Hard luxury goods are not selling well in China. Richemont, the parent company of Cartier and Van Cleef & Arpels, has seen sales in China fall for three consecutive quarters.
Swiss luxury giant Richemont Group released the third quarter data for fiscal year 2025. From October 1 to December 31, 2024, Richemont Group’s sales increased by 10% year-on-year to 6.15 billion euros (about 46.409 billion yuan), far exceeding the market’s expected increase of 1%.
This is mainly due to the strong performance of the European and American markets. As of December 31, Richemont Group’s sales in Europe, the United States, Japan, the Middle East and Africa all increased by double digits, among which the group’s sales in the United States increased by 22% year-on-year to 1.647 billion euros (about 12.426 billion yuan), which is the region with the highest sales growth. Sales in Japan and Europe also increased by 19% year-on-year, and the Middle East and Africa increased by 20%.
However, the Asia-Pacific market, which has the largest sales volume, has become a burden for the Richemont Group.
In the quarter ending December 31, the Asia-Pacific market, where China is located, was the only region where Richemont Group experienced negative sales growth, with sales in the region falling 7% year-on-year to 1.913 billion euros (about 14.433 billion yuan). Richemont Group pointed out in the report that this was mainly due to weak demand in the Chinese market, including a 18% drop in sales in the Greater China region, where mainland China, Hong Kong and Macau are located. However, other regions in the Asia-Pacific market performed well, and sales in the Korean market also grew by double digits.
This is not the first time that Richemont’s sales in China have fallen year-on-year. In the first and second quarters of fiscal year 2025, Richemont’s sales in the Asia-Pacific region fell by 18% year-on-year, and sales in Greater China fell even more, reaching 27%.
The decline in high-end consumption power in the Chinese market is the consensus of many fashion industry professionals when analyzing Richemont Group’s weak sales in China.
Zhou Ting, a luxury goods industry expert and director of the Yaoke Research Institute, told Times Finance that Chinese consumers’ consumption habits and spending power are changing. “High-end consumers lack confidence in the future, while mass consumers’ spending power has dropped sharply. The luxury consumption driven by mass consumption upgrades has almost disappeared. On the other hand, consumers are becoming smarter and more rational, which has led to a decrease in the mystery and novelty of luxury brands. The concept of luxury brands maintaining and increasing value is also being challenged in the face of weakening demand.”
She also pointed out that in the past, luxury groups had over-marketed to young people in the Chinese market, but the spending power of this group of people is not as high as before.
From the perspective of specific business, Richemont Group, known for its “hard luxury”, is facing multiple challenges in the Chinese market.
Richemont, which owns many high-end watch brands such as Vacheron Constantin, Jaeger-LeCoultre, A. Lange & Söhne, and Panerai, has to face the “cooling down” of the Chinese watch consumption market. Financial report data shows that Richemont’s watch business sales have also fallen for three consecutive quarters in fiscal year 2025, with declines of 13%, 19% and 8% respectively; in the first three fiscal quarters, the overall sales of the department fell by 13% year-on-year.
