Luxury brands plan for a China that no longer exists

I recently visited The Louis, Louis Vuitton’s cultural pavilion on Nanjing Road in Shanghai. It offers a preview of the future of retail, focused more on inspiration and relationship-building than on transaction. This doesn’t happen by accident but is the result of a deliberate, client-centric strategy. And it is the result of a brand that reads the Chinese market correctly and commits to a different operating philosophy from its peers. Louis Vuitton understands something many Western houses do not: Chinese demand has not decreased. It has moved towards experiences and brands that are able to create cultural capital. That distinction matters because a market in structural redirection calls for stronger brand propositions. Yet most Western houses are still running the same old playbook in a market that demands rapid adaptation. China’s luxury market: Contracting on paper, rewiring in practice The headline numbers look familiar. Bain reports that mainland China’s personal luxury market contracted 3% to 5% in 2025, moderating from the 17% to 19% decline of 2024. Total global luxury consumption by Chinese consumers fell 13% last year, from 75 billion euros to 65 billion euros. Many boards read those numbers as softness. Underneath, the picture is different. Bain also reports that beauty grew 4% to 7%, driven by ultra-premium skincare and fragrance. The secondhand market grew 15% to 20%. Chinese brands captured market share in beauty, jewelry, and ready-to-wear. Wealth is still growing significantly in China, and clients are spending. They are spending more than they were on the categories that offer meaning, identity, well-being, and personal transformation. They are spending less on a fifth bag, a third watch, and a fourth scarf. The luxury client redirect is real, and it is not coming back to what the market was before. Luxury autos reveal China’s competitive reset If anyone wants to see what this redirect looks like inside a single category, a great case study is luxury automotive. In 2019, during a luxury panel, I shared data that young Chinese luxury clients are shifting their preferences away from Western luxury car brands and towards Chinese brands. The data was there seven years ago, but the industry ignored it. Now reality has set in. The Maextro S800, a Huawei and JAC partnership that did not exist 18 months ago, became the bestselling vehicle in China priced above $100,000. In December 2025, it outsold the Porsche Panamera, the BMW 7 Series, and the Maybach S-Class combined. The Xiaomi SU7 Ultra, priced at roughly one-quarter of the Porsche Taycan Turbo GT, lapped the Shanghai International Circuit faster than the Taycan. Porsche China sales fell 26% in 2025, marking a fourth consecutive year of decline. Volume has more than halved from its 2021 peak. Taycan deliveries fell 22% in 2025 on top of the 49% drop the year before. Meanwhile, Mercedes-Benz China sales fell 19% last year. The combined market share of Mercedes, BMW, Audi, and Porsche in the Chinese EV segment dropped below 2% in the first quarter of 2026. Automotive is the leading indicator of what is unfolding across the rest of luxury. And if the category that is most closely related to status can completely pivot within a few years, every category can. Beauty has already moved, with domestic ultra-premium players taking share that Western incumbents had assumed was secure. Jewelry is moving fast, with Laopu Gold and Mao Geping building cultural authority that Western houses have not figured out how to compete against. Fashion will follow the same pattern. The 2026 Beijing Auto Show, which runs from April 24 to May 3, made the underlying mechanism visible to anyone walking the floor. The show is now the largest in the world, surpassing Munich’s IAA, and practically every Chinese brand stand was running real-time livestreams with influencers, building offline-to-online conversion in front of the visitors. Foreign brands were largely operating their traditional press-and-product playbook in the same hall. The contrast was striking, and the implications run far beyond cars. A test of strategy and speed This is not a story about Western luxury collectively failing. Some of the strongest brand work in the world is happening inside this market right now. The Louis is just one example. Houses that have committed to building cultural objects rather than retail flagships, that participate in Chinese cultural conversations rather than translate Western ones, and that invest at the scale a market this important deserves are finding clients and building equity that will compound over the next decade. The brands that meet that bar will be in a fundamentally different competitive position by 2030 than the ones that do not. The brands that miss it tend to share a few patterns, and this is where my guidance becomes specific. A new situation needs a new playbook, and every company is different. After conversations with several boards over the past months, the recurring failure modes are clear enough to name. China is an ecosystem of speed. Many Western companies take too long on critical decisions because their meeting cadence is not built for the Chinese market. Decision makers also remain too far from the ground. Two or three trips a year is not enough to understand what is actually happening on Xiaohongshu, inside stores in Hangzhou and Chengdu, or in the conversations that determine what a brand means to a 32-year-old client. The reality of China cannot be briefed. It has to be lived, at least episodically, by the people making the calls. The opposite pattern creates a different failure. Many companies have responded by delegating decision-making to a local entity and executing in China for China. This often produces a disconnect from what the brand means globally, including at the product level. The result is short-term optimization while brand equity erodes over multiple years. Each case needs to be analyzed individually. Strategy needs to precede action. The Western brands that will own the next decade in this market are the ones that close the distance between the boardroom and the ground without losing the coherence of what the brand stands for globally. That is harder than any of the templated playbooks make it sound. It is also the actual work. The redirect has happened. The question for every Western luxury manager is whether their strategy is built for the market that currently exists or for the one that used to. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders,” and advisor to some of the most iconic luxury brands in the world. He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts in-person masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others, Daniel holds an MBA and a Ph.D. in luxury management and has received education from Harvard Business School. Sign up for his online luxury masterclasses at the Jing Academy.

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Luxury brands plan for a China that no longer exists

How Bottega Veneta weaved China’s forever it bag