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While some luxury goods categories and retail channels may be less negatively affected than others, the COVID-19 pandemic is an unprecedented shock to the entire industry.
Many consumers cannot justify buying personal luxury goods such as leather goods, fashion, watches and jewellery – as many see no opportunity to use them in the foreseeable future. The impact of travel restrictions are also largely impacting the luxury space, as the Chinese are the biggest single international spenders in the world and make up over a quarter of all tourist spending on personal luxury goods.
However, there are certain luxury players that are making waves in the philanthropic space, whether its donating money or shifting manufacturing lines to produce essential medical equipment or protective and hygiene products.
Overall, the market is expected to take a massive hit, given the fact the industry relies heavily on tourism and wealthy international shoppers. As long as tourism flows are down we will likely see a long term lull in global sales.