Astronomical high-end shopping overwhelmed luxury supply chains in China

With the restriction on global travel the fierce demand for luxury goods from stuck at home Chinese Shoppers has made it necessary to launch direct cargo flights to boost the supply of luxury goods.

In order to cater the humongous demand in luxe living segment, the logistics arm of Alibaba  launches daily cargo flights between Singapore and Hainan to move luxury goods to Chinese shoppers who have cleared out the boutiques on the mainland, as per the reports of Bloomberg.

According to Bain & Co. research, the luxury goods market in China grew 48% last year as Covid-related travel disruptions boosted domestic spending and is expected to grow  putting China on track to claim the biggest share of the luxury goods market by 2025.

Chinese govt pushes local duty free operators to up their game, encourages top foreign operators to enter the market and creates a legal framework which favors local consumption.

Customarily, Chinese shoppers tend to go on a spree on their trips aboard but as pandemic halted global travel, the mainland stores are the only place of their splurge. Cainiao, a global supply chain firm based out of China is swift to bring more handbags and watches into China as shoppers clear out high-end boutiques as companies rush to pivot their strategies to take advantage of the more than $110 billion of luxury spending trapped on the mainland.

The surge in spending in Hainan is key for luxury houses relying on Asia as a lifeline to ride out the pandemic. LVMH, which owns Louis Vuitton and Christian Dior, derived almost half of its revenue from Asia in the first quarter, and sales from the region excluding Japan has seen  a staggering 86% hike on an organic basis.

PHOTO: AFP