Driven by short-term pessimism, luxury shopping malls in China have begun to hand out shopping vouchers in a bid to bump up transaction volumes in the second half of 2024. Wuhan International Plaza, a legacy luxury retailer in China’s mid-land hub, unveiled a points-reward system in July across different tiers of luxury brands that allowed shoppers to use vouchers on luxury goods, which was reframed by Chinese netizens as a considerable 15% to 30% discount. As the news of ‘Japanese prices in Wuhan’ spread on social media like wildfire, shoppers from all over China flocked to the mall, where they queued for up to four hours at stores like Louis Vuitton, Dior, Prada and Miu Miu, all brands well-received by the market.

A recent report from UBS pointed out that China’s domestic luxury goods sales have fallen by 10% in the first seven months of 2024, which means brands may slow their pace of opening new stores in China between the second half of 2024 and 2026. Facing rental pressure, UBS said luxury shopping malls may have to reduce rents or transform into daily-life-oriented commercial centres. According to data from Stylensight, brands favoured by Chinese shoppers in Japan are Prada, Miu Miu and Louis Vuitton labels, which recorded 55% growth for Prada Group and 57% for LVMH in the market during Q2, driven by tourism. Back at home, the increasingly rational Chinese consumer has begun to offload luxury goods on the secondary market in droves - as did the Japanese during that country’s 1990s economic slump - which gives rise to a robust second-hand luxury goods market and grey market.