Why Chanel and Cartier are still winning China's cautious consumer

For much of the past three years, the narrative surrounding China’s consumer economy has been dominated by weak property prices, sluggish confidence, and rising household savings. While confidence remains subdued and property concerns continue to weigh on household sentiment, a new survey from American investment bank TD Cowen suggests that fears of a broad consumer collapse may have been overstated. Instead, Chinese consumers are becoming increasingly selective about where they spend, prioritizing value, quality, and categories that offer either emotional reward or practical utility. The survey, conducted among 2,029 consumers across China in April, paints a picture of an economy operating at two different speeds. Manufacturing and exports continue to provide support to economic growth, while domestic consumption remains restrained by cautious household behavior and lingering uncertainty surrounding property prices and income growth. Yet despite these pressures, consumers are not retreating entirely. They are simply becoming more deliberate. The contradiction runs throughout the report. When asked how they would invest in an unexpected financial windfall, only 13 percent of respondents selected property. More respondents chose gold and precious metals (26 percent), while 31 percent preferred to keep the money in cash. Yet 76 percent reported purchasing luxury clothing or accessories within the previous month, while 65 percent purchased beauty products. The numbers suggest consumers are becoming more selective about where they place their money rather than retreating from spending altogether. Luxury spending remains concentrated around heritage brands The luxury rankings reveal a market increasingly rewarding brand strength. Among fashion houses, Chanel ranked as the most preferred luxury brand among respondents, selected by 34 percent, followed closely by Dior at 33 percent and Gucci at 31 percent. Hermès followed at 28 percent, while Louis Vuitton scored 26 percent. The results point to a continued shift toward brands with stronger perceptions of exclusivity and pricing power. Chanel, Dior, and Hermès occupy the top positions, reflecting a market where scarcity and brand equity increasingly matter more than ubiquity. The trend becomes even more pronounced among affluent consumers. Chanel rises to the top among high-income respondents, attracting 39 percent purchase consideration, ahead of Hermès at 30 percent and Armani at 30 percent. Louis Vuitton drops outside the top five in this cohort. That divide mirrors a broader development across China’s luxury sector. While aspirational luxury demand has softened, spending from established luxury consumers has proven considerably more resilient. Luxury growth is increasingly coming from fewer consumers spending more rather than more consumers entering the category. Chow Tai Fook and Cartier among preferred jewelry brands If the fashion rankings illustrate the concentration of luxury demand, the jewelry results reveal where many consumers now see value. Chow Tai Fook remains the most preferred jewelry brand overall, selected by 42 percent of respondents, followed by China Gold 41%. The Richemont-owned maison was selected by 30 percent of consumers, substantially ahead of Van Cleef & Arpels at 30 percent. The performance is particularly notable among higher-income consumers, where Cartier and Van Cleef both strengthen their positions. The findings align with broader industry observations that hard luxury has recovered more consistently than fashion over the past two years. The same report found that gold and precious metals were the second-most popular destination for an unexpected windfall, trailing only cash. Property, once the default answer for Chinese households, ranked far lower. Taken together, the results suggest consumers are increasingly gravitating toward categories perceived to retain value. That does not necessarily mean luxury products are viewed as investments in the traditional sense. It does, however, indicate that consumers continue to place a premium on products associated with craftsmanship, durability, and scarcity at a time when confidence in housing remains weak. Beauty continues to outperform broader consumption While luxury spending is becoming increasingly concentrated among affluent consumers, beauty remains one of the few premium categories attracting participation across nearly every demographic group. Eighty-seven percent of respondents reported purchasing beauty products during the previous month. Surprisingly haircare is the most purchased category over the last 30 days, reaching 53 percent of beauty buyers, followed by skincare at 51 percent and fragrance at 40 percent. The demographic breakdown highlights why beauty continues to attract investor attention. Participation reached 80 percent among consumers aged 18 to 24 and above 90 percent among those aged 25 to 34. Even in an environment characterized by elevated savings rates and cautious spending, beauty remains deeply embedded in daily consumption habits. Future spending intentions remain relatively healthy as well. Thirty-five percent of respondents expect to increase beauty spending over the next 12 months, compared with 24 percent who anticipate reducing it. For both multinational groups such as L’Oréal and Estée Lauder and domestic leaders including Proya, Mao Geping, and Judydoll, the findings reinforce why beauty continues to outperform many discretionary categories. Consumers may postpone larger purchases, but skincare, fragrance, and cosmetics remain difficult habits to abandon. Product quality matter more than geographic origins The survey also offers an interesting perspective on a question that has become increasingly relevant for global brands operating in China: Does country of origin still matter? The answer appears to be less than many assume. When asked whether they preferred products made in China or Europe, half of respondents chose neither option and instead selected the highest-quality product regardless of where it was produced. Similar results emerged when respondents compared Chinese and American products. The finding arrives at a time when geopolitical tensions have raised concerns about growing consumer nationalism. Yet the survey suggests purchasing decisions remain largely driven by product performance rather than national preference. For international luxury and beauty companies, that distinction is significant. Chinese consumers may increasingly support domestic brands in categories where local players offer competitive products, but they do not appear willing to compromise on quality simply because a product carries a domestic label. China’s recovery is becoming increasingly premium The most important takeaway from the survey may be that China’s consumer recovery is becoming more concentrated rather than more widespread. Higher-income households remain more optimistic about their financial prospects, more likely to purchase luxury goods, and more willing to increase discretionary spending over the next year. Lower-income consumers continue to prioritize savings and remain more cautious toward non-essential purchases. That divergence helps explain why categories such as luxury, beauty, jewelry, and premium personal care continue to outperform broader consumption indicators. The consumer most responsible for driving growth today is not necessarily spending more overall. They are simply directing a larger share of their wallet toward fewer categories and fewer brands.

Why Chanel and Cartier are still winning China’s cautious consumers

How Bottega Veneta weaved China’s forever it bag

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Why Chanel and Cartier are still winning China’s cautious consumers

How Bottega Veneta weaved China’s forever it bag