The mood on the ground in China luxury has turned over the past two months, after a promising start to the year. If August confirms this trend, with Qixi as the key milestone, the full year may look very different from what was expected in the spring, particularly against the higher comparables of the second half.

That is a personal judgment rather than a number. The figures will not settle it until third quarter results from brands come out in October.

It also runs against the current consensus. BCG and Altagamma published at the start of July, forecasting personal luxury growth of 2 to 5 percent this year. McKinsey and the Business of Fashion published a week earlier, forecasting 4 to 6 percent a year through 2030, based on a survey of over two thousand luxury clients in China and the United States. Both describe a market returning to growth.

They may be right eventually, though perhaps not in 2026. The difficulty is that this is the third time in three years the sector has concluded that China was recovering, and the first two conclusions looked just as well founded at the time.

The first came with the reopening after the pandemic. Borders opened at the end of 2022, the first half of 2023 delivered a real rebound, and maisons expected the supercycle to resume. By the second half of 2023 the residential property correction had taken hold and the recovery stalled. The second came at the end of 2024, when the market lifted in the fourth quarter on the expectation of government stimulus, after a year in which mainland spending fell close to 20 percent. The lift did not carry: sales fell around 8 percent in the first quarter of 2025 and around 9 percent in the second. The third recovery is the one we are in now, and it was the most convincing of the three, built on a return to slight growth in the second half of 2025, an easy comparison with the year before, a rising stock market, and a positive start to 2026.

Each time, the improvement was read as the beginning of a return to growth. Each time so far, it lasted a quarter or two. That is not proof that this one will end the same way, but it is a poor record on which to base a forecast, and every one of those stalls was explained at the time as a temporary interruption.

2. What the quarterly results will not show

Anyone checking this against published results will find something close to the opposite of what I have described, and the reasons merit explanation.

Consider first how a weak June lands in a quarterly figure. April and May were strong for many brands. A quarter with two good months and one poor one still reports as growth, or close to it, and reads as stabilisation. The months where a change would show clearly are July, August and September, and those results are not published until October. By then the second half will also be measured against the period when the market began improving last year. A brand that is up at the half can finish the year down without anything dramatic happening in between.

Then there is what the disclosures contain. Most groups do not report individual brands, so a single strong performer can mask several weaker ones. China is also rarely reported on its own. It sits inside Asia excluding Japan, together with Korea, Southeast Asia and Australia, and that regional number moves for reasons that have nothing to do with Chinese consumers.

Korea is the clearest example. Several houses described it as one of their strongest markets in the quarter to June, which means a healthy Asia excluding Japan number was partly a Korean result rather than a Chinese one. The Korean stock market then fell about a third from its June peak, so that support is going too, and the regional figure should weaken from July onwards for reasons that have nothing to do with China either.

None of this is a criticism of how groups report. But it means the published record arrives late and aggregated, while the market moves quickly and unevenly.

3. The macro pressure

Start with real estate, because that is where most household wealth sits. Across first-tier cities, resale prices fell about 5 percent in the year to June. Nanjing fell more than 11 percent, and second-tier cities more than 8. June was the thirty-sixth consecutive month of falling new home prices nationally.

Measuring the loss since the 2021 peak is harder than it looks. Take Shanghai, the most resilient of the big cities. On NBS data, the official index, which compares like with like, puts its decline below 10 percent, while average transaction prices are down close to 40 percent. The truth sits somewhere between, and either way it is a serious loss.

Shanghai is also where the market is closest to finding a floor. Resale prices rose slightly in June, and 25,100 second-hand homes changed hands, up 21 percent on the same month last year and the fourth consecutive month above 20,000. But a floor is not a recovery. Prices levelling off simply confirms the lower value of what people already own.

Alongside that sits a sense of income insecurity, concentrated rather than general. Pay caps at central government-owned financial institutions, with most of the reduction falling on bonuses, and youth unemployment in the mid-teens do not describe the average household. But they land on the salaried professionals who were buying luxury and on the graduates who were expected to start, and insecurity of that kind changes how people spend well before it changes what they earn.

Behind all of it sits consumer confidence. China’s consumer confidence index runs on a scale where 100 separates optimism from pessimism. It peaked at 127 in February 2021 and ran comfortably above 100 until early 2022. It has sat near 90 since and has not returned above 100 in any month, which means four years of a consistently pessimistic population rather than a merely subdued one. That is no longer a shock people are waiting out. It is the condition they have adjusted to, and that adjustment is where the cyclical story starts turning into a structural one.

4. The consumer has changed

The supercycle, roughly 2010 to 2019, recruited a particular customer: first-time luxury buyers in their twenties and thirties, with rising disposable income and a sense of security that came from family wealth held in property. These aspirational consumers kept buying through the closed-border years, then pulled back from 2022 and most have not come back. The real estate correction took the security away, many now carry family costs they did not have in 2019, and luxury has moved well down their spending priorities.

Gen Z starts from somewhere different. They are willing to spend, but they do not grant a European brand authority on the strength of its heritage alone. Where the earlier cohort accepted the established hierarchy of brands and worked their way up it, this one asks what a brand is offering and judges the answer on its own terms.

The entry tier that fed the whole pyramid has thinned, and the engine most brands built to recruit from it, the product offering, the first purchase, the customer who trades up over the following decade, was designed for a buyer who is no longer arriving in the same numbers or with the same assumptions.

The consumers who stayed are not the same either. They research before they buy, and they enjoy the research: materials, craftsmanship, a brand’s history and who its creative director is now. RED holds more of this than any comparable platform anywhere, written by other shoppers rather than by brands, and it takes seconds to find.

That knowledge has produced an appetite for what is new. Ten years ago the aspirational consumers flocked to well-known brands. Today’s consumers are more discerning and sophisticated. They are moving on from Celine to Alaïa, from Bottega Veneta to The Row, and will move again. For the largest and best-known maisons this is the hard part: if they rely on icons and stop innovating, they are the ones being moved on from.

