After years of frenetic expansion and record sales, the Chinese luxury market now faces more subtle and strategic challenges: hearts to seduce and wallets to reopen. Those of high-spending consumers, who in an uncertain economic environment, have stopped spending. And so, the big international groups are no longer relying on organic growth, but are focusing on personalized experiences, cultural storytelling and emotional architectures to consolidate their market share. In a country where desire has never disappeared but has changed shape, luxury is rediscovering the value of intimacy, innovation and theatricality.
Hearts to seduce and wallets to reopen
As Business of Fashion points out, LVMH, Hermès, Prada and other industry players are rewriting the rules of the game, abandoning the logic of quantitative expansion to embrace a qualitative strategy. Boutiques with private elevators, private dinners with creative directors, immersive events, and multifunctional spaces such as “The Louis” (the mammoth ship-shaped flagship store inaugurated by Louis Vuitton) have become seduction tools for an increasingly selective clientele. According to Zino Helmlinger, head of retail China at CBRE, “Executives from luxury brands are visiting Louis Vuitton’s space, taking notes. Everyone wants their own Louis. They are forced to transform, otherwise they are heading for demise”.
Experiential retail
The bet is no longer on exponential growth, but on the ability to generate value per customer and attract new consumers through memorable experiences. The Deji Plaza shopping mall in Nanjing, where Hermès, Chanel, Dior and Louis Vuitton coexist, recorded sales of 24.5 billion yuan in 2024, as it has become famous for being a laboratory of emotional and experiential retail. And while China’s market share has dropped from 33% to 22%, signs of recovery are there: “Sales in China are back positive”, said LVMH, while Hermès speaks of “a slight improvement” and L’Oréal of “positive territory”.
A new digital storytelling
But the process does not stop at physical spaces. Again as BoF points out, some brands are experimenting with pop languages and digital formats to dialogue with new generations. This is the case of Loewe, which surprised the Chinese public with a romantic mini-series on the occasion of the Qixi Festival, the local equivalent of Valentine’s Day. Five 40-second episodes, designed for mobile and set around a magpie charm, told a delicate and visually sophisticated love story. “It’s content that works as a guilty pleasure, like eating a bag of chips”, commented journalist Di Huang. “But luxury has to turn them into artisanal chips prepared with Michelin techniques: aspirational, layered, refined”.
It’s not all gold
There’s a risk: slipping into mass-market territory, as Lisa Shiqi Yu, CEO of Meyris Marketing, points out: “Some viewers wondered what the brand was trying to communicate. Some called it strange”. Yet Loewe’s ability to be daring and rely on local talent such as screenwriter Qin Wen, known for her female narratives, has allowed the brand to gain visibility and relevance in a market where storytelling is everything.
Photo from LVMH
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