LVMH Moet Hennessy Louis Vuitton, the world's largest purveyors of luxury goods, has shifted its resources from the shopping paradise of Hong Kong to mainland China.
LVMH is moving its regional headquarters to Shanghai from Hong Kong, according to sources. It has also moved some of its top executives to mainland China.
As Hong Kong's retail market slumps, the top luxury conglomerate is focusing on Shanghai, Chengdu and Shenzhen.
Hong Kong has made a number of mistakes over the past few years. In 2019, anti-government demonstrations kept away visitors, and China's Covid Zero policies restricted cross-border activities. This led to the closure of several retail stores in the metro area.
The pivot of LVMH, a company that owns luxury brands such as Tiffany & Co. Christian Dior Fendi and Louis Vuitton is due to a surge of sales in the first quarter as Chinese consumers on mainland China splurged as the pace the second largest economy picked up.
LVMH predicts that in the post-Covid era most Chinese luxury purchases will take place on mainland China, rather than Hong Kong. These shoppers are flooding shopping centers in duty-free areas like Hainan, and Macau's gambling districts. Hong Kong is losing its position as the top luxury shopping hub.
LVMH follows the money.