China seen as global innovation engine

Kering Chief Executive Officer Luca de Meo has upgraded China's strategic role in the group's long-term transformation, positioning the market not just as a core consumption hub but a pivotal driver of global innovation and operational change, as he addressed the recent 7th edition of Kering China Innovation Day in Shanghai.

"For Kering, China is not simply a market. It is a source of innovation for the entire group: from technology, to business, to client trends," de Meo said.

Under the luxury group's ReconKering mid-to-long term transformation framework, China takes on three layered strategic functions: a core consumption engine supporting top-line growth, a regional innovation hub powering Asia-Pacific operations and a testing ground for next-generation luxury models that can be scaled globally.

China's elevated status rests on its unmatched industrial and digital advantages, according to industry analysts. "China is the world's manufacturing base. So manufacturing innovation will become a huge advantage here," said Jeffrey Chang, an associate partner at consultancy McKinsey & Company. He noted that China's complete supply chain, massive user data pool and mature super-app ecosystem make it the world's fastest-growing and largest artificial intelligence deployment market.

De Meo echoed that assessment. "This is the manufacturing platform of the world," he said, citing mature industrial infrastructure, abundant data resources and a vibrant market environment as China's unique strengths. Domestic digital platforms such as Xiaohongshu also boast unrivaled penetration and sophistication, he added, and since AI fundamentally runs on data volume, markets with richer data and faster iteration naturally breed stronger technological progress.

This year's Innovation Day featured nine local AI startups across three tracks — creativity and brand communication; omnichannel retail and e-commerce; and client experience — to integrate local innovation into Kering's global business ecosystem.

So far, Kering's China Innovation Hub in Shanghai has launched more than 50 innovation pilots, spanning 3D virtual try-on, AR experiences, live commerce, generative AI content creation and other end-to-end use cases. Internal tools such as a mobile AI data dashboard have also been rolled out group-wide, drastically cutting repetitive work from manual data consolidation to presentation preparation.

Yet de Meo stressed that pilot volume alone does not equal real competitive value. "Pilots are never the destination. An innovation that stays a pilot is a curiosity. An innovation that scales is a competitive advantage."

To drive wider adoption, Kering is rolling out company-wide AI upskilling programs to lower the technology threshold, encouraging cross-functional teams to explore use cases tailored to their daily work.

On the broader debate over AI's role in luxury, de Meo struck a cautiously optimistic tone.

"A lot of people in the space of AI will sell you the idea that AI will become the destination of your mind," he said, noting that many technology providers overstate AI's capabilities to inflate their own valuation.

"At this stage, I still see it as a very powerful tool to support human beings. It's like putting a turbocharger in a traditional engine," he added. "I'm not sure you're going to do things better, but for sure you're going to do them faster, which is also important."

De Meo acknowledged widespread hesitation within the luxury sector toward AI adoption. "I don't know right now if AI usage can help us boost creativity," he said. "The luxury industry is a lot about heritage, craftsmanship and human touch."

Therefore, his solution lies in balancing both dimensions. "The best thing we could do is actually combine art and science," he said, merging creative intuition with data-driven rationality.