Imagine Bernard Arnault, the titan behind LVMH and one of the wealthiest individuals globally, casually browsing local boutiques in Shanghai. It happened! Forget the usual fanfare of inspecting Louis Vuitton and Dior stores; Arnault was spotted checking out Chinese brands. This seemingly small act speaks volumes about a seismic shift occurring in China's luxury market. What's driving this dramatic change?
During a September visit, instead of just visiting his own brand stores, Arnault made stops at Qiantan Taikoo Li, a cutting-edge luxury mall in Shanghai. Sources say he purchased two handbags at Songmont, a brand known for its minimalist leather goods. He also spent a significant amount of time at Laopu Gold, a domestic jeweler located near Cartier and Van Cleef & Arpels, reportedly admiring their craftsmanship. This was no ordinary shopping trip; it signaled a potential paradigm shift in the Chinese luxury landscape.
China's US$49 billion luxury market is undergoing a metamorphosis. The economic slowdown has dampened the appetite for foreign premium brands. Chinese consumers, when they do splurge, are increasingly favoring homegrown labels. This shift is reshaping the luxury market, compelling global players to re-evaluate their strategies. And this is the part most people miss: it's not just about price; it's about cultural resonance.
Online retail platforms have been instrumental in the rise of these local brands. Data from BigOne Lab, analyzed by Bloomberg News, reveals that five domestic prestige brands spanning handbags, apparel, fragrances, cosmetics, and jewelry have surpassed seven foreign competitors in sales growth over the past two years. For instance, Laopu Gold's e-commerce sales skyrocketed by over 1,000% in the first three quarters of 2025 compared to two years prior. Songmont's online bag sales also experienced substantial growth, increasing by roughly 90%.
Contrast this with the performance of some international giants. Gucci's online bag sales in China have plummeted by more than 50%, while Michael Kors has seen a decline of around 40%. Other Chinese brands, such as makeup brand Mao Geping Cosmetics, perfumier To Summer, and luxury clothing label Icicle, have achieved similar success in their respective categories. On Tmall, a major online retailer in China, revenues for some Chinese brands either rival or exceed those of their overseas counterparts. For example, Laopu Gold's Tmall store generated US$630 million in revenue over 12 months (ending October), surpassing Van Cleef & Arpels' US$57 million. Mao Geping's revenue reached US$125 million, more than doubling Bobbi Brown's sales. Laopu Gold experienced a 250% jump in sales for both online and in-store channels during the first half of 2025, following double-digit growth in both 2023 and 2024.
Bain & Co. estimates that China's luxury market, primarily dominated by European powerhouses like LVMH, Kering, and Burberry, experienced a contraction of up to 20% in 2024 – its most significant decline since at least 2011. While there have been signs of recovery, industry executives express caution and uncertainty. China's economic challenges have diminished the demand for global luxury brands. The anticipated resurgence in demand following the relaxation of strict COVID-19 restrictions has not materialized for overseas firms, leading to a decline in the stock prices of major luxury houses. LVMH shares are down about 30% from their 2023 peak, while Kering has plunged roughly 60% since its high in 2021. In the US, Estee Lauder Companies shares are approximately 76% below their 2021 high. Consumer spending in China, after an initial spike following the easing of lockdowns in 2021, has largely stagnated. Representatives from LVMH, Kering, Channel, Richemont, Estee Lauder, Max Mara, and Capri did not respond to requests for comment.
Lower prices are a definite draw. Icicle's cashmere and wool Aircoat ranges from approximately US$1,123 to US$2,808, while Max Mara's comparable 101801 coat costs over US$4,200. Similarly, Songmont's bucket bags, often compared to Hermes' Picotin Lock bags, retail for around US$421, while the Hermes version costs between US$5,054 and US$8,016. But here's where it gets controversial... price isn't everything.
This trend isn't confined to China. Globally, shoppers are becoming more discerning, gravitating toward labels that offer a premium aesthetic at more accessible price points. They're growing increasingly wary of spending on established brands that consistently raise prices. But what is more surprising is that the price tag alone is not the deciding factor, said Mr Jacques Roizen, managing director of China consulting at Digital Luxury Group.
“Contrary to common perception, Chinese beauty brands aren’t competing on price – they’re building rich brand universes and prioritising storytelling,”said Mr Roizen. “For Western prestige beauty brands, the rise of local competitors should serve as both a wake-up call and a warning.”
