China’s “Moonlight Clans” propel Gucci (and everyone else) to ever-greater heights
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China’s “Moonlight Clans” propel Gucci (and everyone else) to ever-greater heights

Iconic luxury brand player Gucci – the jewel in Kering’s crown – is on the rise. A recent report by Kantar Millward Brown states that Gucci’s brand value has skyrocketed over the past year by an incredible 66%, to $22.4 billion. Partly, this is down to a sector wide recovery (the top 10 luxury labels rose in value by 28% over the past 12 months) – but even against this positive backdrop, Gucci is a massive outperformer. What’s Gucci’s secret? According to the researchers, bands of Chinese millennials known as “Moonlight Clans”.

Kering’s share price has risen by 33% so far this year

graph 3105 kering

SOURCE: Yahoo Finance

China has long been seen as a growth engine for the luxury sector, and its story has just taken another turn with the rise of Moonlight Clans. These groups of millennial shoppers that are dedicated to spending “everything they earn on luxury goods,” according to Elspeth Cheung, global valuation director at Kantar’s Brandz division. These are the consumers for whom nothing will get in the way of the latest $2,900 velvet clutches, or $1,400 crystal-studded sunglasses.

The political and economic message in China is one of positivity. President Xi Jingping has been eager to promulgate his vision of a new China, rife with abundance and opportunity. Millennial consumers, unshackled to experiences of a past that is both a world away and just a few decades removed from the present, are the ones who really “get it”. Cheung says: “the China Dream message was one of a stronger nation, with more equality, increasing income levels. It gave assurance to consumers that the future is bright.”

Gucci is a shining star of the Chinese luxury market, but it is far from the only beneficiary. The report says that Dior experienced the second greatest growth in value (54%), while Burberry and Cartier also experienced “substantial growth” and another of Kering’s brands (Saint Laurent) hit the top 10 for the first time in its history. Louis Vuitton, worth $41.1 billion, remains the world’s most valuable brand.

While Gucci is seeing more of this growth than others, its parent company Kering is still reaping the rewards of “renewed consumer confidence and supportive government policies” across the board. Last year, China was its second-fastest growing market, with all brands up 18% from the previous year at comparable exchange rates. Asia Pacific as a whole now makes up a third of Gucci’s sales – a figure that would have been unthinkable just a few short years ago.

Partly, that’s down to the Chinese market returning to growth. But it’s also down to a revival at the brand that started in 2015, when it embraced modern, and unexpected, fashion trends and went “all in” on Ecommerce. Cheung remarked: “The trust level in the brand has risen significantly, along with the brand value. With the rise of social media—with WeChat and Instagram being so important for fashion—if you want to stand out, you need to wear something that’s different.”


Dominion holds all the companies mentioned in this article in its Global Trends Luxury Fund.

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