Korean media: "Selling better than Hermès", Chinese luxury brands are rising too!

On May 1, the South Korean newspaper Korea Economic Daily published an article stating that Bernard Arnault, Chairman of LVMH, drew widespread attention during his visit to China in September last year due to his unusual behavior. Instead of visiting the usual LVMH-owned stores such as Louis Vuitton and Dior in China, he chose to explore local Chinese luxury brand boutiques. After purchasing two handbags, he spent about half an hour touring the jewelry brand Lao Pu Huangjin. There, he praised the products highly, describing them as "refined and elegant."

As major players in the luxury market, Chinese consumers—driven by the surge in "guochao" (China-inspired) consumption trends—are increasingly favoring domestic luxury brands. As a result, while indigenous Chinese luxury brands have experienced explosive growth within China, traditional Western luxury brands have collectively faced a downturn. High-end outdoor brand Bosideng has rapidly expanded in China and even successfully entered Europe—the heartland of the luxury industry.

According to global luxury industry data, Lao Pu Huangjin achieved sales of 27.3 billion RMB last year, marking a 221% year-on-year increase—surpassing Hermès’ sales in China. With shifts in consumption preferences among China’s affluent class, who typically account for around 30% of total luxury spending, performance of traditional luxury brands has declined. Kering Group, parent company of Gucci, saw its global sales fall by 13% last year. During the same period, LVMH Group's operating profit dropped by 9%.

Forecasts suggest that Chinese brands may rank among the world’s top ten luxury brands within the next few years. Bain & Company analysis notes: “Chinese luxury brands are expanding their market presence and shaping a luxurious image by leveraging advanced manufacturing techniques and localized marketing strategies, all while maintaining prices lower than those of established luxury names.”

Bain also stated: “Unless Western luxury brands abandon their current authoritative positions and demonstrate innovation with localization, they will find it difficult to resist the impact of 'Chinese luxury'.”

Original source: toutiao.com/article/1863986088582409/

Disclaimer: This article represents the personal views of the author.