Editor’s Note
Recent data from Richemont highlights a significant shift in Chinese luxury spending, with a marked recovery in Hong Kong and Macau contrasting with earlier declines. This suggests a rapid rebalancing of regional consumption patterns as travel preferences evolve.
Chinese Luxury Consumption Returning: From Japan to Hong Kong
According to the latest half-year report (ending September 30, 2025) released by Swiss luxury giant Richemont, the Chinese market showed a distinct “V-shaped” reversal in the first half of the fiscal year:
– First fiscal quarter (April to June): Combined sales in “Mainland China, Hong Kong, and Macau” decreased by 7% year-on-year (at constant exchange rates).
– Second fiscal quarter (July to September): Combined sales in this market achieved 7% year-on-year growth (at constant exchange rates).
The financial report clearly stated that the recovery in the second quarter was primarily led by strong growth in the Jewelry division, while demand for the Specialist Watchmakers division in the Chinese market remained weak.
During the post-earnings conference call, Richemont Group CEO Nicolas Bos revealed a quite significant sales return in the purchasing behavior of Mainland Chinese clients, particularly from Japan back to Hong Kong. He elaborated on his views regarding the Chinese market’s trajectory and shared his insights into the profound evolution currently taking place among China’s luxury shopping population.
Detailed Analysis of the 7% Growth
During the conference call, Nicolas Bos provided a more detailed breakdown of the “7% growth in the Chinese market in the second fiscal quarter,” clarifying the key role of the Hong Kong and Macau markets, as well as the subtle changes in the Mainland China market.
“We have indeed seen an improvement, particularly in the last quarter. Within what we call Greater China, the growth was indeed driven by an improvement in Hong Kong and Macau business, both from tourists (i.e., Mainland Chinese tourists going to Hong Kong and Macau) and local clients (particularly local clients in Hong Kong).”
“What we see is, I don’t know if it’s stabilization, but the region returned to positive performance, including Mainland China turning slightly positive at the very end of the reporting period (referring to September), which was clearly driven by the Jewelry division.”
When analyzing Chinese consumers, Nicolas Bos mentioned an important trend twice: consumption return. However, the “return” he pointed out is not from overseas back to Mainland China, but from other overseas markets (such as Japan) back to Hong Kong.
“Overall, we are observing a quite significant sales return in the purchasing behavior of our Mainland Chinese clients, particularly from Japan back to Hong Kong.”
China as a ‘Highly Mature’ and ‘High Purchasing Power’ Key Market
Despite market volatility and changing growth patterns, Richemont’s senior management reaffirmed its long-term commitment to the Chinese market, viewing it as a key market of “high maturity” and “high purchasing power.”
“The Chinese market is entering a completely new, more mature phase.”
“We have already seen stabilization in the market itself. Will it last? Have we bottomed out? We never know, and we cannot predict. But it seems to be stabilizing, both in Mainland China and in overall sales to Mainland Chinese tourists (whether domestic sales or tourist sales).”
“If we can foresee anything, it’s that this market is indeed reaching another new level of complexity and quality of demand, very similar to what we see elsewhere in the world. This has an impact on every brand, every category, every collection. But overall, it seems to be stabilizing,” Nicolas Bos added.
“What we see is that the appeal of certain brands remains extremely, extremely important, the appeal of certain collections, certain product lines, perhaps the most iconic, most historic collections, their appeal in the present moment, we see it continuing to strengthen.”
“For the Chinese market, I wouldn’t say ‘very optimistic,’ but optimistic to some extent. It’s a very, very mature culture. Obviously, there is high purchasing power there. We cannot predict how it will evolve quarter by quarter. But we will continue to invest in our presence in China, in the quality of our presence, in the development of our brand awareness and appeal, retail network, exhibitions, and events.”
“We believe it will continue to be a very, very important market, even if we may not see the kind of (explosive) growth we saw in previous years anymore.”
Chinese Consumers Becoming More Demanding, Discerning, and Differentiating
During this conference call, Nicolas Bos also shared insights into the current evolution of Chinese consumer mindset and behavior.
“We seem to be at a level now where the purchasing power of Chinese clients is more stable.”
“What we see broadly is that consumption in China is evolving, which may be related to the economic situation, but also to the evolution of taste. We see Chinese clients becoming much more demanding, discerning, and differentiating when choosing brands and building connections, which has a positive impact on the Jewelry division. We still see some watch brands facing a more challenging situation.”
Based on the above consumer insights, Nicolas Bos further explained the divergent performance of different business divisions within the group in the Chinese market.
“What we clearly see recently is that most of our (watch) brands are stabilizing. Their situations are very different, for example, the weighting of different regions varies, some brands were very successful in Asia and China in the past. Of course, the slowdown in China hit them harder than brands more focused on the US or European markets.”
“China is a very, very strong market for Cartier, but the team is looking at how to ensure Cartier is ready for the next phase of the Chinese luxury industry.”
