China signals: Benz reckoning, beauty’s recovery, and ‘becoming Chinese’ wave

The week ahead of the Spring Festival delivered a series of powerful signals about China’s evolving role in global consumption. The departure of Mercedes-Benz’s China chief and Audi models falling below 100,000 RMB ($14,474) reflect a painful reset for legacy luxury auto brands struggling to compete with domestic EV rivals. In contrast, the beauty sector shows signs of genuine recovery, with Estée Lauder and L'Oréal both reporting accelerated China growth. Anta’s Beverly Hills flagship opening signals a new phase of cultural ambition, planting its flag in Nike’s backyard. Meanwhile, the viral “becoming Chinese” trend — in which global TikTokers adopt Chinese wellness habits — underscores how Chinese lifestyle and philosophy are becoming cultural exports as powerful as any physical product. Mercedes-Benz CEO exit reveals luxury autos’ China crisis Market intel: On the eve of the Spring Festival, Mercedes-Benz abruptly announced the departure of Duan Jianjun, its long-serving China CEO, following reports of a 19% year-over-year sales drop in the Chinese market in 2025. The once-celebrated leader leaves behind a brand struggling to adapt to China's EV-dominated, digitally native landscape. This follows broader turmoil in the sector, with Audi models now selling below 100,000 RMB — price cuts that point to fundamental erosion of premium brand equity. Market indicator: The Mercedes shakeup is a stark acknowledgment that traditional luxury auto credentials no longer guarantee success in China. The rise of software-defined vehicles and domestic competitors has rewritten the rules, and legacy brands are paying the price in lost sales and depreciated brand value. For all luxury sectors, the lesson is urgent: in China’s hyper-competitive market, past glory is no shield against present irrelevance. Beauty’s holiday bounce points to cautious but real recovery Market intel: Recent earnings from L’Oréal and Estée Lauder confirm a measured recovery in China’s premium beauty market. L’Oréal’s sales in North Asia, driven by mainland China, accelerated to mid‑single‑digit growth in the second half of 2025 after a slower start to the year. Meanwhile, Estée Lauder’s organic net sales in mainland China grew 13% year‑over‑year in the quarter ended December 31, 2025. This rebound is fueled by structural factors — brands offering smaller sizes at accessible price points and consumers upgrading in niche categories — and amplified by a massive government stimulus push, with local authorities distributing billions in consumption vouchers ahead of the Spring Festival holiday. Market indicator: Beauty is leading the luxury industry’s recovery, according to Bain & Co., but the market is fundamentally different than before. Consumers are more rational, demanding genuine innovation over brand heritage. For beauty players, success requires precision: targeted price strategies, investment in R&D, and relentless localization. The government stimulus provides a short-term boost, but long-term growth depends on earning the trust of China’s increasingly discerning consumers. Anta’s U.S. flagship sets example for Chinese brands abroad Market intel: Anta opened its first directly operated U.S. flagship in Beverly Hills on February 13, attended by NBA stars Kyrie Irving and Klay Thompson. The 280-square-meter store marks a strategic departure from the distributor-led approach most Chinese brands use for Western expansion, opting instead for direct retail in one of the world’s most competitive sportswear markets. Just days earlier, Anta secured shareholder approval for its 1.5 billion euros ($1.7 billion) acquisition of a 29.06% stake in Puma — bypassing a general meeting through majority shareholder consent — positioning the Chinese company as Puma’s largest shareholder and accelerating its “multi-brand, globalization” strategy. Market indicator: Anta’s U.S. playbook is a masterclass in cultural branding. By choosing Beverly Hills — a global symbol of aspiration — and leveraging NBA star power, Anta shows that it’s competing on culture, not just price. The store’s role as a “sports lifestyle hub,” hosting community runs and basketball salons, reflects a sophisticated understanding that winning in the U.S. requires embedding in local communities. However, the stock market’s muted reaction to the opening raises a critical question: Can cultural investment translate into commercial returns, especially as Anta’s core brand faces slowing domestic growth? For other Chinese brands eyeing global expansion, Anta’s playbook offers a bold template but also a cautionary tale about the long road from flagship novelty to sustainable market presence. ‘Becoming Chinese’ trend reveals the new currency of cultural influence Market intel: A viral social media trend has millions of global TikTok users humorously declaring they are “turning Chinese” — adopting everyday habits like drinking hot water, brewing apple herbal tea, wearing slippers indoors, and practicing traditional Ba Duan Jin exercises. Unlike previous cultural appropriation debates, participants explicitly credit the “centuries of history and wisdom” behind these practices. This cultural embrace coincides with surging inbound tourism during the Spring Festival, with Trip.com reporting Russian bookings to China up 471% YoY and South Korean bookings jumping 95% YoY. Market indicator: The “becoming Chinese” phenomenon represents a profound shift: Chinese lifestyle and philosophy are becoming aspirational exports. For domestic brands, this is an unprecedented opportunity. As global consumers develop genuine curiosity about Chinese wellness, aesthetics, and daily rituals, brands that authentically embody these values can build emotional connections that transcend product categories. The trend suggests that China’s next great export may not be goods but a way of living.

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China signals: Benz reckoning, beauty’s recovery, and ‘becoming Chinese’ wave