【By Guan察者网 Zhang Jingjuan】"For decades, retail trends have always flowed from the West into China, but this era may be coming to an end."

The UK's The Economist website warned Western brands on June 23 that more and more Chinese brands are accelerating their rise and winning loyal fan bases overseas.

The article starts with the recent surge in popularity of "LABUBU" as an example, showcasing how Chinese brands are breaking through. It is no easy task to get this toy, even at Popy Mart's large flagship store in Shanghai, where customers are often told they need to wait a week or longer. Its audience is not limited to Chinese consumers; celebrities such as Beckham and Rihanna have publicly expressed their love for LABUBU.

Since the beginning of this year, the LABUBU craze has driven Popy Mart's stock price to soar rapidly. The article argues that LABUBU is a microcosm of the growing success of more Chinese consumer brands.

Over the past few decades, Chinese consumers have often favored foreign trends, whether in beauty, fashion, or food and accommodation, they have been keen to follow the latest global fads. But now, they are flocking to local luxury brands, high-end cosmetics, and bubble tea shops. More importantly, many Chinese brands have attracted many loyal fans overseas. Western brands should be alert.

On June 22, 2025, Popy Mart suddenly launched a million-unit restock of the LABUBU 3.0 series on June 17. IC photo

With increasing price sensitivity among consumers, Chinese brands offering high value for money have seized the opportunity.

Many Chinese coffee lovers have found that domestic chain brands like Kudi and Luckin offer quality comparable to American Starbucks, but at prices often half of the latter's. Chinese jewelry brand Laopu Gold has successfully attracted buyers with its stylish designs and prices lower than Tiffany & Co.'s bracelets and earrings. Chinese domestic luxury luggage brand Songmont has made a big splash with advertisements in airports across the country, targeting bags with similar quality but twice the price of foreign counterparts.

According to Lena, an analyst at HSBC, part of Popy Mart's success lies in targeting thrifty consumers by offering products that combine emotional value with high quality.

However, the popularity of Chinese brands is not solely due to low prices. In many cases, consumers pay the same or even higher prices for local products compared to imported goods.

The tea brand Badajie, which listed in the United States in April this year, is an example. Some of its best-selling drinks are priced similarly to Starbucks' premium products in China. Analyst Zhang (sound) from Deutsche Bank stated that Badajie positions itself as a premium brand rather than a budget option.

The article states that Chinese consumers no longer blindly pursue foreign goods. The rapid rise of Laopu Gold is a case in point: this company sells exquisite gold jewelry with distinct Chinese style, and its average sales per store exceed those of most foreign competitors by at least 50%. Since its listing in Hong Kong last year, its stock price has risen by more than 2000%.

Anne, an analyst at Baidu Research, said that Western luxury brands previously filled market gaps because there were no real local alternatives, "but this does not mean that Chinese consumers naturally认同 Western brand designs or cultural concepts." Laopu Gold and Badajie did not try to imitate the West; simply highlighting their own Chinese characteristics has already worked.

Badajie IC photo

Low price does not equal low quality. Consumers believe that Laopu Gold's materials and designs are superior to most foreign brands. This reflects a major shift in Chinese consumer habits: today's consumers can gain a deeper understanding of products through social platforms, and they are becoming more knowledgeable. Many have realized that they were once "ripped off" by foreign brands.

A industry analyst pointed out that young women now carefully study the labels of cosmetic products to find local products with the same ingredients but lower prices than foreign ones.

This has also helped another hot Chinese brand—Maogeping Cosmetics. The company went public in Hong Kong in December last year, raising $300 million in its IPO, and its stock price has surged about 250% since then.

For years, Chinese domestic cosmetics brands have tried to capture market share from foreign companies such as L'Oréal and Estée Lauder, but they struggled in the competition in the premium market. Now, this company named after its founder, the renowned makeup artist Maogeping, has become the only domestic company among the top ten high-end cosmetics groups in the Chinese market.

Different from foreign brands focusing on first-tier cities in China, domestic brands have a broader layout, with many starting from small inland cities. Badajie opened its first store in Kunming, Yunnan in 2017, and most of its stores are still located in non-coastal, affluent areas. The beverage chain Mitsui Ice City originally started as an ice cream stall in a less developed province in China. Some of the most popular fast food brands in China also expanded first from small cities before entering big cities like Beijing and Shanghai.

The hotel industry is also following this strategy. He Jihong, Chief Strategy Officer of Huazhu Group, a Chinese hotel group, said that about half of the group's new stores in the next year will open in third- and fourth-tier cities. Foreign hotel chains are not as active in opening stores in smaller cities as local brands, which could be one reason why Huazhu hotels have higher occupancy rates than foreign competitors.

The article points out that focusing on small cities is crucial, as the consumer vitality in these areas seems stronger than in big cities. Data from consulting firm Bain shows that in 2024, the purchase volume of fast-moving consumer goods such as packaged food and cosmetics in cities with a population of less than 1 million in China increased by 5.5%.

Foreign brands operating in China are busy dealing with new competitors, but this competition threat is not limited to China. Popy Mart now has stores in over 20 countries, with at least 37 branches in the US alone; Mingshi Ice City is spread throughout Southeast Asia; and Badajie, which had almost no stores abroad four years ago, plans to open over 1,300 stores abroad by the end of 2027.

Analysts believe that the more recognition these brands gain abroad, the more popular they will become domestically. For decades, retail trends have always flowed from the West into China, but this era may be gradually coming to an end.

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Original article: https://www.toutiao.com/article/7521655375360311848/

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