Luxury leather goods, in common with other areas of personal luxury, saw sales plummet in 2020 as a result of both the marked decline in inbound tourism, especially from Mainland China, and local consumers’ reluctance to visit physical stores during the pandemic. The sharp fall in the number of inbound tourists led many luxury brands to close stores located in tourist areas because of high rental fees.
E-commerce registered dynamic growth in 2020, albeit from what was a relatively small base prior to the pandemic. In 2021, this momentum has continued, albeit at a slightly slower rate, as brands have been developing their online sales operations.
While demand fell sharply across luxury leather goods, internationally renowned traditional luxury brands proved the most resilient in the category. Chanel, Louis Vuitton and Bottega Veneta were among the brands that continued to be highly coveted by local consumers in Hong Kong in 2020.
Local consumers are set to be the key focus of luxury brands in Hong Kong in the early stages of the forecast period, as inbound arrival numbers could remain depressed as long as restrictions remain in place, while some consumers will likely remain reluctant to travel because of concerns about exposure to the COVID-19 virus. The revival of normal social and economic activity as the immediate threat from COVID-19 wanes will be a key factor in driving the recovery in luxury leather goods, as the increase in social and business occasions generates usage opportunities for products such as luxury handbags.
Luxury brands have been trying to ramp up their awareness levels among local consumers by collaborating with local celebrities, which was once a less prominent trend in Hong Kong. For example, Burberry invited three popular members of Mirror, a local boys’ group highly popular in Hong Kong, to represent its three newly-launched entry-level cross-body bags at a local store in July 2021.
The pre-owned luxury goods market has grown strongly in Hong Kong in recent years, with platforms such as Vestiaire Collective and Green Ladies seeing their expansion supported by increasing consumer interest in sustainability and demand for affordably priced luxury products among younger consumers. The segment has seen interest further bolstered by the challenging economic conditions resulting from the civil unrest and the COVID-19 pandemic, which have encouraged growing numbers of consumers to sell their luxury goods and, thereby, significantly expanded the range of second-hand products available.
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Luxury Leather Goods
This is the aggregation of luxury bags and small leather goods and luxury travel goods.See All of Our Definitions
This report originates from Passport, our Luxury Leather Goods research and analysis database.
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