Companies Flee Shanghai Amid 'Corona Lockdown'... "Luxury Brands Provide Special VIP Care"

Apple, Onsemi, Coca-Cola and Others Scale Down Operations
Luxury Brands Launch Online Courses for VIPs

Residents line up to undergo nucleic acid testing in Shanghai, China, where city lockdowns continue to prevent the spread of COVID-19.
Photo by Yonhap News

[Asia Economy Reporter Na Ye-eun] As the lockdown in Shanghai, China, due to the spread of COVID-19 continues for an extended period, causing disruptions in global product manufacturing, some luxury brands are reportedly providing special management for their VIP customers.

According to market research firm Omdia on the 12th, as the Shanghai city lockdown continues, companies with factories located locally were found to have failed to produce more than half of their products last month. Shanghai has been under lockdown since March 28.

In fact, Quanta, a Chinese manufacturer with a factory in Shanghai, experienced disruptions in producing 900,000 to 1,000,000 Apple laptops and monitors last month. The Quanta Shanghai factory exclusively produces Apple products, with a monthly production capacity of 1.5 million units.

Accordingly, major companies that had made Shanghai a global business hub are beginning to leave one by one. Recently, Apple, Onsemi, Coca-Cola, and GE have started reducing their China operations as product manufacturing and logistics were disrupted by the Shanghai lockdown.

Additionally, Samsung Electronics has relocated its mobile phone production lines from China to Southeast Asia and other regions, and Hyundai Motor Group is pushing forward with the sale of the Beijing Plant 1 site in China, which has been inactive since April 2019.

Prada store in Shanghai, China. The photo is not related to any specific part of the article. Photo by Yonhap News.

On the other hand, some luxury stores have started managing VIP customers in unique ways. According to major foreign media, luxury brands in Shanghai are specially managing wealthy local customers, and banks and high-end hotels are partnering with luxury brands to provide special services such as delivering food to the affluent.

Jang (24), a Shanghai resident, said that both she and her mother are VIP customers of luxury brands, stating, "During the lockdown, my mother received about 10 birthday cakes and flowers from different brands as gifts. Once the lockdown is lifted, purchases will definitely be made." She added, "Even if the items provided were not expensive, I was touched and surprised that luxury brands kept contacting us."

Luxury brands have also opened online courses for VIP customers staying at home. 'La Mer' offers facial massage lessons, 'Dior' provides premium yoga classes, and 'Prada' runs cultural courses about books, movies, and music recommended by writers and musicians.

In response, a user on the Chinese SNS Weibo wrote, "During the epidemic, class distinctions have become even clearer," adding, "Ordinary citizens have to rush out to get rice, but luxury brands try to give first-class gifts to VIP customers."

Thomas Piachaud of Shanghai consulting firm Rehub explained, "12% of China's luxury stores are located in Shanghai," and "Due to store closures from the lockdown, these brands need to personally attend to VIP customers online."

Lily Lu of marketing company Gestor Lux also said, "Luxury brands do not just sell products but also emotional connections," adding, "Even if customers cannot purchase items immediately during difficult times, the relationship between the brand and customers must be maintained and nurtured."

Meanwhile, foreign media reported that VIP status is granted when annual purchases exceed about $15,000 (approximately 19 million KRW), with minimum purchase criteria varying by brand.

This content was produced with the assistance of AI translation services.