The luxury goods industry has been rattled by slowing spending growth among Chinese consumers for nearly a year.

This concern has become especially acute after Gucci, one of the largest fashion brands, warned of a sharp decline in sales in China. The French company Kering SA, which owns Gucci, lost a huge amount – $9 billion – in market value after this warning.

Similar trends are also visible in other segments of the luxury market. For example, Swiss watch exports to China, one of the most important markets for high-end watches, fell sharply last month. Analysts also predict a further decline in demand for luxury goods in China this year, Bloomberg reports.

This alarming news suggests that the expected surge in spending by Chinese consumers following the lifting of COVID lockdown measures has not materialized. As a result, some companies, especially those that are heavily dependent on the Chinese market, will be forced to reconsider their strategies for doing business in China.