8 key trends defining China’s retail in 2025

China’s retail story in 2025 was never simply “back to normal.” Top-line consumption weakened, but investment sharpened around stores, moments, and channels still capable of commanding full price — or at least full attention. On a macro level, the spending backdrop stayed fragile. China’s retail sales growth slowed to 1.3% year-on-year in November, undershooting expectations and reminding brands that the consumer recovery remains uneven. Yet beauty still showed pockets of resilience: cosmetics sales rose 6.1% year-on-year in November, even as they fell from October — a telltale sign that China’s shopping calendar has stretched into a longer “always-on” promotion season, with Double 11 deals pulled forward into early October. The result is a retail landscape that looks contradictory at first glance. Luxury groups are opening bigger, more ambitious flagships even as mid-tier brands “detox” from discount channels; fragrance houses are building immersive theaters while department store counters quietly disappear; pharmacies are turning into the next beauty battlefield; and “fan economy” tactics are moving from screens into stores. Here are the retail trends defining China in 2025 — and what they reveal about where growth is (and isn’t) coming from. Mega-flagships are back The luxury slowdown in China has not vanished. Rather, what changed in 2025 was the tone: executives began behaving as if the worst of the downturn had likely passed. LVMH, for one, lined up a rare cluster of heavyweight openings, with Louis Vuitton, Dior, Tiffany, and Loro Piana all slated to open multi-story stores in Beijing’s Taikoo Li Sanlitun in December. The group has also been in talks with Swire Properties about a new Dior store at Shanghai’s HKRI Taikoo Hui, with a launch discussed as far out as 2027 — the kind of long-horizon bet you do not make if you believe demand is structurally broken. This is not a “more doors” expansion in the old sense. It is a consolidation into fewer, larger, more controlled brand statements, built to capture VIC traffic, host events, and convert cultural heat into high-margin categories like leather goods, watches, and fine jewelry. This logic is clearest in Dior’s Beijing play. The House of Dior Beijing — a five-story flagship in Sanlitun — opened this month with top leadership presence that doubled as a signal to competitors and landlords alike: China remains strategic, but the bar for physical retail has risen. Hard luxury wins prime real estate If fashion flagships are the billboards, hard luxury is increasingly the rent stabilizer. In a softer discretionary environment, high jewelry and watches have proved more defensible — less promotion-led, more occasion-driven, and better aligned with China’s “quiet wealth” mood. That’s why moves like Buccellati upgrading into Chengdu IFS’s first-floor “golden zone” matter. In the old model, those positions were dominated by fashion houses. In 2025, landlords have been more willing to allocate the best real estate to brands that can deliver higher-ticket transactions and are less vulnerable to online discounting. This is also why the industry is seeing a wave of “re-openings” rather than pure expansion, with brands undertaking renovations, relocations, and square-meter upgrades designed to optimize productivity in proven malls. Daigou detox drives new retail approach Discount arbitrage didn’t just erode margins; it rewired consumer expectations. By 2025, more brands have accepted that they cannot premiumize while also feeding outlet volume and gray-market demand. Michael Kors offers a clear case study. Capri’s CEO John Idol described one of the brand’s most aggressive channel resets in a decade: slashing promotions, cutting daigou-fueled outlet volume, raising prices, and shifting assortments toward more fashion-forward product — all while investing in full-price retail environments, including “residential-style” stores and the Jet Set Lounge café concept. What’s notable is the metric shift. The goal is not merely traffic; it is AUR lift, owned-channel migration, and retraining consumers to accept the brand at full price — a China-specific challenge after years of outlet-led penetration. Experience becomes the new performance ad In 2025, fragrance retail leaned into a simple truth: scent is stubbornly physical. While ad inventory on Douyin and Xiaohongshu keeps getting more expensive, pop-ups offer something digital cannot replicate and often generate more organic distribution through UGC. Diptyque’s “Un Air de Paris” pop-up in Shanghai, built around photo-ready zones and participatory workshops, is emblematic of this new model. The store acts as a content engine, memory factory, and community hub, creating moments that engage visitors beyond traditional shopping. The most effective brand initiatives feel less like “campaigns” and more like cultural events. Penhaligon’s went further, debuting its first-ever global exhibition in Shanghai — not London — and layering it with scarcity mechanics, including reservation-only access, collectible takeaways, and interactive steps. This is telling: China is no longer just a market to sell into; it’s a market to premiere in, where the amplification loop is faster and the experience economy more mature. Department store counters shrink The classic beauty counter is no longer the default offline unit. The numbers are stark: NielsenIQ data shows department store beauty counters in 51 cities fell from over 15,000 in 2019 to about 9,500 in 2023. This is less about “offline dying” and more about offline being reassigned. Brands want spaces they can fully control — flagships that deliver diagnostics, services, and storytelling — while consumers increasingly prefer multi-brand retailers (Sephora, Harmay, Wow Colour) where discovery is faster and social proof is built into the environment. Pharmacies turn into China’s next beauty battleground China’s pharmacy channel is scaling with unusual speed, and local brands are playing offense. With roughly 700,000 pharmacies nationwide and rising consumer trust in “clinical” cues, efficacy skincare is moving into drugstores — not as an afterthought, but as a third strategic pillar alongside e-commerce and specialty beauty. The competitive advantage for C-beauty is execution speed: faster chain negotiations, localized claims, and O2O logistics that make replenishment feel like food delivery. For global dermocosmetics players, the challenge is structural: pharmacy credibility requires frontline education and disciplined pricing, which is hard to maintain if online promotions keep training consumers to wait for the next deal. “One-day store managers” monetize emotional value China’s fan economy is moving offline. The “one-day store manager” phenomenon — where influencers or celebrities temporarily “work” in stores to meet fans — turns retail into fandom infrastructure. It delivers explosive short-term lifts (Marubi’s reported offline bump across cities is one example), but the bigger insight is why it exists: brands are trying to manufacture belonging in a low-growth environment where functional differentiation is easy to copy. The winners will be those that can convert a spectacle into a system: membership upgrades, repeat-visit mechanics, and product narratives strong enough to outlast the idol cameo. Retail fragments into communities, from cycling clubs to outdoor specialty Beyond luxury and beauty, 2025 also showed how lifestyle categories are building retail around identity groups. Rapha’s Shanghai clubhouse format, for instance, treats the store as a community hub — not a transactional box — mirroring China’s broader shift toward interest-based consumption. Meanwhile, Li-Ning’s push into outdoor specialty reflects a market where “function” and “culture” increasingly sit together on the rack.

China retail 2025: 8 defining trends

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China retail 2025: 8 defining trends