“Our digital offering in China is in its infancy,” said Johann Rupert, Richemont’s chairman, “and we believe that partnering with Alibaba will enable us to become a significant and sustainable online player in this market.”
Western companies are not the only ones looking farther afield to secure growth prospects.
Despite the vast market on their doorsteps, a handful of Chinese luxury investors have been exploring a new market of their own in search of greater returns: Europe. This year, Shandong Ruyi bought the Swiss leather brand Bally while Fosun acquired the French fashion house Lanvin, both moves devised to reap profits from their countrymen’s appetite for luxury marques that otherwise would go into the pockets of Western companies.
And for all the jitters around Golden Week, Singles Day — the annual one-day shopping festival founded by Alibaba as a time for Chinese consumers to celebrate being single — smashed all records Nov. 11 to become the biggest sales event in history. A record $30.8 billion in sales were made in 24 hours, a 27 percent increase on the total last year. Looking forward, the company said, expectations are that those figures will continue to rise.
The day after the event, Michael Evans, president of Alibaba Group, talked about it at The New York Times International Luxury Conference, held in Hong Kong: “Part of the reason we invest so much into the infrastructure of Singles Day — a day where we delivered over one billion packages in 24 hours this year — is because we believe a time will come when we will be operating at that scale every single day.”
Now, eyes are turned to see how consumer desire for high-ticket handbags, ready-to-wear and sneakers — as well as lower-priced items such as cosmetics and fragrances — will fare during the important fourth quarter of the retail calendar.
“To say that the luxury sector is entering another perfect storm would be too aggressive,” said Mr. Chauvet, of Citigroup. “Then again, when consumers don’t feel a sense of optimism or feel worried about the world around them, luxury purchases are often the first to go. For now, the industry mode has got to be ‘wait and see.’”