Middle-class consumer apprehension in China is growing, with money stuck in sinking stocks and property.
Luxury goods firms have relied on China for growth for decades; depending on Chinese consumers for a massive third of all global sales. However, the bubble is bursting as the Chinese middle class are spending less in order to cope with diminishing wealth and ever-expanding bills.
The cash drain faced by middle-class Chinese homeowners has prompted economists to warn of further slides in spending with the country facing an unsure economic future.
Italian high-end menswear maker Ermenegildo Zegna Group recently told Bloomberg that it will open less stores in China next year, after observing weaker demand over the past few months.
Analysts have explained that the purchasing power of China's middle class over the years hasn’t been on account of genuine income growth but has instead been propped up by investment gains on paper and easy credit.