Before the opening of the Paris Olympics, everyone thought that LV would use this opportunity to make a beautiful comeback.

However, it turned out that they seemed to have miscalculated.

Not long ago, the LVMH Group released its financial report for the first half of 2024, and the situation is not very optimistic. The revenue in the first half of the year decreased by 1% year-on-year, operating profit decreased by 8%, and net profit decreased by 14% year-on-year.

The luxury brands under the LVMH Group, such as Dior, Tiffany, and Louis Vuitton, all experienced a decline in revenue to varying degrees. Although the decline is not significant, for a group with a market value of 2.9 trillion, this is already a quite serious "loss."

But in fact, this is not a dilemma unique to LV. Entering 2024, the luxury goods industry can be described as a "desolate scene."

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The Hang Lung Group in Hong Kong is engaged in the business of high-end luxury goods clusters, and its shopping malls almost gather all the well-known luxury brands in the world.

Not long ago, Hang Lung also announced its revenue for the first half of 2024, and a 56% decline in net profit surprised many industry insiders.

In response, they stated that the decline in profits was mainly due to the sluggish consumption of luxury goods in first-tier cities.

Therefore, in corners unknown to many, the luxury industry has long been in chaos. So, in this chaos, is the "Olympics" really a good ship?The Paris Olympics saw LV invest nearly 120 million yuan.

It's worth noting that the total number of sponsors for the 2024 French Paris Olympics is 79, with a total sponsorship of about 1.3 billion USD, and LV alone accounts for 12% of the share.

To ensure their investment doesn't go to waste, LV has pulled out all the stops, making sure their brand logo is visible to all.

From the moment the torch relay began, LV started to exert its influence subtly.

For instance, the entire torch relay is fully sponsored by LV's Sephora brand.

Moreover, the Olympic torch relay route includes stops at LV's Château Cheval Blanc and the Fondation Louis Vuitton Museum of Art.

In addition, LV Group, a leader in the fashion industry, has created exclusive spaces for every container needed at the Olympics and strives to ensure they all make an appearance.

The attire worn by the 515 volunteers awarding prizes at this year's Olympic Games, as well as the trays they hold the medals on, are all custom-made and sponsored by Louis Vuitton.

The uniforms for French athletes are also crafted by LV's luxury brand Berluti.

Furthermore, LV has filled various venues at the Olympics with millions of bottles of Moët & Chandon champagne and Hennessy cognac.So, sometimes, experiencing the treatment of a tycoon doesn't require achieving fame and success; it can be as simple as becoming an excellent Olympic volunteer.

Of course, these are all visible on the surface, and products that are not good to openly promote but have high costs can only take a detour.

At the opening ceremony, LV advertisements were ubiquitous, not only subtly inserting hard advertisements but also openly having an excessively long promotional video.

The Olympics are broadcast worldwide, and at that time, commentators from various countries are the best "external propaganda personnel."

It can be seen that LV is aiming for the idea of "letting the whole world help me advertise."

However, the opening ceremony has been over for a week, and most Chinese people, when recalling that hard advertisement, only remember the part where the CCTV commentator said in a clear and sonorous voice:

"Following the steps of the mysterious person, we arrived at a factory workshop by the Seine River, where the workers have just finished making a box for the medals..."

Great, the protagonist of the globally famous IP "Assassin's Creed" is the "mysterious person," LV workshop dramatically transforms the "factory workshop," the highly valued leather craftsmen become "workers," and the million-dollar LV classic monogrammed medal box turns out to be a "box for medals."

In response, Chinese netizens have been buzzing: "Never felt LV so down-to-earth before..."

However, this may have inadvertently hit the target of LV's sponsorship.After all, Arnault, the head of LV, once bluntly stated:

"The sponsorship will not have a significant impact on the group's profits, but sponsoring the Olympics undoubtedly increases brand exposure, which helps enhance the brand image and thus has a positive impact on sales."

"Growth at all costs is definitely not our goal."

"We have reached a stage where we no longer need such high growth."

"I would rather the brand grow more slowly but steadily, rather than 'pulling up the seedlings to help them grow'."

During a telephone conference in 2023, LV's CEO, Arnault, responded to the issue of the global luxury goods industry's slowing growth rate with the above answers.

Of course, what he said was far more than just these few sentences.

During the meeting, Arnault also cited LV Group's market share in recent years, average growth rate, and ongoing overseas expansion projects, trying to prove that LV's development is still under the control of the group.

However, in the eyes of most people, this conversation mainly highlighted two words - "defiant".

