A surprising market emerges for luxury brands in China

[Louis Vuitton store at Shanghai Hongqiao International Airport]
Robert Way

Luxury brands selling in China are charting new paths to reach consumers as the nation faces slowing growth, weak demand, and potential prolonged deflation. At the Business of Luxury Summit in Hong Kong hosted by Nikkei Asia and FT, speakers described a luxury market adapting to deep structural and generational changes. Notably, China's GDP growth slipped to 4.8% in the third quarter, its slowest in a year, with economists warning that a deflationary mindset and property slump are eroding household wealth and consumer confidence.

Louis Vuitton's ship-shaped concept store in Shanghai was said to dramatically showcase how global brands are leaning on experiential strategies. Derek Sulger, founder of Lunar Capital and owner of Shanghai Tang, said the hospitality venture at "The Louis" is attracting affluent tourists and business owners from provinces such as Jiangsu and Hainan rather than local Shanghainese shoppers in a sign of how luxury spending is increasingly dispersed across regions.

Panelists at the luxury summit acknowledged that despite economic headwinds, China's appetite for premium goods still endures, particularly in lower-tier cities. Olivia Plotnick of Wai Social noted surprising vibrancy in cities such as Shantou, where foot traffic in upscale malls remains strong even amid tepid GDP growth. She emphasized that younger consumers in these markets are first encountering luxury through Chinese brands, unlike previous generations who associated it primarily with foreign names. Analysts noted that the theme of lower-tier cities supporting luxury spending in China is relatively new, and surprising to a degree.

Other panelists highlighted that the consumption slowdown in China is psychological, not structural, noting that "the money is still there."

Companies impacted by the luxury trends in China include LVMH (OTCPK:LVMHF [https://seekingalpha.com/symbol/LVMHF]), Kering Group (OTCPK:PPRUF [https://seekingalpha.com/symbol/PPRUF]), Tapestry (NYSE:TPR [https://seekingalpha.com/symbol/TPR]), Capri Holdings (NYSE:CPRI [https://seekingalpha.com/symbol/CPRI]), Estee Lauder (NYSE:EL [https://seekingalpha.com/symbol/EL]), Ralph Lauren (NYSE:RL [https://seekingalpha.com/symbol/RL]), Burberry (OTCPK:BURBY [https://seekingalpha.com/symbol/BURBY]), Hermès (OTCPK:HESAY [https://seekingalpha.com/symbol/HESAY]) (OTCPK:HESAF [https://seekingalpha.com/symbol/HESAF]), Chanel, Richemont (OTCPK:CFRHF [https://seekingalpha.com/symbol/CFRHF]) (OTCPK:CFRUY [https://seekingalpha.com/symbol/CFRUY]), Swatch (OTCPK:SWGAY [https://seekingalpha.com/symbol/SWGAY]) (OTCPK:SWGAF [https://seekingalpha.com/symbol/SWGAF]), Chow Tai Fook (OTCPK:CJEWF [https://seekingalpha.com/symbol/CJEWF]) (OTCPK:CJEWY [https://seekingalpha.com/symbol/CJEWY]), Prada (OTCPK:PRDSY [https://seekingalpha.com/symbol/PRDSY]) (OTCPK:PRDSY [https://seekingalpha.com/symbol/PRDSY]), Chow Sang Sang (OTCPK:CHOWF [https://seekingalpha.com/symbol/CHOWF]), and Hugo Boss (OTCPK:BOSSY [https://seekingalpha.com/symbol/BOSSY]).

Related ETFs include the Global X MSCI China Consumer Discretionary ETF (NYSEARCA:CHIQ [https://seekingalpha.com/symbol/CHIQ]), Kraneshares Global Luxury Index ETF (NYSEARCA:KLXY [https://seekingalpha.com/symbol/KLXY]), and Tema Luxury ETF (NYSEARCA:LUX [https://seekingalpha.com/symbol/LUX]).

MORE ON CHINA LUXURY SPENDING

* LVMH: Why I'm Cautiously Optimistic [https://seekingalpha.com/article/4831161-lvmh-why-im-cautiously-optimistic]
* Richemont: Turning More Constructive Into Q3 With Quality Growth Ahead (Rating Upgrade) [https://seekingalpha.com/article/4831107-richemont-turning-more-constructive-into-q3-with-quality-growth-ahead-rating-upgrade]
* LVMH Moët Hennessy - Louis Vuitton, Société Européenne (LV:CA) Q3 2025 Sales Call Transcript [https://seekingalpha.com/article/4829920-lvmh-moet-hennessy-louis-vuitton-societe-europeenne-lv-ca-q3-2025-sales-call-transcript]
* U.S. tariff hits Swiss watch exports in September [https://seekingalpha.com/news/4505805-us-tariff-hits-swiss-watch-exports-in-september]
* Asia stocks surge on easing US-China tensions; Takaichi PM prospects fuel Japan rally [https://seekingalpha.com/news/4505795-asia-stocks-surge-on-easing-us-china-tensions-takaichi-pm-prospects-fuel-japan-rally]