“The sales volume showed a V-shaped recovery in Q2 after the underperformance in Q1. This pattern, however, is represented by a quick recovery to the normal level of consumption rather than a consumer spending surge fuelled by pent-up demand. The sales of luxury brands have been stable through the first two quarters, reflecting the resilience to risks of the wealthiest consumers. On the other hand, in offering greater discounts, mass joint ventures also realised an increase in sales. Along with shifting offline advertising to online marketing, brands have also diversified their marketing approaches and themes to resonate with consumers. To stand out in a red ocean with fierce competitions, it is important to build closer relationships with consumers, establish a caring brand image and develop trustworthiness.

– Terence Zhou, Senior Research Analyst