Bulgari CEO Expects Chinese Consumers to Drive Luxury Growth as Economy Recovers, Eyes New Store Openings

Italian luxury brand Bulgari, part of the LVMH group, is gearing up to expand its store network across mainland China, banking on strong online sales to propel growth as the Chinese economy stabilizes.

“We have already a very strong position in China, but we believe that we have an opportunity to take the brand to a much bigger level,” said Bulgari CEO Jean-Christophe Babin at the China International Import Expo (CIIE) in Shanghai.

While Bulgari, known for its high-end watches, fragrances, jewelry, and leather accessories, has seen a deceleration in growth this year, Babin expressed optimism about a rebound within the next 24 months as economic conditions improve in China. "The online business is resisting much better because it’s covering a much broader base of clients, and it’s growing,” he noted. Bulgari’s digital presence is robust, with its products available on multiple Chinese platforms, including a luxury 'pavilion' on Alibaba's Tmall. Alibaba, incidentally, also owns the South China Morning Post.

Founded in Rome and celebrating its 140th anniversary this year, Bulgari has come a long way since it entered the Chinese market with a 12-square-meter store in 2004. The company now operates over 100 stores across mainland China, spanning a total area of 40,000 square meters and employing around 1,500 people.

Bulgari’s expansion in China underscores its commitment to the region, which remains a critical market for the brand despite some changes in consumer behavior post-pandemic. Following COVID-19, “revenge buying” by Chinese shoppers fueled record luxury sales in 2023. However, China’s middle class has since shifted towards a more cautious spending approach, driven by economic uncertainties, a property-market downturn, and stock-market losses.

This shift has impacted luxury brands, with LVMH reporting a 16% decline in sales across Asia (excluding Japan) in the three months ending September 30, following a similar 14% drop in the previous quarter. Additionally, declining marriage rates in China could spell challenges for jewelry sales, although Babin remains unfazed. “Since the Roman empire mankind has bought jewellery as a token of marital union,” he remarked. “Even if today fewer people are choosing to get married, there are still growing demographics gifting jewellery to their partners.”

Despite economic pressures, Chinese consumers retain an interest in luxury goods, particularly in gold. Babin observed that, while luxury sales overall have slowed, Chinese buyers still view gold items as valuable investments.

The digital luxury market in China has also evolved, according to Babin. Just a few years ago, consumers were hesitant to buy high-end items online. “But the market has grown accustomed to it and now trusts that logistics are safe and secure, and also enjoys the convenience of purchasing online,” he said.

Although Chinese consumers are increasingly purchasing luxury goods abroad, especially in Japan where currency conditions are favorable, China remains essential to Bulgari’s strategy. A recent McKinsey study indicated that savvy Chinese shoppers are indeed taking advantage of favorable exchange rates outside China. Nonetheless, Babin is confident in the resilience of the Chinese market and economy. “The West has gone through economic crisis after crisis,” he pointed out. “But we are used to crisis, and we tend to try to focus on fundamentals and to turn the problem into an opportunity.”

Babin believes China’s economy will also weather the current downturn. “There is a slowdown. But we have totally committed to grow in China further,” he affirmed, underscoring Bulgari's long-term vision for the Chinese market. 

By fLEXI tEAM