Honors College Theses

Publication Date

4-2-2021

Major

Marketing (BBA)

Document Type and Release Option

Thesis (open access)

Faculty Mentor

Professor Hope Simpara

Abstract

The Coronavirus outbreak that occurred in 2020 negatively impacted the world globally. China handled the pandemic better than other countries due to their experience with prior virus outbreaks, SARS and MERS. It is important to research how the Coronavirus outbreak affected and is still affecting China’s economy, as it is a leading role in other countries’ economies as well. Before Covid-19, Chinese consumers made up one-third of global spending on luxury goods. Global luxury spending decreased drastically as many were impacted financially, emotionally, and physically. However, China’s success during the pandemic has been predicted to be the largest luxury retail market by 2025. Since traveling measures were restricted during the pandemic, Chinese consumers spent heavily in their luxury retail market instead of other countries which boosted their luxury sales. China has put several measures in place to stay on the top to continue growing and taking over the luxury retail market. They used the pandemic effects to their advantage over other countries from previous experience and having to adapt to drastic circumstances.

Thesis Summary

The main point of this study was to research the effects of COVID-19 on China’s luxury retail market. The Coronavirus tragically affected the world globally, financially, environmentally, emotionally, mentally, and physically in January 2020. The world is still experiencing hardships a year later but is on the road to recovery with distributions of vaccines and restrictions slowly lifting. However, China has demonstrated that they were already prepared for the outbreak due to having experienced SARS and MERS in previous years. They used this to their advantage and experienced growth and success despite unfortunate times globally. As a result of COVID-19, China reported a 35% decline in its luxury market prior to the year before, 2019. Due to restrictions on travel, consumers across the world weren’t able to make purchases in China. Although, this led to Chinese consumers pouring back into their countries by spending money on luxury goods in China with the money they usually spent on trips out of the country. If Chinese consumers continue funding their markets, China is expected to have the world’s largest luxury retail market by 2025. However, this may change as vaccines are being distributed and travel restrictions are being lifted. In about 2 years I will be able to gather more information and analyze the effects of China’s luxury market when the world “opens back up” and is adapted to the “new normal”. If a similar occurrence takes place, China has proven itself to adapt to a global pandemic and still succeed. The rest of the world will have to analyze what has occurred recently to better prepare for the next outbreak if circumstances arise. The luxury market will also know how to predict what they need to do to adjust to the changing buying behavior of consumers.

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