluggish economic growth could dampen the recovery after an uplift from Chinese New Year.
This week, China rolled back some strict zero-Covid measures, opening a road to recovery for luxury and retail. But the journey is likely to be long and bumpy, experts warn.
Despite disappointing Singles Day sales results, harsh Zero Covid restrictions and supply chain woes, international beauty conglomerates continue to see China as a growth engine.
Disappointing sales were only part of the story, as brands increasingly used the world’s biggest online shopping festival as a marketing moment.