Richemont and Remgro chairman Johann Rupert is bullish on China because the citizens are smart, study science and technology, and are not obsessed about political correctness.
Rupert made these comments during a Richemont investor webcast about the company’s latest results.
Despite significant economic headwinds putting pressure on consumer spending in the luxury sector, Richemont still produced good results.
Sales increased by 6% at actual exchange rates and 12% at constant exchange rates, fuelled by almost all regions and distribution channels.
Growth was led by Asia Pacific, with sales up 14% at actual exchange rates and 23% at constant exchange rates.
Jewellery Maisons performed exceptionally well, with sales up 10% at actual exchange rates and 16% at constant exchange rates.
Rupert explained that Richemont grew by gaining market share from competitors despite new entrants and increased competition.
“The demand for luxury goods remains there. The affinity for our products remains strong,” Rupert said.
He remained bullish on the Chinese market despite previously cautioning that spending may slow in the short term.
He said people don’t splurge on luxury goods if they act rationally during tougher economic times. This was the case in China.
However, Rupert is confident that “the feel-good factor will come back” and that luxury goods sales will increase.
He is particularly bullish on Chinese consumers because of their outlook on life and their work ethic.
“The Chinese are smart people who study science, technology, engineering, and mathematics,” Rupert said.
This contrasts with many students in developed nations, like the United States, who are obsessed with political correctness and prefer criticising classic literature.
“The Chinese work hard, are smart, and study future technologies. I fully expect them to continue to do better,” he said.
“I am very confident that Chinese consumers will continue to display their affinity for our products.”
“We see in it triple-digit growth when they travel to Hong Kong, Macau, and other luxurious destinations.”