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An LVMH Moet Hennessy Louis Vuitton store in Shanghai, China, 29 April.
Bernard Arnault, chairman and chief executive of LVMH (LVMHF), is in China for his first visit to the country since the end of strict Covid-19 restrictions after his company posted a jump in sales due to its rapid spending on luxury in China. Goods.
The French billionaire is the latest of prominent business leaders to visit China, following trips by Tesla ( TSLA ) CEO Elon Musk and JP Morgan ( JPM ) CEO Jamie Dimon last month. Beijing has been urging global CEOs to arrest the decline in business confidence and divide Western business governments over their policies toward China.
Arnold, who was recently spotted by Musk, revealed that he was spotted at several malls in Beijing on Tuesday. State media reported.Referring to photos on Chinese social media.
Privately owned business magazine Kaijing cited photos taken by local residents of the French entrepreneur inspecting several LVMH-owned brand stores, including Christian Dior and Bulgari, in WF Central and SKP malls.
LVMH did not immediately respond to CNN’s request for comment.
LVMH CEO Bernard Arnault (centre) is seen visiting the SKP mall in Beijing.
LVMH’s first-quarter sales rose 17 percent from a year earlier, beating analysts’ estimates from a slump in China’s luxury market amid the pandemic.
The company “recorded very good picks in China, which bodes well for the rest of the year,” the company’s chief financial officer, Jean-Jacques Gioni, told analysts during a quarterly sales call in April.
Consumers were returning to the company’s stores, he said, and online sales were increasing.
“We will definitely see a normalization of this market… We are very optimistic and should benefit from the strong push from mainland China in 2023.”
Beijing called for an end to its strict and often repressive zero-covid policy in December, prompting the first burst of consumer activity after three years of lockdowns. Spending on luxury goods rebounded faster than any other sector in the first quarter.
Although economic growth has lost steam in the past two months, growth in luxury goods sales has picked up.
According to government statistics released this month, retail sales of jewelry, gold and silver rose 19.5% in the first five months of 2023, the largest jump among all commodity categories.
China was one of the world’s largest luxury goods markets before Covid hit. Bain & Company estimated earlier this year that Chinese consumer spending will account for 17 percent of the global luxury market by 2022. This is down from 35% in 2019.
But the pace is set to pick up again this year as local consumer appetite remains strong and China recovers from the Vivid impact, the consultancy said in a February report.
“Compared to other emerging markets, China will be a boom for luxury,” he said, noting that the country has many middle- and high-income consumers.
Arnott’s visit also comes as she encourages Beijing’s global CEOs to ease concerns about its foreign capital-friendly policies. Business confidence has plummeted after Chinese authorities raided several foreign consultants, leaving Western companies confused about their future in the country.
The decline in sentiment has exacerbated the country’s economic crisis, leading to a sharp drop in private sector investment and an increase in unemployment.
Late last month, Musk visited China for the first time in three years and met with several top officials who encouraged him to increase investment and jobs in the country.
China’s top leaders are also trying to separate businesses from governments in their China policy, pushing back against Western efforts to keep “risk” out of China’s economy.
On Tuesday, Chinese Premier Li Keqiang said at a World Economic Forum event that “de-risking” decisions should be taken by companies rather than governments.
“Some people in the West support the concept of reducing dependency [on China] and risk avoidance [from China]. I say these concepts are false ideas,” Lee said.
“The most sensitive are businesses. [to such risks] And they are in an excellent position to assess such risks. They should be left to come to their own conclusions and make their own choices.
“Government and relevant organizations should not overextend themselves.”
— CNN’s Wayne Chang and the Beijing bureau contributed reporting.