Luxury brands like LVMH and Kering are facing a growing gray, or daigou, market in China, where authenticated goods bought abroad are sold at discounts up to 40% through platforms like Dewu. This market is driven by currency fluctuations and Chinese consumers’ increasing price-consciousness. In the first half of 2024, Louis Vuitton products on Dewu saw sales rise 11% to 2.6 billion RMB ($358 million), representing over 14% of its total sales in China. This gray market, making up 73% of luxury resale revenue in China, undermines profit margins and the extensive investments luxury brands have made in the region. Dewu’s impact is likened to Chinese travelers shopping abroad, particularly in Japan, where a weak yen offers cheaper prices. The platform’s rise comes amid broader challenges, with LVMH and Kering reporting significant sales declines in China, attributed to competition from parallel imports and changing consumer behaviors.