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Opinion | How China’s home-grown luxury labels took on Western brands
Chinese brands are gaining ground at home and worldwide as domestic consumers increasingly turn to labels with Chinese imagery and values
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China’s consumers are increasingly favouring domestic brands over Western imports, reshaping a global luxury market that was valued at US$327.5 billion in 2024. Their preference for domestic labels is upsetting the old hierarchy of Europe’s luxury houses, historically regarded as the pinnacle of taste, craftsmanship and prestige.
This shift is taking place amid a decline in the Chinese luxury market, which was down more than 18 per cent in 2024 to around 350 billion yuan (US$50 billion). The fall in China’s luxury sales in 2024 was the steepest since at least 2011 and sales have been flat in 2025, according to consultancy Bain. JPMorgan expects sales in 2026 to be “broadly flattish”, as well.
China was on track to become the world’s largest luxury market during the Covid-19 pandemic, but its explosive growth since 2019 has decelerated. Shoppers around the world have become more discerning; this is particularly true in China. The likes of Balenciaga, Chanel, Louis Vuitton and Prada have all closed stores in China since the second half of 2024 while Gucci was expected to close 10 boutiques in 2025, according to Zino Helmlinger, head of China retail at real estate service provider CBRE.
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Forces such as a slowing economy, trade tensions, a struggling property sector and price fatigue partly explain the retrenchment. However, there is also a deeper change in values and aesthetics of the Chinese middle class as caution begins to prevail over exuberance. These shoppers are questioning high prices given the perceived decline in quality and service.
Meanwhile, the stigma against “Made in China” is fading as Chinese brands meld modern styles with a centuries-old civilisation. There is a surging demand for “experiential goods”, notably travel, dining and other leisure activities that contribute to personal enrichment and well-being.
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Chinese brands are gaining ground worldwide. Pechoin ranks among the top 15 most valuable cosmetics brands globally, according to brand valuation consultancy Brand Finance. Research firm Euromonitor International notes that Southeast Asia is the largest and second-fastest-growing export destination for Chinese goods.
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