LVMH Chief Executive Officer Bernard Arnault kicked off his tour of China with a visit to a high-end shopping mall, with the billionaire’s efforts to woo Chinese consumers coinciding with the government’s push to build ties with foreign companies.
The French entrepreneur was spotted at a mall in Beijing on Tuesday, Global Times tweeted, citing photos taken circulating on a Chinese social media platform.
Louis Vuitton Chief Executive Officer Pietro Beccari is joining the trip, as is Delphine Arnault, Bernard’s daughter who heads Christian Dior Couture, people familiar with the trip have said, declining to be named discussing his whereabouts. The itinerary includes meetings with local teams in several cities, the people said.
Bloomberg News previously reported that Arnault was preparing for his first trip to China since the pandemic. LVMH and Dior declined to comment, while a representative for Louis Vuitton didn’t immediately reply when asked to comment.
The high-profile visit coincides with a gathering of global executives and world leaders in Tianjin, where Chinese Premier Li Qiang has sought to reset ties with major trading partners and warned of the risk of confrontation amid the campaign to “de-risk” supply chains away from the world’s second-biggest economy. President Xi Jinping separately pledged to do right by foreign investors as the country continues to open up.
Read more: Xi Vow to Protect Foreign Investors Ramps Up Charm Offensive
Beijing has already rolled out the red carpet for other global business leaders — including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon and Tesla Inc. founder Elon Musk — to try and assuage concerns that it’s become more hostile toward foreign capital. The charm offensive comes as pressure builds for officials, who face an increasingly gloomy economic outlook and have highlighted a consumption revival as core to the recovery.
“This type of visit is critical for these luxury executives because the market, consumer behavior, and the local presence of luxury brands have all changed drastically in the last three years,” said Pablo Mauron, partner and managing director for China at Digital Luxury Group. “Whether or not this represents a vote of confidence, it does reflect luxury companies’ high expectations for China.”
Sales Boom
For LVMH, the mainland has become a critical driver of growth. The country’s shoppers splurged on luxury handbags and jewelry in the first quarter after strict Covid Zero curbs were lifted, pushing the share price to a record and briefly lifting it into the world’s 10 most valuable companies.
But the past three years, in which China sealed itself off from the world to combat Covid, have also seen major consumer shifts that have sparked a reevaluation for many firms. LVMH has already moved some of its brands’ regional headquarters and senior executives to cities like Shanghai, betting that the pandemic pivot by Chinese shoppers to buying at home is likely to continue.
The growing influence of the country’s Generation Z, who are set to surpass peers in the US and Europe as the world’s biggest luxury buyers by 2025, is adding impetus to lock in a foothold, though foreign brands will need to meet the needs of increasingly discerning customers.
“The past three years’ growth should not be taken for granted,” said Mauron. “We see that most luxury companies are taking a cautiously optimistic view about this market. However, there will be challenges ahead, which will necessitate a top-down approach from the brand headquarters, complemented by authentic insights into the local scene.”
Read more: China’s Big-Spending, Picky Youth Are Global Luxury’s Lifeline
--With assistance from Jennifer Creery.
