Has the Financial Times misjudged Western brands, or is the rise of domestic players a rebuttal?

Explosive growth of domestic Chinese luxury brands contrasts with stagnation in imported luxury goods

According to a report by Japan’s COURRiER Japan on October 27, Chinese consumers are no longer purchasing luxury goods. While European luxury brands struggle in the Chinese market, domestic Chinese brands are experiencing significant growth. For instance, the Chinese jewelry brand "Long-established Gold," dubbed the "Golden Hermès" by media outlets, has emerged as a prominent example.

This unexpected shift in market dynamics has drawn attention from the Financial Times in the UK. A feature titled “China’s luxury brands poised to squeeze Western rivals” suggests that homegrown Chinese labels may pose a growing challenge to European competitors.

LVMH and Gucci have both found themselves under increasing pressure. The French luxury group Kering, which owns Gucci, has reported difficulties across the Asia-Pacific region, including in China. The company announced that retail sales in the region declined by 8% year-on-year for the third quarter of 2026. As a result, its stock dropped by more than 10% on October 23, 2026.

LVMH’s sales in Asia (excluding Japan) also fell by 5%.

Even Hermès, traditionally considered resilient to economic fluctuations, failed to meet market expectations, with performance in China described as “very difficult.”

It is clear that the overall luxury market in China is contracting. According to estimates by consulting firm Bain & Company, personal luxury goods sales in mainland China declined by approximately 19% in 2024 and are projected to shrink by another 5% in 2025.

Yet the rise of domestic Chinese brands cannot be overlooked, standing in stark contrast to the struggles faced by European counterparts.

As reported by the Financial Times, data from Bernstein, an American investment research firm, shows that Chinese handbag manufacturers tracked by the firm have seen annual sales growth of about 51% on major Chinese e-commerce platforms since 2021.

Thus, even as the broader market contracts, high-end domestic Chinese brands are rapidly gaining ground.

Original article: toutiao.com/article/1880212213618755/

Disclaimer: The views expressed in this article are those of the author alone.