There are also fewer occasions to buy for. Look at how people dress for work in Shanghai now against five or ten years ago. Proper dresses, shirts and shoes have given way to Lululemon pants, Birkenstock sandals, shorts and t-shirts. Social life has relaxed in the same direction, and more of it is organised around casual settings. A Dior dress has to answer a question it never used to face, which is how many times it is actually going to be worn.

5. What now justifies a purchase

Stand in Xintiandi on a Saturday and count the bags. Five years ago the young women walking through carried Louis Vuitton, Saint Laurent. Now they carry Coach and Songmont. The men who wore Gucci hoodies and Balenciaga sneakers through 2020 to 2022 are in Arc’teryx, Monday Sleeping Club, Pane.

A luxury purchase used to need very little justification. The name did most of the work, and the price was part of the appeal. That is no longer true, and a brand now has to give the consumer a compelling reason. There are three that work.

The first is value for money. Chinese consumers think twice before any luxury purchase in a way they did not in 2019, and this is not confined to the stretched end of the market. BCG and Altagamma found this year, across their global sample, that 70 percent of luxury consumers walked away from a purchase in the past twelve months because the price felt unjustified, and this held at the top of the pyramid as much as the bottom. It is a large part of why Coach, Ralph Lauren and Songmont have done well here: not because they are cheap, but because what you get for the money is obvious. The same reasoning runs to the high end of the price scale, where the question becomes what a piece will be worth later. Someone who watched the value of the family home fall for several years asks that question now, and jewellery answers it easily, because the material is worth something whatever happens to the brand. So does a Birkin, for the simple reason that everyone knows its price holds.

The second is the product itself. Consumers scrutinise the raw materials, the construction, the craftsmanship, to evaluate whether the product justifies its premium price point. Loro Piana serves as the quintessential example. Nobody acquires a cashmere coat for its resale value, nor do they need to, as its intrinsic value is obvious to the touch. The reverse is just as visible: a bag whose price rose every year without a corresponding upgrade in quality leaves the brand exposed, especially when consumers can easily cross-reference its value on the grey and resale markets.

The third is style and substance, which encapsulates the true essence of luxury fashion. Recognition used to be enough on its own. What resonates today is a brand’s compelling narrative: whether its design vision is forward-looking, and whether it articulates a distinct point of view for the individual carrying it. Chanel and Dior have both captured a regenerated momentum through the revitalised artistic visions of Matthieu Blazy and Jonathan Anderson, while Prada (and Miu Miu before) have experienced strong momentum driven by the strength of their current creative output rather than their historical legacy.

The social cost of not buying has fallen away as well. On RED, young people post about how little they spend, and the restraint itself is what is being shown off. More people buy pre-owned, and more sell what they no longer use, on the principle that owning less is better. Frugality has become a way of appearing discerning rather than an admission of being short of money.

6. The money is being spent elsewhere

Chinese households are still spending. Official figures for the first half of 2026 show retail sales of services up 5.3 percent while goods managed 1.1 percent. That is not a population cutting back. It is a population buying different things, and the categories growing fastest are the ones spent on yourself rather than on being seen: travel, fitness, wellness, eating out, self-improvement and hobbies. The National Bureau of Statistics singled out cultural, sports and leisure services among the fastest-growing in the first half.

Domestic travel has grown, and so have long-haul trips off the usual circuit, to Iceland, Tanzania or Morocco. Five years ago these were barely on the list. Now they come up often on my WeChat feed. What matters for the luxury sector is that these are trips with nothing to buy. A consumer shopping in Tokyo rather than Shanghai is the same wallet in a different city. A consumer on safari has left the category altogether.

The shopping destinations themselves have narrowed at the same time. Japan was the arbitrage market, where the same bag cost around a fifth less and a weekend could pay for itself. Chinese arrivals there fell 56 percent in the first half of this year, to 2.1 million, after Beijing advised against travel amid tensions between the two countries, with flights cancelled into March. The United States has been closing for longer. The Middle East corridor has been disrupted by the war. Korea absorbed some of the travellers redirected from Japan, though its duty free business, which is what used to convert those visits into luxury purchases, has halved since 2019. Europe is the exception and is recovering, with Schengen visa applications from China up around 20 percent year on year in the first quarter.

On the face of it, that should have pushed spending back onto the mainland. It has not. Some of it followed the travellers to Europe. The rest went to the trips where nothing gets bought.

7. What growth looks like now

Much of the luxury sector continues to formulate strategies for a consumer that no longer exists. Part of this is the aspirational buyer of 2019, who has moved on. A larger component involves a Chinese consumer mistakenly expected to behave like the one in Paris or New York, ascending a brand hierarchy at a conventional pace and adopting the same tastes. That specific consumer archetype is increasingly elusive in this market.

Brand awareness alone is no longer a differentiator. Recognition opens the conversation without guaranteeing a transaction; a maison that fails to justify its premium pricing will find that engagement ends immediately. The answer has to come from the product offering: material quality that is evident, craftsmanship that withstands scrutiny, a forward-looking design direction, and sufficient innovation to captivate a highly fluid consumer base. The assortment also must align with contemporary lifestyles, which skew more casual than most seasonal merchandising plans anticipate.

One pattern deserves close examination. Every brand growing in China is also growing globally, while the reverse does not necessarily hold true: maisons performing well elsewhere can be flat or declining here. China can no longer be treated as a separate market addressed with a China strategy. It has evolved into the more demanding version of a global test, the place where a brand discovers first whether it commands genuine market desire.

Which is why the forecasts are the wrong metrics to monitor. Whether the aggregate luxury market grows 2 percent or 5 percent next year has little relevance to individual houses, because the distance between the strongest and the weakest is far greater than any macro figure shows. The questions worth asking are whether a product’s value proposition remains coherent to the target consumer, and whether a brand truly understands who that consumer has evolved to become.

What I write here draws on public signals and direct observation, not on client work.

