Latest trip of LVMH owner
Billionaire Bernard Arnault - CEO of LVMH - started his business trip in China by going to a high-end shopping mall in Beijing. The French businessman was spotted at a shopping mall in the Chinese capital on June 27. The Global Times has posted a photo of billionaire Arnault on Chinese social media.
Louis Vuitton CEO Petro Beccari and Delphine Arnault, daughter of billionaire Bernard, head of Christian Dior Couture, also joined the trip.
Many sources told SCMP that billionaire Arnault's business trip included a meeting with the company's staff in several cities in China.
Recently, Beijing has laid the red carpet to welcome other global business leaders, including JPMorgan Chase Jamie Dimon and Tesla founder Elon Musk.
Pablo Mauron - CEO in China of Digital Luxury Group - commented: "This type of visit is very important for luxury brand executives because the market, consumer behavior and the presence of local luxury brands have changed dramatically over the past 3 years".
For LVMH, mainland China has become an important growth driver. Customers in this country spent money to buy luxury handbags and jewelry in the first quarter after the strict COVID-19 precautions were lifted, pushing the company's stock price to a record level and putting LVMH in the top 10 most valuable companies in the world.
However, in the past 3 years, when China applied strict COVID-19 precautions, major changes occurred with consumers, causing many businesses to re-evaluate.
LVMH has moved its regional headquarters and senior executives of some brands to cities like Shanghai because it believes that the trend of Chinese consumers buying branded goods at home may continue after the pandemic.
In addition, the growing influence of China's Gen Z is creating more motivation for businesses to consolidate their position. Gen Z customers in China are expected to surpass their counterparts in the US and Europe to become the world's largest luxury buyers by 2025. However, foreign brands will need to meet the growing demand of stylish customers.
"We should not consider the growth of the past 3 years as a matter of course. We see that most luxury companies are cautiously optimistic about the Chinese market. However, there will be challenges ahead, requiring a unified approach from the brand's headquarters, along with a clear understanding of the local context," said Mr. Mauron.
A series of other important visits
Bill Gates visited China on June 16, for the first time in four years, and met with Chinese President Xi Jinping.
Technology tycoon Elon Musk, CEO of Tesla, made his first trip to China in 3 years at the end of May.
During a visit to Shanghai in May, JPMorgan Chase Jamie Dimon signaled that the bank has no plans to leave China.
Apple CEO Tim Cook, Qualcomm CEO Cristiano Amon and Intel CEO Pat Gelsinger have also visited China in recent months.
Nikkei pointed out that Beijing has laid the red carpet to welcome executives, arranging for top government officials to meet these businessmen.
As the Chinese economy is struggling to recover after lifting the zero-COVID policy, Chairman Xi Jinping has seen foreign investment and technology as the key to ensuring stable economic growth and countering any efforts to disrupt China from supply chain linkages.
In Europe, Peter whenink, CEO of Dutch chip maker ASML, and Jean-Marc Chery, CEO of Swiss semiconductor company STMicro Electronics, have also visited China in recent months. On June 7, STMicro Electronics announced a cooperation plan to build a factory with a local partner in Trung Khanh.
In April, French President Emmanuel Macron visited China with a delegation of top corporate executives, including the head of Airbus. German Chancellor Olaf Scholz visited China with business leaders last fall. China responded by sending a delegation led by Prime Minister Li Qiang to Germany on June 20 this year.
