Inside the Luxury Market with Yanmei Tang

Business School alumni Yanmei Tang is an analyst at Third Bridge, where she has been working for nearly five years. Originally from China, she studied for a Master’s in Business and Management at Nottingham in 2018.

Third Bridge operates as a research partner for clients such as institutional investors, hedge funds, private equity firms, and consulting companies. In her current role, Yanmei conducts in-depth research and analysis on specific industries and companies, helping clients understand industry trends, growth drivers, and company-specific details which informs how they invest their money.

The critical thinking and interpersonal skills she developed while studying at Nottingham – particularly through group coursework - are invaluable to her work today. “Engaging with my professors and some of my classmates when we did assignments together – from really different, dynamic backgrounds, sharing our opinions, seeing the way they engage with different people, their thinking process and their perspectives, really opened my eyes and helped me to think differently or outside of the box. And that actually is something I do on a daily basis in my work as well – I ask industry specialists questions, and they share their insights with me, but how do you contextualise that, and make it more relatable for your clients? I think the core is about engaging with different people, changing your dynamic and having a different perspective.”

Yanmei specifically covers the luxury sector, which allows her to leverage her understanding of both Western and Chinese markets. Her work involves staying updated on global market trends and dynamics, focusing on high-end brands and their performance in the sector: recent news items on downturns for the likes of Gucci and Burberry have carried her insights for Yahoo Finance and the Guardian.

The luxury market has experienced significant changes in recent years, with the recent slowdown following a 2-3 year boom period, particularly due to the COVID-19 pandemic and its aftermath.

Yanmei explains, "During COVID as you can imagine, people are constrained, can’t go out - they have a bit of money in in their pocket because they don't have anywhere to spend it. So naturally we see a boom throughout COVID. The demand surged during that time, especially a lot of aspirational customers, because if they want to reward themselves, they naturally spend their money on these luxury goods."

However, as restrictions eased and people changed the focus of their spending, the market began to normalise. As the expendable income of the pandemic has been replaced by the recent squeeze on living costs, a number of luxury brands have seen their share prices tumble in the past year. A recent study by wealth management firm Saltus showed 16% of cash rich Brits had cut down on their personal spending due to financial pressures, cutting down on luxury items and designer clothes.

A key factor in the luxury market's current state is the Chinese market – historically a big player in the global high-end goods market – returning to pre-pandemic levels. One of the last countries to remove COVID restrictions, China’s economy has been slow to bounce back, and its real estate sector – which contributes to nearly a third of the nation’s GDP - is currently in crisis.

"The whole market is really counting on China to actually have more people travelling abroad," says Yanmei. "That’s where you see a lot of Chinese clients shopping: when they go abroad, they tend to buy more things."

The industry is now looking towards the upcoming summer season with cautious optimism - Yanmei says that department store executives she has spoken to are expecting consumers from China to return to about 80% of what they were pre-COVID.

While the Chinese market recovery is slower than anticipated, there are emerging opportunities in other markets. Yanmei points out, "There are other interesting dynamics in other markets such as the Brazil market, the India market - countries with rising middle class or wealthy people, who are starting to travel again."

For Yanmei, the key for the luxury sector now is whether these emerging markets can compensate for the slower recovery of China’s economy: "The question mark is really, will their demand surge be enough to compensate what we have lost from the Chinese market?"