Ask most people to name Chinese luxury brands and you get the same short list: Laopu Gold, Songmont, Icicle. Three names, repeated like an anecdote, as if Chinese luxury and fashion brands were a handful of exceptions rather than a market. These three brands are real, and they matter. But treating them as the whole story misses what is actually happening: a shift in both what China’s fashion industry can make and what its consumers want to buy, and the early formation of an ecosystem dense enough to produce brands across the full range of price and positioning, not one or two at a time.

That ecosystem is still young. Most of the brands did not exist fifteen years ago, and very few are large by European standards. But it moves at the speed the rest of China moves, and it sits on something no earlier generation of designers had behind it: a domestic market of enormous scale, with consumers increasingly willing to buy domestic brands they would once have dismissed for a European logo. A brand in China can reach real size without ever leaving the mainland, which changes the economics of building one.

There is a precedent, though a loose one. Japanese fashion made a similar journey, from a manufacturing base into a design culture that the West took seriously: from Kenzo and Issey Miyake in the 1970s, to the shock Rei Kawakubo and Yohji Yamamoto caused in Paris Fashion Week in 1981, and on through the commercial and streetwear phases of the two decades that followed with Undercover, Sacai, or Nigo. China is moving through somewhat similar stages, but compressed, from a post-manufacturing base into the Western fashion system in years rather than decades, with Uma Wang, Feng Chen Wang and other designers now showing on its fashion calendars.

This analogy breaks in one important place. Japan went global almost entirely through the runway, exporting taste. China has something else behind it: a domestic market many times the size of Japan’s, a far bigger base to grow and fund expansion from, and a willingness to use acquisition and outside capital to reach abroad, as when Icicle acquired France’s Carven and Kering recently took a stake in Icicle itself. The runway phase is well underway, with Chinese designers appearing regularly in Paris, Milan and London Fashion Weeks. The commercial and cultural crossings have begun, and the clearest sign of them is at home, where foreign shoppers now queue at Songmont and Pane in Shanghai, the mirror image of the Chinese tourists who once queued on the Champs-Élysées.

Mapping the market

This map covers 45 brands, plus the handful of platforms that support them. It aims to be comprehensive rather than exhaustive: enough of the market to see its shape clearly, though not every relevant name, and I have surely missed some worth including.

To better understand the ecosystem, I sorted it on 2 axes based on objective measurement criteria: at what price points brands sell, and whether their reach is domestic only or global.

The first is price point: whether a brand’s core selling price sits above or below 600 USD, a rough line between luxury and accessible positioning. The second is global reach: whether a brand has established itself abroad, or remains domestic. Here the test is deliberately strict. A brand counts as global only with a real foothold outside China: owned stores abroad or third-party stockists that chose to sell it. Shipping overseas from its own website does not count. That line, between a brand with real presence abroad and one that merely wants it, is the most important on the map, because the whole question of whether Chinese fashion can grow global turns on which side of that line a brand sits.

Top-right include luxury brands with global presence: 16 of them, some through international wholesale and the fashion-week circuit, a few through their own overseas stores. Top-left are luxury brands with only domestic presence: a small group of 4. Bottom-left is the largest corner by far, 24 accessible brands that are domestic, the commercial and streetwear names that make up most of the market by volume. And bottom-right, the corner that matters most precisely because it is nearly empty: accessible brands with a genuine foothold abroad. There is only one.

The emptiness is easy to miss, because many brands look busy going global. 10 of the 24 accessible-domestic brands already ship abroad from their own sites: multi-language storefronts, checkouts in dollars and euros, orders shipped worldwide. But that is cross-border e-commerce, the first and cheapest way out, not an established presence abroad. None has yet taken the harder step of an owned store or a foreign partner. The takeaway is blunt: at accessible prices, reaching the world has barely begun.

How brands are built

The map shows where brands sit. It does not show how they are built. On that question I split the market into four engines, two in each price tier, divided by a question that changes as you move down the price scale.

At the luxury end, the question is whether a brand owns its stores or sells through others. A fashion house is built around its own retail: Uma Wang and Comme Moi run their own stores, control how the brand is seen, and carry a permanent identity rather than a season’s idea. A designer label works the other way, on the founder’s name and on other people’s shelves. RUI, Feng Chen Wang and Pronounce reach their customers mainly through the international wholesale system and the fashion-week circuit, not through stores of their own. The houses are few and the labels many, which is worth holding on to for later.

In the accessible tier the question changes, because here almost every brand owns the distribution channel. What separates them is scale and logic. Commercial brands are built on product and a store network reaching across cities: Songmont, which grew from an online seller into a chain of its own stores, Pane, which runs its own flagships in Shanghai, Beijing and Shenzhen, and JNBY, a listed group with a large store base. Streetwear and community brands are built on culture, drops and collaborations, with a flagship or two that works as a gathering point more than a distribution arm: Randomevent, built on 90s youth culture with a flagship that doubles as a café and community space, and Monday Sleeping Club, a Shanghai label grown out of youth internet culture embracing the “lying flat” (tang ping) movement.

So the organising question shifts with the tier. At the luxury end it is whether a brand owns its stores or sells through others. In the accessible segment, where owning stores is common, it is whether the brand is built for retail scale or for cultural pull. Four engines, two questions, and each brand travels, or fails to travel, according to which one it answers.

The ecosystem behind them

Few of these brands got far on their own. Behind them sits a structure that finds, shows, stocks and sells these brands, and the presence of that structure, more than any single name, is what makes this a market rather than a run of luck.

The pioneer was Dongliang, a curated concept store opened in 2009 and among the first anywhere to stock only Chinese designers, an early home for names like Uma Wang and Angel Chen before they were established. It set the template that the ecosystem still runs on: a shop with a point of view, editing local design for a customer who trusts the selection.

Out of that same world came Labelhood, which took the model further and is the clearest reason the pipeline exists. Labelhood is a retailer and an incubator at once. It runs its own stores across Shanghai and Shenzhen and buys in the designers it believes in, and it also discovers young talent and produces their runway shows so they do not have to fund their own, taking on part of the risk itself. It does this in partnership with Shanghai Fashion Week, which invited Labelhood to run an independent-designer showcase in 2016 and has hosted it since: the week’s main stage belongs to larger commercial brands, while Labelhood is where the emerging ones are found. Many of today’s names, Shushu/Tong among them, came up this way.