The narrative of these Chinese brands is deeply rooted in craftsmanship and cultural pride, resonating strongly with younger Chinese shoppers who no longer view Western logos as symbols of sophistication. Modern shoppers are seeking items that feel more personalized, and many Chinese brands have made this shift a cornerstone of their brand identity. Labels like To Summer and Songmont draw inspiration from local history, art, and everyday life, conveying the message that modern luxury can be proudly Chinese. Songmont's philosophy emphasizes "Eastern aesthetics," with store designs reflecting Chinese calligraphy. To Summer creates scents using traditional ingredients like tea, osmanthus, and preserved orange peel, and utilizes porcelain made in Jingdezhen, China's renowned ceramics production center. Icicle draws on the Confucian ideals of harmony and restraint. It is a concept that Songmont’s founder Fu Song consciously designed from the start.
“We’ve positioned ourselves as a Chinese brand rooted in local culture,” she said. “In the global fashion conversation, there are still too few Chinese voices.”
This strategy is particularly effective online, where marketing efforts are tailored to local consumers. Songmont launched its own podcast focusing on the lives of urban women, celebrating self-worth and diverse life values rather than social status, which resonates deeply with its audience, said BigOne partner Amber Zhang. This campaign has proven more impactful than those launched by global brands. For shoppers like Ms. Wan Yihuan, a 30-year-old finance professional in Shanghai, this message strikes a chord. Once an avid consumer of Hermes and Tom Ford products, she now carries a US$210 Songmont hobo bag and uses Mao Geping makeup. “I fell into the trap of consumerism when I was younger,” she said. “Now I just want things I truly like.”
Among the emerging Chinese players, Laopu Gold stands out for its over 100% revenue growth in physical stores since early 2024, while Tiffany and Bulgari have experienced double-digit declines, according to BigOne data. At Beijing's exclusive SKP mall, Laopu Gold's sales surged by over 200% in the first half of the year. In October, it opened a store in Plaza 66, a luxury destination long dominated by European brands, becoming the first domestic brand to establish a presence in all ten of China's top-tier malls. It may seem counterintuitive to associate "Made-in-China" with luxury, particularly given the country's history as a low-cost manufacturing hub. However, these domestic premium brands are challenging this perception by employing slower, more premium manufacturing processes and communicating these values through localized marketing campaigns.
In 2013, Icicle acquired a garment factory in China's eastern Jiangsu province that manufactures for Max Mara. Songmont uses full-grain top-layer cowhide and gold-plated hardware, crafted by artisans with decades of traditional sewing and craftsmanship experience from the founder's hometown. Laopu Gold incorporates intricate filigreed shapes and enamel glazes into its jewelry. Mao Geping, China's counterpart to America's Bobbi Brown, provides makeup application tutorials to millions of fans online using local models. Their popularity is extending beyond China's borders. In London, 16-year-old Naomi Jiang now looks beyond marquee labels when buying handbags. Finding designer brands like Hermes overpriced, she chose Songmont for its design and value instead. “We’re getting a more diverse, higher quality selection of clothing,” she said.
Executives at Chinese brands, including Songmont, To Summer, and Mao Geping, have expressed their intentions to expand globally. While they have not yet disclosed their overseas sales figures, analysts believe that the amount is likely still small. "Chinese brands must look beyond China,”To Summer’s founder and chief executive officer Elvis Liu said. “Why are global brands often better positioned in their competition against Chinese brands? Because they are backed by the global market. If you only have the Chinese market, it’s like you are a local brand, and this will put you at a very disadvantageous position amid the competition.”
Still, challenges remain. Few domestic brands have surpassed the 10-billion-yuan (S$1.83 billion) annual revenue mark, said Ms. Michelle Cheng, retail analyst at Goldman Sachs Group. “China’s market is huge, so you can hit 1 billion yuan with hot products, or even 3 to 5 billion,” she said. “But further growth depends on having a strong management team, talented staff, and long-term vision.” The high sales growth figures also stem from a low base: the top 10 best selling brands in China’s personal luxury segment are all Western brands, accounting for 63 per cent, or about US$31 billion, in sales in 2024, according to Euromonitor International data. In contrast, no Chinese brands have more than 0.5 per cent of the market share, the data showed.
The bigger risk may be psychological, with the same economic malaise that led to European brands’sales waning potentially spreading to domestic brands too, said Ms. Cheng. “For luxury to truly grow, you need rising wages and a growing middle class, both of which are being challenged by ongoing economic headwinds,” she said. Take Ms. Guo Wenjun, who once spent over US$70,000 in a shopping spree – Rolex, Chanel, even a toddler-sized Armani jacket. Now, the 37-year-old has a child in an expensive international school and feels job uncertainties are mounting. She has turned to buying US$7 tote bags and US$4 T-shirts from budget shopping site 1688.com. “Luxury used to make me feel like a queen,” she said. “Now it no longer has that magic.”
So, what do you think? Is this a temporary blip, or a fundamental shift in the luxury landscape? Will Chinese brands truly challenge the dominance of European giants on a global scale? And, perhaps more importantly, are Western brands adapting quickly enough to this evolving market? Share your thoughts in the comments below!
