China signals: Laopu’s downturn, L’Oréal’s lawsuit, Levi’s backlash, Rolex’s scandal

The conditions that lifted brands in China — rising prices, platform scale, provocative marketing, the pull of scarcity — are now the ones testing them. Four cases this week make the point. Laopu Gold’s market value has collapsed by more than HK$100 billion ($12.75 billion) as falling gold prices and strategic missteps erode its position. L’Oréal China filed a landmark trademark infringement lawsuit against Alibaba’s Freshippo, in what is described as the first such action to target a retail platform and its core operating entities together. Levi’s drew a backlash over a Father’s Day poster — a close-up of a denim-clad backside paired with a “gift for fatherly love” tagline — that critics called out of step with the occasion. Rolex’s Shanghai exhibition was overshadowed by claims that the brand hired paid extras to fill the venue, jarring against an image built on prestige and scarcity. Laopu’s massive wipeout Market intel: Laopu Gold’s market value has collapsed by more than HK$100 billion HKD ($12.85 billion), with shares down 54% from their July 2025 peak. The brand rode 2025’s gold rally to 27.3 billion RMB ($3.77 billion) in revenue, but 2026 brought a reversal. Gold prices have fallen 25% from their highs, and Laopu’s counter-cyclical price hikes — including a February increase of more than 20% on some items — have alienated price-sensitive shoppers. The brand now commands a 55% premium over traditional jewelers, and inventory has ballooned to 16 billion RMB ($2.21 billion). Competitors including Jemper and Lamchiu are replicating its heritage-gold playbook, eroding that edge. Analysts are split: Citi is bearish, while JPMorgan argues the market underestimates Laopu's efforts to manage gold-price volatility. Market indicator: The collapse exposes the fragility of China’s would-be luxury brands. The fixed-price model that worked while gold climbed — charging premiums for design and craftsmanship — has become a liability in a falling market. The deeper challenge is building brand identity beyond craft: Laopu’s 37.6% gross margin trails Richemont’s 60%-70%, and its very important client (VIC) base remains small. This stretch will determine whether Laopu evolves into a genuine global luxury house or remains a beneficiary of favorable market conditions. L’Oréal’s Freshippo lawsuit Market intel: L'Oréal China has filed a trademark infringement lawsuit against four Freshippo-affiliated companies, with the trial set for July 22, 2026 at the Shanghai Pudong New Area People’s Court. According to Yu Yibai, a lawyer at Beijing Weiheng (Chengdu), it is the first time a leading beauty brand has named a new retail platform and all its core operating entities as co-defendants in a single trademark case in China. The suit follows repeated counterfeit complaints at Freshippo stores: a case that surfaced in March 2024 led to the conviction of three suppliers who had funneled fake L’Oréal and Estée Lauder products worth more than 3.2 million RMB ($441,000) through the platform. It echoes Estée Lauder’s February 2026 suit against Walmart, and points to a broader shift — beauty brands moving from small-time sellers to the platforms themselves. Market indicator: The suit could set a precedent for platform liability in China. Legal experts note that Freshippo may invoke a “lawful source defense,” but documenting proper sourcing and a lack of awareness of infringement will be hard to sustain given L’Oréal's controlled distribution and the below-market prices on the platform. A win for L’Oréal would pressure Freshippo and other retailers to overhaul how they vet suppliers. For beauty brands, the tolerance once extended to counterfeits moving through third-party supply chains is running out. Levi’s Father’s Day misfire Market intel: Levi’s ran into criticism over a Father’s Day poster built around a close-up of a denim-clad backside, captioned “gift for fatherly love.” Much of the reaction questioned what the image had to do with the occasion, and whether the shorts shown were a women’s product — several users said they were, having first read the shot as male.The brand quietly pulled the poster from its Tmall store but has stayed silent, with no apology or explanation. Market indicator: Backlash like this exposes the gap between Levi’s rebel positioning and the sentiment a holiday like Father’s Day carries. The campaign read as provocation grafted onto an occasion that calls for warmth, and the disconnect did the rest. Holiday marketing in China leaves little room for that kind of miscalculation, particularly when the imagery reads as off-key on gender. The episode is less about one poster than about how readily a heritage brand’s identity can collide with the emotional contract of a family holiday. Rolex’s paid crowd storm Market intel: Rolex’s “Oyster Story” exhibition in Shanghai has been overshadowed by claims that the brand hired thousands of paid extras to pose as visitors. Posts on social media alleged that around 3,000 people were recruited through agencies at 55 RMB to 75 RMB ($8 to $10) a visit; Rolex did not respond to reporters’ requests for comment. People close to the China team said headquarters had set an 80,000-visitor target for the run — more than 4,000 a day across its 19 days — though Rolex did not confirm the figure. The episode lands against real strain in the resale market, where the green Submariner has dropped more than 40% from its peak. Rolex’s mainland retail footprint has shrunk about 55% since 2014, from 147 points to roughly 66. The brand still leads the Swiss watch industry on an estimated 33% share, by Morgan Stanley and LuxeConsult’s count, even as that industry’s exports decline for a second straight year. Market indicator: A paid-crowd allegation cuts directly against the scarcity Rolex has spent decades cultivating — the sense that the watches are sought rather than sold. Chasing a steep visitor target points to the pressure underneath: a resale market under pressure, a contracting retail base and softening demand across the high end. The reputational exposure is the real cost here; manufactured turnout, if that is what it was, undercuts the very rarity the brand trades on. Staying silent leaves the read open, and for a house whose value rests on appearing effortless, looking anxious is its own kind of damage.

China signals: Laopu’s downturn, L’Oréal’s lawsuit, Levi’s backlash, Rolex’s scandal

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China signals: Laopu’s downturn, L’Oréal’s lawsuit, Levi’s backlash, Rolex’s scandal

How Bottega Veneta weaved China’s forever it bag