Around them sit the players that complete the system: the streetwear hub DOE, a widening field of multi-brand stores, and the wholesale showrooms, TUBE and its peers, that connect designers to the buyers whose orders keep them alive.

This is the part the three-name story misses. The brands are the visible output. The machine that finds, funds, shows and sells them is the reason there will be more.

The global expansion

The map left a puzzle. Luxury has reached globally and scale has remained domestic, and the two almost never meet. To see why, follow the two ways a Chinese brand can actually go abroad, because they are not the same road and they do not carry the same brands.

The first route is wholesale and the runway. A designer shows on an international calendar, the press and the buyers follow, and multi-brand stores abroad, the SSENSE and Dover Street Markets of the world, place the orders that put the label in front of foreign customers. This is how almost all of the globally present Chinese names got out, and it is the closest parallel to the Japanese designers who crossed on the Paris runway a generation ago. But it is a fragile road. The brand does not own the shelf it sits on, and it rests on the continued pull of one designer’s name. When either gives way, the presence abroad goes with it. Calvin Luo is the cautionary case: a Chinese designer stocked internationally and shown on the New York calendar, who in 2024 announced he would wind the label down. Global reach, by the strict definition, and still not enough to sustain the business.

The second route is to own the channel. Instead of renting foreign shelves, the brand builds its own stores abroad, which is slower and far more capital-hungry, but what it builds is durable, because the brand controls the distribution rather than depending on someone else’s. Icicle is the clearest case. It expanded the hard way, its own retail network at home and then its own stores in Paris, growth funded store by store rather than handed over by a wholesaler. Its 2018 acquisition of the French house Carven did not, on its own, carry Icicle abroad; Carven does not sell Icicle’s clothes. What it bought was a platform and standing inside the Paris system, a French house with ateliers and a fashion-week seat, while the Icicle brand still has to fund its own expansion. Then the direction of travel inverted: in 2026 Kering, the French luxury group, took a stake in Icicle itself. A European luxury conglomerate buying into a Chinese company is the signal worth pausing on, evidence of a second engine the runway route never had, a home market deep enough to build on and capital, foreign now as well as domestic, willing to back the crossing.

Put the two routes together and the empty corner of the map explains itself. For these accessible brands the first route is simply not viable: wholesale does not typically carry a sub-$600 brand, because the margins do not survive the markup a foreign stockist needs, and the international buyer is not looking for affordable Chinese fashion on those shelves. That leaves the second route as the only real path to global expansion, their own stores abroad, which is capital-intensive and deliberate, a strategic build rather than a quick step. So the ordinary way out is also the hard one, and most of these brands are simply not there yet. That is why ten of them ship from their own sites and go no further for now, and why only one has genuinely crossed. Shipping abroad is easy to switch on; opening and running stores overseas is a decision a brand makes when it is ready, and for most that decision has not yet come.

Japanese brands crossed the same way, by owning their stores abroad, only slowly and out of their own success rather than by acquisition or outside capital. That is the road China’s accessible brands have barely started down, and it is where the question of what happens next really sits.

From local love to global desire

Underneath the routes and the capital sits what actually drives them: these Chinese brands connect with the local consumer in a way that resonates. They carry a cultural fluency, an instinct for what the Chinese consumer wants and how they live, that a foreign logo cannot easily borrow, and for a generation that grants European heritage no automatic authority anymore. That is why the domestic brands are becoming a genuine alternative to the international ones in China, not on price, but on meaning. The desire is real, and it is the engine everything else runs on.

Which is what makes the open question the right one to end on. Japanese brands did not cross the world on the runway or on capital. They crossed because Japanese designers offered something the West found compelling, a different idea of beauty that people wanted, and the stores and the money followed the desire. Chinese brands have built that pull at home. The question is if it can travel: whether the cultural confidence now reshaping the domestic market can move a consumer in Paris or New York the way it moves one in Shanghai.

If it can, the rest is not hard. Capital follows desire, and the moment a Chinese brand proves it can be wanted abroad the way it is wanted at home, the money to build will find it. That is the thing to watch. It is also why there will be more to write.

What I write here draws on public signals and direct observation, not on client work.

A growth number tells you a brand is up. It does not tell you why, and the why is everything. One brand is up because a product caught fire this season. Another is up because it has been building desirability for years. The same figure hides two different businesses.

That difference is the whole of this piece. A brand’s demand at any moment is part baseline and part pulse. The baseline is durable desire, the demand that holds whatever the season’s mood, slow to build and slow to fade, and it compounds. The pulse is transient demand, the spike that arrives fast and, left alone, fades just as fast. The most expensive mistake in this industry is reading the peak of a pulse as the new level of the baseline, then setting store counts, production, and price increases to a curve that was always going to recede.

Two forces run through everything that follows. The first is demand, the shape of what people want. The second is brand identity, because a maison both creates its own pulses and decides whether they leave it stronger or weaker. Keep both in view.

How a product becomes a pillar

Demand lives in products. Pillars are the products that carry the baseline: the Hermès Birkin, the Chanel Classic Flap, the Lady Dior. A pillar doesn’t need to be a single product. Louis Vuitton’s Monogram line, the Speedy, the Neverfull, the Keepall, is one set of house codes carried across iconic collections. Seasonal and trend products carry the pulse.

The split is not binary, and the interesting part is the movement between the two. A product can be launched as seasonal, prove itself, be kept across several seasons as carry-over, and eventually settle into the permanent core. Run that way, flow is not only visibility. It is the audition for future baseline.

The Dior Book Tote is the clearest recent example of a product climbing the whole route. Maria Grazia Chiuri introduced it for Spring/Summer 2018 as a canvas piece with resort coding, photographed on the beaches of Capri and Saint-Tropez, intended at the time as a seasonal carryall rather than a year-round bag. It became a hit, and Dior built it out, reissuing it season after season in leather, Cannage, Toile de Jouy and new sizes until it had become part of the house’s permanent range. A seasonal launch converted into stock.