As the world's largest luxury goods group, claiming that it no longer needs high growth, what's the difference between that and the richest person saying they don't like money?At the beginning of 2023, with the dissipation of the pandemic, the luxury goods industry enjoyed a period of prosperity, but after the glory, there was an unexpected rapid decline.

Bernard Arnault, the chairman of LVMH Group, is a regular on the Forbes list, and with his considerable skills and substantial assets, he occasionally takes the position of "world's richest man."

However, in recent years, with the instability of LVMH Group's development, Arnault's position as the richest man has been quite shaky, even forming a pattern of frequent alternation with Musk.

According to relevant indices, from March to July of this year, Arnault's assets fell from $231 billion to $185 billion.

That is to say, in just four months, his wealth shrank by a staggering 330 billion yuan.

But facing a crisis that came like a storm, this does not seem to be an urgent problem that needs to be solved.

As a luxury brand group, LV's greatest advantage is its brand value, and the decline in revenue is also due to brand value. The key to whether LV can break through obstacles is also brand value.

What is "brand value"?

For example: Nowadays, there is a saying in the luxury goods industry.

Most consumers of luxury goods are not ordinary people with average purchasing power, but they need ordinary people to know about luxury goods and understand luxury goods.Only when more people have a concept of it and understand its connotations can luxury goods become "luxury goods," and those who purchase them can derive emotional value that exceeds the inherent value of the products themselves. This, in turn, can be said to be the "brand value" that has made the luxury goods industry invincible in the past. However, this strategy may not be as effective now as it once was.

The financial report for the first half of the year released by LV on July 25th reveals many issues. Looking at the brand types, recently, the revenue of LV's leather goods, jewelry, and watch brands has been declining. The worst-performing sector is the wine and spirits department, with a revenue decrease of 12% to 2.807 billion euros. In contrast, however, the revenue from clothing, perfume, and beauty retail has seen varying degrees of increase. It is evident that compared to the past pursuit of elusive high-end and elegance, today's consumers are more focused on practicality and cost-effectiveness.

In terms of regional analysis, Asia remains the largest and most concerning market for LV, especially China. The report indicates that in the first half of 2024, the organic growth of the American market was 2%, and the European market grew by 3%. However, the Asian market is quite intriguing; the Japanese market saw a revenue surge of 44%, but excluding Japan, the overall Asian market plummeted by 10%. The reason for this situation is that Chinese consumers have been purchasing luxury goods in Japan.At present, the Japanese yen has reached its lowest value against the euro in 34 years, leading many Chinese consumers to choose to spend in Japan. This has resulted in a stalemate for the domestic luxury goods industry in China, but the purchasing power of Chinese consumers overseas remains very strong.

In the conference call following the release of the financial report, the Chief Financial Officer of LV mentioned "Chinese market" and "Chinese consumers" 76 times in discussions with analysts, indicating their significant focus on the world's largest consumer market.

It is a well-known fact in the global luxury goods industry that one-third of the world's luxury goods are consumed by Chinese people every year, yet this is a hot knowledge globally and a cold knowledge in China.

Therefore, if LV wants to increase its revenue, the Chinese market is an area that must be given absolute priority.

In mid-2023, news of the LV President leading his children and several executives on a store tour spread worldwide, with the topic's reading volume on Chinese networks easily surpassing 100 million, causing a huge response.

Of course, while outsiders watch the excitement, insiders look for the essence. Compared to netizens who may stray from the topic online, many professionals can immediately discern LV's intentions.

The year 2023 was supposed to be a year of comprehensive recovery for the luxury goods industry, but as the main market, China has rarely seen a slow growth in revenue.

The President of LV traveled a great distance to visit stores, firstly to demonstrate the importance of China, and secondly to find a way to restore the growth rate of this largest market through the store tour.

From the current situation, it is unknown whether he has seemingly found a solution, but LV has been very active worldwide recently.

For example, LV has been frequently acquiring, investing, and opening stores. Bicester Village was recently acquired by a secondary subsidiary of LV, and its investment private equity company has also been very active in China recently, having made three investments in a short period, all focused on the beauty market.Additionally, in the financial report for 2023, the LV Group also stated that due to the overseas markets still not recovering, the main purchasing power continues to come from China, hence the hope to increase revenue by opening more stores in China.

From the current perspective, the goals listed by LV are not "empty promises."

However, as netizens have said: "Carrying a bag worth twenty thousand does not affect my identity as a commoner," looking at the situation from an outsider's point of view, one can only say "it's hard to judge, wish them success."