Why Chinese Shoppers are Choosing Local Luxury Over LVMH and Gucci
BEIJING – When Mr. Bernard Arnault, one of the world's richest men and chairman of LVMH, visited Shanghai in September, many expected his itinerary to be routine: visiting Louis Vuitton, Dior, and other boutiques in China's prestigious malls. However, Mr. Arnault surprised everyone by choosing to shop for Chinese brands.
At the Qiantan Taikoo Li luxury mall in Shanghai, he visited Songmont, a minimalist leather goods brand, and purchased two handbags. He also spent time at Laopu Gold, a local jeweler, admiring their products for half an hour. These actions symbolize a significant shift in China's luxury market.
As the economy slows, Chinese consumers are spending less on foreign premium brands. Instead, they are favoring local labels. This trend is reshaping one of the world's top luxury markets and forcing global players to take notice.
Online retail platforms have played a crucial role in the growth of these domestic brands. According to data from BigOne Lab and Bloomberg News, five local prestige brands in handbags, apparel, fragrance, cosmetics, and jewelry have outperformed seven foreign rivals in sales growth over the past two years.
E-commerce sales at Laopu Gold have skyrocketed by over 1,000% in the first three quarters of 2025 compared to two years ago, while Songmont's online bag sales have increased by about 90%. In contrast, Gucci's online bag sales in China have plummeted by more than 50%, and Michael Kors' have dropped by approximately 40%. Other Chinese brands, such as Mao Geping Cosmetics, To Summer, and Icicle, have achieved similar success in their respective categories.
On Tmall, China's largest online retailer, some Chinese brands are generating revenues comparable to or even surpassing those of overseas brands. Laopu sold $630 million in its Tmall store over 12 months through October, compared to $57 million for Van Cleef & Arpels, according to industry consultant Hangzhou Zhiyi Tech. Mao Geping's revenue was $125 million, more than doubling Bobbi Brown's sales.
For Laopu Gold, sales for both online and in-store jumped by 250% in the first half of 2025, after doubling in both 2023 and 2024, according to its financial results. Mao Geping Cosmetics, a local beauty brand named after its celebrity founder, reported double-digit revenue growth in 2025 and 2024.
Meanwhile, Bain & Co. estimates that China's luxury market, dominated by European giants like LVMH Moet Hennessy Louis Vuitton, Kering SA, and Burberry Group Plc, shrank by up to 20% in 2024, its steepest decline since at least 2011. Despite some signs of recovery, executives speak of caution and uncertainty.
China's worsening economy has diminished the appeal of global luxury brands. Demand, which was expected to return after the lifting of strict COVID-19 restrictions, has instead declined for overseas firms. This disappointment has led to a decline in shares for key luxury houses, with LVMH down about 30% from its 2023 peak, and Kering plunging roughly 60% since its high in 2021 in Paris.
In the US, Estee Lauder Companies' shares are about 76% off their 2021 high. After spiking following the easing of COVID-19 lockdowns, consumer spending in China has largely plateaued.
This shift is causing shoppers to turn to domestic brands, which offer lower prices. Icicle's Aircoat, made from cashmere and wool, is priced between $1,123 and $2,808. Max Mara's 101801 coat, often compared to Icicle's by Chinese consumers, costs more than $4,200. Songmont's bucket bags, likened to Hermes' Picotin Lock bags by social media users, sell for around $421, while Hermes' bags cost between $5,054 and $8,016.
This trend is not limited to China. Shoppers worldwide are becoming more discerning, favoring brands that offer premium quality at lower price points as they grow weary of spending on high-end brands that continually raise prices.
However, what's more surprising is that price alone is not the deciding factor, according to 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 rebuilding rich brand universes and prioritizing storytelling," Mr. Roizen said. "For Western prestige beauty brands, the rise of local competitors should serve as both a wake-up call and a warning."
This story is rooted in craftsmanship and cultural pride, resonating with younger Chinese shoppers who no longer see Western logos as symbols of sophistication. Instead, modern shoppers seek items that align more closely with their personal preferences, and many Chinese brands have embraced this shift as their core identity.
Brands like To Summer and Songmont draw inspiration from local history, art, and everyday life. The message is clear: modern luxury can be proudly Chinese.
Songmont's philosophy emphasizes "Eastern aesthetics," with store designs reflecting Chinese calligraphy. To Summer creates fragrances using traditional ingredients like tea, osmanthus, and preserved orange peel, and utilizes porcelain made in Jingdezhen, China's premier ceramics production center. Icicle draws upon the Confucian ideal of harmony and restraint.
This concept was consciously designed by Songmont's founder, Fu Song, from the beginning.
"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 is more attuned to local consumers. Songmont launched its own podcast focusing on the lives of urban women, which has resonated for its celebration of self-worth and diverse life values rather than social status, according to BigOne partner Amber Zhang. The campaign struck a deeper chord than those from global brands, she said.
For shoppers like Ms. Wan Yihuan, a 30-year-old Shanghai finance worker, this message resonates. Once a self-proclaimed Hermes and Tom Ford addict, she now carries a $210 Songmont hobo bag and wears 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 new 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 rose by more than 200% in the first half of the year, according to a source familiar with the figures who declined to be named. In October, they opened a store in Plaza 66, a glass-clad luxury cathedral long dominated by European names, becoming the first domestic brand to establish a presence in all ten of China's top-tier malls.
It may seem strange to associate Made-in-China with luxury, given the country's low-cost manufacturing history. However, these domestic premium brands are challenging that perception with a slower, more premium manufacturing process, which is communicated to consumers through localized marketing campaigns.
In 2013, Icicle acquired a garment factory that manufactures for Max Mara in China's eastern Jiangsu province. 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 elaborate filigreed shapes and enamel glazes into its jewelry. Mao Geping, China's equivalent to America's Bobbi Brown, teaches makeup application to local models, reaching millions of fans online.
Their popularity is spreading beyond China's borders. In London, 16-year-old Naomi Jiang now prefers designer brands like Songmont over 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, express their desire to expand globally. While the brands have not disclosed their overseas sales yet, analysts agree that the amount is likely still small.
"Chinese brands must look beyond China," Elvis Liu, founder and CEO of To Summer, 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."
Despite these opportunities, obstacles remain. Few domestic brands have crossed the 10-billion-yuan (S$1.83 billion) annual revenue mark, according to 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 a 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% or about $31 billion in sales in 2024, according to Euromonitor International data.
In contrast, no Chinese brands have more than 0.5% 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 as well, Ms. Cheng said.
"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 $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 $7 tote bags and $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."