How a brand gets hot

So where do pulses come from? A product going viral is the output, not the cause. Three forces produce the spike, and all of them run through brand equity.

The first is creative momentum, a designer generating fresh desirability through the product itself. Jonathan Anderson’s years at Loewe are the cleanest case: the Puzzle and a craft-led design language turned a sleepy leather brand into one of the most wanted names in fashion. The second is cultural relevance, where the brand channels a current larger than itself and becomes its vehicle. Virgil Abloh’s Louis Vuitton, from 2018 until his death in 2021, did exactly this, bringing street culture inside the maison in a way that read as the moment rather than the product. The third is riding an external trend, where the pulse originates entirely outside the brand and accrues to whoever is positioned to receive it. Quiet luxury was not manufactured by Loro Piana, Brunello Cucinelli or Zegna through a designer or a campaign. The trend formed across the market, and their existing product and positioning meant the demand landed on them. The same wave was a missed opportunity for other brands that were not built to catch it.

Amplification, the celebrity, the KOL, the platform, RedNote, sits on top of all three. It is a multiplier, not a cause. It scales a pulse that creative momentum, cultural relevance, or a trend has already created, and amplification with nothing underneath produces the spike that fades the fastest, the one most often mistaken for baseline.

The relay

No pillar pulls forever. Even an icon’s contribution to growth rises, matures, plateaus, and softens. A single pillar, however strong, cannot sustain a brand on its own. The maisons that compound run a relay: as one pillar matures, the next is already being built to take the baton, so the brand holds a portfolio of pillars at different stages and the baseline keeps climbing even as individual products roll over. Scale helps here, because a larger baseline funds more attempts at the next pulse, which is why the same fading trend is far more dangerous for a small brand than a large one.

Bottega Veneta has run this well. The Pouch, from Daniel Lee’s 2019 collections, was the soft, strapless clutch that announced the brand’s revival. The Jodie, the knotted Intrecciato hobo that arrived in early 2020, became the volume driver that carried the house through the next several years. The Andiamo, the structured everyday bag Matthieu Blazy introduced for Resort 2023, is the current climber, taking the growth role as taste moves toward structured, practical shapes. Three pillars at three stages, the baton passed while the previous one was still selling.

The playbook travels. Songmont, the Chinese house founded in 2013, is running a recognisable version of it. The Luna, the soft crescent hobo that broke the brand out and became its volume driver, is the anchor. The structured Drippy Roof arrived while the Luna was still selling, catching the turn toward firmer shapes, and the Gather collection has since refreshed the softer end of the line. The same relay, earlier in its run, on home ground.

The alignment test

The last principle is the one with stakes. Whether a pulse helps or harms depends on whether it aligns with the brand’s identity, its codes, its image, and the consumer it is built for. Alignment decides the sign of what the pulse leaves behind.

Aligned flow builds. It brings in the consumers a brand is built for, the product graduates into the pipeline, and the baseline settles a step higher. Misaligned flow is destructive, and the damage is asymmetric. An off-brand trend can sell hard in the moment, but it alienates the core and dilutes the codes, so when it fades the brand loses not only the pulse but part of the baseline it already had. The downside is bigger than the upside ever was, because it damages the baseline that took years to build. A house with a clear sense of itself can tell whether a trend is aligned and refuse it. A house without one chases the pulse, because it has no basis to say no.

Burberry is the cautionary case, and it is worth remembering how it looked. Its check, the camel-and-red tartan that became the house’s signature, began life quietly, a lining inside the trench, an insider’s mark. Around the turn of the 2000s the house licensed it hard, spreading the pattern across more and more of its range to chase booming demand. It worked, until it did not. The check turned up on everything, counterfeits flooded street markets on the back of that ubiquity, and the pattern slid into a meaning the brand had never chosen and could no longer control. What had signalled the house now cheapened it. Reclaiming it took the better part of a decade of deliberate work, buying back licences, and pulling the check back to a sliver of the collection. The trend sold hard while it lasted. What it left behind was a brand worth less than before it began.

What this looks like in China

The mechanics are universal, and a brand that is hot in China is usually hot globally, so the China story is not a different cast of names. It is a different set of conditions for running the same relay.

Amplification works through different machinery here, RedNote, activations, a dense layer of local KOLs, so pulses form fast and, just as often, fade fast. The alignment test is harsher too, because the Chinese consumer, and Gen Z in particular, grants no authority to a European name by default and can pull up cross-market prices in seconds. A misaligned pulse is punished faster and the baseline damage shows sooner. And because the majority of Chinese luxury spending now happens on the mainland rather than abroad, the relay has to be run inside China, on Chinese platforms, against domestic pillars being built in real time.

Songmont, the Chinese brand, shows the full machine at work, and what it does with it is the point. It surrounds its launches with brand friends chosen for substance over star power, the tennis champion Li Na and the actress Wu Yanshu among them, and a coordinated push across RedNote, Douyin, Tmall and livestream, even a podcast that never mentions the bags, an approach that Baiguan have documented well. The amplification is patient, aimed at durable desire rather than a quick spike. It is amplification used to build the baseline, not just to chase a pulse.

The 2026 discipline

Universal growth hid a lot. When every brand’s numbers are rising, you cannot tell which are building durable demand and which are just riding trends. The reset has made the difference visible.

The lesson is easy to say and hard to do. Know which part of your demand is stock and which is flow. Spend on flow, because it keeps you culturally relevant and brings in consumers you do not have yet. But never count it as stock. Build and renew your pillars on purpose, and start the next one before the last one rolls over. And keep every pulse aligned to who you are, because the misaligned ones cost more than they ever pay. It comes back to the question the field guide ended on. Not whether you are growing, but what kind of brand you are, which consumers you are for, and what you credibly bring them at the price they will pay.

What I write here draws on public signals and direct observation, not on client work. Product details and designer timelines are drawn from public records and brand disclosures; the framing is my own.

