Gen Z poses a problem for the luxury industry

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SHANGHAI/PARIS - From $300 (S$415) bucket hats to $900 sneakers and $700 t-shirts, the high-flying luxury sector is fretting over the appetite among financially stretched Gen Z consumers for such 'aspirational' purchases. Executives are troubled in particular by a hit to young Chinese shoppers, not only because mainland China has been a major driver of the industry's growth in recent...

People wearing face masks line up outside a store of French luxury brand Celine, at a reopened shopping mall amid the coronavirus disease outbreak in Shanghai, China, on May 29, 2022.SHANGHAI/PARIS - From $300 bucket hats to $900 sneakers and $700 t-shirts, the high-flying luxury sector is fretting over the appetite among financially stretched Gen Z consumers for such "aspirational" purchases.

Whereas in North America and Europe, inflation and a rising cost of living are hitting discretionary incomes of young consumers especially hard, China's problem is different. "If a recession happens, then I will 100 per cent buy less or maybe even stop buying altogether," said US-based luxury lifestyle and travel TikToker Jeffrey Huang, 28, who shares his Louis Vuitton shopping trips and hauls with his 150,000 followers.

Chanel, Louis Vuitton and Dior have raised prices on high-margin leather goods several times over the past year, with Chanel planning stores dedicated to VIP consumers.

 

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