After two “ghost” years, China is re-emerging on the global luxury market. Bernstein analyst Luca Solca highlighted this from the stage at the Confindustria Moda general assembly. “Chinese consumers emerged from the pandemic feeling poorer and with no prospects for wage increases. They decided to save, and in 2024-25, their contribution to luxury growth was zero. But over the last 3-4 quarters, the trend has been improving. Hong Kong and Shanghai are experiencing a strong recovery. We expect Q2 to be better than the previous quarter for major companies,” Solca notes.
According to the analyst, the sector’s polarisation continues. “The more expensive the products, the more they sell. The US market is driven by the tech sector, which has created numerous millionaires and a sense of well-being among the wealthy. Retailers are doing very well with high-end brands, such as Cucinelli, Zegna and Loro Piana. Brands that cater to aspirational customers are struggling. Inflation is very high and has eroded the purchasing power of the middle class,” Solca explains.
The new tax introduced by the EU to combat the influx of ultra-fast fashion does not convince the expert. “People shop on Temu because it’s cheap. We can ban packages or impose tariffs, but the real problem remains limited purchasing power. Instead, we should be asking ourselves how to improve the standard of living for the average person. In the United States, they elected Trump because he promised to solve inflation, which has since risen. There are no simple solutions. Shortcuts don’t help,” observes Solca.
“The Italian textile industry is a tremendous asset that must be protected,” the analyst continues. “There are more and more Chinese-born brands, but at a very different price point. European brands have a solid lead in the high-end market. And Italy plays a key role alongside France. Companies will continue to source from here,” concludes Luca Solca.
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