China’s personal luxury market in 2026 is smaller than it was at its 2021 peak: Mainland China spending is estimated at roughly €44 billion in 2026, against €56 billion in 2021, a market that has lost more than a fifth of its peak value. Growth has not returned on the timeline almost everyone in this industry was forecasting in early 2023. And yet, some categories and channels are quietly thriving, certain brands are posting double-digit growth, and a generation of domestic brands that didn’t exist a decade ago is taking share that used to belong, by default, to European maisons.

The reset is not cyclical. It is, I think, the most important point to understand about this market today: what looks like a downturn is in fact a structural repricing of who the Chinese luxury consumer is, what they buy, how much they pay, and where they pay it. This post is an attempt to describe that shape, the history that produced it, what the supply side and the demand side look like today, and what brands need to internalize before they can do anything useful in response.

Part 1 — How we got here

The story breaks into four phases.

The supercycle (roughly 2010–2019). China’s luxury market expanded over essentially the entire decade preceding Covid, driven by a generation of newly wealthy consumers entering the category as middle and upper-middle-class incomes rose. McKinsey notes that the number of Chinese households purchasing luxury goods doubled between 2008 and 2014. The boom did not move in a straight line: an anti-corruption campaign in 2013–2014 produced a real slowdown, particularly in watches, fine spirits, and other gifting categories. But the underlying trajectory resumed and accelerated through the second half of the decade. By one industry estimate, the CAGR of personal luxury goods in Mainland China reached 48% between 2016 and 2019, a level of growth almost without precedent in the global category. European brands building three- and five-year plans around continued China growth was the consensus, not the exception.

The Covid acceleration (2020–2021). It’s worth pausing on this period, because the mainstream narrative at the time was misleading. With borders closed, Mainland spending surged, up 39% in 2020 and another 31% in 2021 per the Bain-Altagamma series, which led the industry to conclude that luxury spending was booming. But this was the effect of “trapped spending.” If we look at total Chinese luxury consumption (Mainland plus overseas combined), it was actually €59 billion in 2021, a third below its 2019 level of €93 billion, because outbound spending had collapsed. What looked like a structural shift toward the domestic market was, in reality, a forced one. “China is our growth engine” was the line every Europe-based CEO delivered on earnings calls. The arithmetic was real for individual brands operating in the mainland. But at the aggregate consumer level, total Chinese luxury spend had not actually expanded the way the domestic numbers alone suggested. That distinction would matter enormously when the borders reopened.

From lockdown to letdown (2022–2023). 2022 is the year of the Shanghai lockdown and partial lockdowns across much of the country. Consumer confidence collapsed alongside retail: China’s consumer confidence index, which had peaked at 127 in February 2021 and ran above 100 throughout the supercycle, fell around 40 points in early 2022 and hit an all-time low of 85.5 that November (it has not returned above 100 in any month since then). The personal luxury market contracted around 9% in 2022 as a direct consequence.

The industry expected 2023 to deliver a V-shaped recovery: borders reopening, the supercycle resuming, Chinese consumers flooding back to Europe. H1 2023 initially supported that view, with a robust rebound on the back of low Q2 2022 comparables and an initial recovery in sentiment. The Mainland market grew around 11% for the full year. But by H2, sentiment had weakened again under the weight of the property market correction, and the V-shaped recovery had become an L. Grey-market discounting began widening visibly during this period, an early signal that the substantial price increases brands had taken during the trapped-spending years were disconnecting from what consumers were actually willing to pay. In retrospect, the analytical mistake of the period was treating 2023 as a slow recovery rather than what it actually was: the early stage of a structural reset.

The recognition phase (2024–2025). This is when the industry stopped calling it a soft patch. The Mainland market declined 20% in 2024, reverting roughly to 2020 levels, a sharp deceleration that worsened through the year, with Q3 the weakest quarter and only a marginal Q4 lift driven by anticipated stimulus measures. 2025 then broke into two distinct halves: H1 still firmly negative (Q1 around -8%, Q2 around -9%), then a turn in H2 as favorable base effects kicked in, a stronger stock market lifted sentiment marginally, and Q4 returned to slight positive growth (+1 to +3%). The full-year decline of 5% masked that inflection. By the end of 2025, the language brands and analysts were using had shifted: from “when does the recovery come” to “what does the new equilibrium look like.” Bain’s own report framed 2025 as recalibration, and that’s the right word for it. The market had stopped falling sharply, but the shape it was settling into was clearly not the shape of 2021.

Part 2 — The supply side: what brands look like in 2026

Three structural movements are reshaping how brands operate in China. They are not new in 2026, most have been developing for at least two years, but the shape they’ve settled into is now clearly visible.

Footprint and investment, recalibrated

For most of the supercycle, the strategic question facing a global brand in China was where to open next. The growth formula was simple: open more stores, raise the marketing budget, watch revenue follow. In the recognition phase, that question reversed. The shift now is a consolidation of investment around a smaller number of flagships and key cities (Shanghai, Beijing, Chengdu, Shenzhen), with the strategic question moving from “where do we open next” to “which stores actually earn their place.”

A parallel shift has happened in how brands deploy marketing dollars. The supercycle playbook was brand amplification, large activations designed to maximize visibility and impressions, often through KOL and platform-driven campaigns. The 2026 playbook is increasingly experiential and culturally anchored: Chanel’s Espace Gabrielle Chanel at Shanghai’s Power Station of Art, Loewe’s Crafted World exhibition at the Shanghai Exhibition Centre, Louis Vuitton’s The Louis destination in Shanghai. These are not advertising in the traditional sense. They are bids for desirability and cultural relevance at a moment when both have to be re-earned.

Pricing, fractured on multiple axes

The pricing question used to be simple: set the MSRP, manage the channel, raise prices annually. In 2026, brands face price pressure on at least three fronts that interact with each other.

