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English>>China Society

Anti-corruption Affects LV Sales in China, Making it Sell Steamed Bun

By Liu Rong (People's Daily Online)    00:44, July 07, 2015

The world’s largest luxury goods company LVMH has reported disappointing sales. Due to China's anti-corruption campaign and decreased interests among its Chinese customers, the company has expanded its business to the Chinese restaurant business.

It was reported that starting in 2014, LV sales began declining after a five profitable years in the past. The decline is forcing the French luxury goods giant to switch to other businesses to diversify its investment.

Experts here say the reason behind the switch could be China’s ongoing anti-corruption campaign, which targets corrupted high-ranking officials. These officials used to receive” luxury gifts,” and wear brand names to flaunt their status. Another reason may be that the newly rich have begun developing a more unique taste, instead of following others in wearing the same brand name.

Facing this dilemma, last year LVMH’s private equity arm L Capital Asia, spent more than $100 million on purchasing a 90% stake in the Chinese restaurant chain Crystal Jade.

Crystal Jade, founded in 1991, specializes in Cantonese cuisine, including dim sum, handmade noodles and baked goods. The firm is based in Singapore and has over a hundred outlets across Asia, including China, Hong Kong and a number of Southeast Asian countries. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor:Luxiao Zou,任建民)

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