First, the gap between the mainland price and overseas prices on identical products is now structural and well understood by consumers. A Louis Vuitton CarryAll PM is roughly 20% cheaper in Japan than in Mainland China on a tax-refund basis; the Miu Miu Arcadie Regular is close to 30% cheaper in France, and the Balenciaga Rodeo Mini around 23% cheaper. Chinese consumers can pull up cross-market price comparisons on RedNote in seconds, a level of transparency that did not exist five years ago. The narrowing of these gaps in 2025, driven partly by deliberate brand action on global price harmonization, was one factor that helped pull spending back to the mainland. But the gaps haven’t closed, and the consumer awareness hasn’t reversed.

Second, the grey market has become a parallel price discovery mechanism that brands cannot fully control. The discount level varies dramatically by brand, and depends heavily on whether the brand has significant overseas wholesale operations feeding parallel channels, but it is increasingly read by both consumers and investors as a leading indicator of brand health. Some brands (Hermès, Chanel, LV), sit at the top of this distribution, with shallow discounts and even occasional above-MSRP premiums on iconic lines. Others have seen grey market discounts settle in the 40–50% range or deeper, which functionally resets consumer expectations and makes MSRP de-anchoring a structural rather than tactical problem.

Third, the pre-owned market has grown into a meaningful pricing reference in its own right. China’s resale market grew 15–20% in 2025, now sitting at 8–10% of the primary market, still well below the 20–30% in developed luxury markets, but with a trajectory that suggests it will keep narrowing the gap. Livestream-driven authentication, generational acceptance of pre-owned as legitimate rather than shameful, and rising primary market prices all feed this growth. For brands, pre-owned represents both a competitive channel and an emerging reference price that further constrains primary market pricing power.

The polarisation across tiers

The 2026 brand landscape has bifurcated more sharply than headline numbers suggest. Q1 2026 earnings made the divergence visible: Hermès maintained slight growth in Greater China against a tough Lunar New Year comp, LVMH reported Asia ex-Japan at +7%, and Kering China was down mid-teens. Premium and affordable luxury houses with strong value propositions accelerated through 2026. Tapestry’s Greater China grew 55% in constant currency in Q3 FY26 (the quarter ending March 2026), led by Coach and powered by Gen Z customer acquisition. Ralph Lauren reported a similar pattern in its Q4 FY26 (also ending March 2026): China sales grew more than 50% in the quarter and 40% for the full fiscal year. Below that, a generation of domestic brands has begun pulling significant share, particularly in handbags: Songmont’s online handbag sales grew around 40% in 2026 according to Re-Hub estimations, with prices placing it in direct competition with Coach and the lower end of European luxury.

The pattern that’s emerging is one in which absolute luxury (the very top, anchored by Hermès, Chanel, Loro Piana, and a handful of others) holds, premium and affordable luxury offering perceived “true value” finds growth, domestic players move from the periphery to direct competitors, and the aspirational middle (brands whose entire identity in China was built on the supercycle’s expanding entry tier) faces the hardest repositioning question.

This is why the question “what kind of brand are you in China in 2026” is genuinely difficult. It used to have an easy answer: a global luxury house with a China growth story. That answer no longer holds without specifying which segment, which consumer, and at what price.

Part 3 — The demand side: who’s actually buying

The aggregate consumer story (fewer buyers, more discerning) is true but too simple. What’s actually happening is a reordering across multiple consumer segments simultaneously, and each segment is moving in its own direction.

Multiple consumer cohorts, each shifting differently

The four-segment view we used in my recent Morgan Stanley Summit presentation is useful here.

The silver cohort, older consumers with accumulated wealth and reduced savings pressure, is structurally the most underpenetrated and fastest-growing segment of the market. Their preferences skew toward quality, permanence, and value retention: jewellery and watches at the high end, quiet luxury, rather than fashion. This is consistent with what has been highlighted in other analysis as the “wealth-creating generation” maturing into more refined preferences.

The missing aspirational millennials are the central story of the buyer-base contraction. The cohort that drove the supercycle, first-time luxury buyers in their late 20s and 30s often financed by household wealth tied to property, is now squeezed by wealth erosion and family responsibilities. They are deprioritizing luxury in favor of savings and essentials. The entry tier that fueled growth from 2010 onward has structurally thinned, which is the segment-level reason headline growth has stalled.

Gen Z is the most analytically interesting cohort, because their relationship with luxury is different. Their confidence to spend remains strong, but their reference points are not based on the traditional luxury hierarchy. They are heavily influenced by social platforms (RedNote in particular) and are willing to buy and engage with brands that older cohorts would not have considered “luxury” at all. The brand authority that older cohorts grant by default to European heritage maisons is something Gen Z requires to be earned.

The lower-tier city consumer is significantly underpenetrated relative to income. Consumers in low-tier cities often have higher disposable income relative to fixed costs than their tier-1 counterparts, and are willing to spend. But reaching them requires dedicated strategies tailored to how they actually engage with luxury, not a scaled-down version of the tier-1 playbook. A real opportunity, but one most international luxury has not yet built the channels to serve.

The implication is not that there’s no growth available. It’s that the growth available is much less obvious than it was during the supercycle, and it requires brands to make active choices about which segments they’re for, rather than assuming a rising tide will recruit consumers across all of them.

Repatriation, structurally

Pre-Covid, the majority of Chinese luxury spending happened outside Mainland China. In 2019, roughly 67% of Chinese luxury purchases occurred overseas: at flagship Parisian boutiques during European holidays, at Japan and Korea duty-free, at Hong Kong stores during weekend trips. Mainland China was the minority share of where Chinese consumers actually bought their luxury goods.

The Covid years erased overseas spending by force, the “trapped spending” period referenced earlier. With no alternative, consumers shifted their entire luxury journey onshore: discovery, consideration, and purchase all happened domestically. Three years of that pattern was long enough to break old habits and form new ones.

The reopening was expected to swing the ratio back toward pre-Covid levels. It has not. Mainland consumption now dominates at around 65% of Chinese luxury spend, driven by brand-led global price harmonization narrowing the arbitrage opportunity, and by substantial improvement in the domestic retail experience itself: stores have been upgraded, clienteling programs have matured, and the in-Mainland purchase experience now genuinely competes with what consumers used to travel for. The approximate split is expected to hold through 2026.

The structural implication matters. The “Chinese consumer in Paris” model that anchored European boutique strategy through the 2010s is no longer the dominant channel. Brands now have to win Chinese consumers primarily inside China, not catch them on their way through Europe. Price arbitrage hasn’t disappeared, but it is no longer a strong enough reason to travel overseas to shop, and consumers seeking a lower price can simply turn to the grey market. The base case is that a meaningful majority of Chinese luxury spending now happens on the mainland. For brands whose European retail networks were built around the old channel mix, that’s a structural change to absorb.

A reordering of what “luxury” signals

Perhaps the deepest demand-side shift is in the symbolic content of luxury itself. During the supercycle and its Covid extension, much of the demand was built on “aspiration-as-identity”: logo-driven status signalling, where wearing a recognizable brand publicly conveyed a clear and valued social position. That signalling has structurally cooled. What the remaining luxury consumer prioritizes now is some combination of cultural resonance (the brand has to mean something in a Chinese context, not just borrow Parisian prestige), craft credibility (the product has to withstand close inspection), and price rationality (the consumer knows what the product costs elsewhere and is unwilling to pay an unjustified premium).

Three things are happening simultaneously at the brand-tier level. Local Chinese brands (Laopu, Songmont, Documents, Icicle) have moved from being outside the luxury consideration set entirely to being legitimate alternatives offering genuinely competitive product, design, and retail experience. They are winning not on cultural pride but on relevance: products that work for the Chinese consumer’s life and taste at price points the consumer judges fair. Premium international brands that used to sit comfortably in the “accessible luxury” tier are being pulled upward in positioning, becoming more expressive and more aspirational in their China execution. And the traditional luxury tier itself is facing a definitional question: in a market where heritage is no longer enough on its own, what is luxury actually selling?

Part 4 — What 2026 actually tells us

The 2026 market is not waiting for a rebound to its pre-Covid shape. It is settling into a new equilibrium that has been forming since 2022: more concentrated by categories and by brand tier, more polarized between brands with a clear strategy and a positioning that resonates with consumers and brands still searching for one, and served by a consumer base that is fewer in number but sharper in judgment.

The most important implication for brands operating in China is also the most uncomfortable: most brands are not going to be Hermès or Chanel. The integrity tier is small and the brands sitting in it earned their position over decades. The strategic mistake of the next two years will be brands trying to reposition upward without the brand equity or product to support it, while neglecting the question they can actually address: who are our consumers in this market today, what value do we credibly bring them, and what does our offer look like at the price points they will pay?

Honest positioning is rare in this industry. The supercycle hid that absence: when growth is universal, every brand can claim to be on a trajectory. The 2026 shape exposes it. The brands that will do well in China from here are not the ones with the loudest activations and biggest brand ambassadors (though this can help in the short term). They are the ones that know which Chinese consumers they’re for, and that have the product offering and the brand message to serve them.

Closing

Front Row Shanghai will go deep on the specific topics of this picture over the coming months, on pricing, channels, brands, the consumer, and refer back here for the long view. When future posts make a claim about the supercycle, the Covid acceleration, the lockdown-to-letdown years, or the recognition phase, this is the post they’re referring back to.

Subscribe if you want to read the next ones.

Note on sources used: Bain & Company’s China Personal Luxury Goods Market reports (2022 through 2025 editions) and the Bain-Altagamma Worldwide Luxury Market Monitor for market-size, growth, and category data; McKinsey’s China luxury research for pre-2018 household-penetration and consumer-shift framing; IMD for the 2016–2019 Mainland CAGR figure; OECD / CEMAC for the consumer confidence index series; brand-disclosed earnings commentary (Hermès, LVMH, Kering Q1 2026 releases of April 2026; Tapestry Q3 FY26 release of May 2026; Ralph Lauren Q4 FY26 release of May 2026) for the tier-divergence figures; Re-Hub estimations for the Songmont figures; and our own work at Re-Hub / DLG for the supplementary observations on grey market dynamics and the consumer segmentation Specific figures are best read as published estimates and ranges, not as audited market data.

Nothing about how the market worked then is true now. China doesn’t evolve, it reinvents itself all the time. By the time consensus forms around what’s happening, what’s happening has already changed. Most external commentary is writing about a version of China that’s already two cycles out of date.

This newsletter is my attempt to fix that.

What I bring to this

I’ve spent eighteen years on the ground in China, almost all of it inside the luxury and fashion space. I am the Founder and CEO of Re-Hub, the leading intelligence platform for the China luxury industry, tracking 150+ brands and millions of signals across the digital ecosystem. I work with most of the leading maisons across their functional teams — strategy, marketing, commercial, ecommerce, merchandising — on the China questions they are trying to answer. What I write here draws on public signals and direct observation, not on client work. I trained as an economist before any of this, which means I tend to look at consumption stories with one eye on the underlying macro.

What that mix produces, when it works, is the ability to switch altitudes within a single piece and to see the connections most coverage misses. The same week I might be looking at:

• A Chanel pop-up activation in Shanghai and what its execution signals about the brand’s confidence in the China consumer right now

• A 24-month Birkin premium curve on China’s grey market, and what it tells us about Hermès’ actual brand desirability versus the consensus story

• Why the aspirational millennial cohort that drove the 2015–2022 supercycle hasn’t left luxury — but has stepped back hard enough to explain most of the buyer-base contraction

• How the traditional luxury hierarchy is being disrupted by Gen Z, and why local brands like Songmont and To Summer — more aligned with cultural relevance and lifestyle — are quietly taking share from Western counterparts

These aren’t separate stories. They’re the same story, read at different altitudes.

Front Row Shanghai will publish roughly twice a month. I’ll lean on data when data is the right tool, and on what I observe directly when it isn’t. What I won’t do is chase every earnings release or revisit the “China is back / China is over” cycle every quarter.

The next post is a state-of-the-market piece — what luxury consumption in China actually looks like right now, told through four shifts: who’s buying, what they want, the macro pressing on them, and who’s competing for them. Subscribe to get it when it’s out.

Max Peiro, Shanghai