Once a rarefied pursuit of the few, luxury in China is undergoing a subtle but profound transformation. Over the past two decades, global luxury brands from Burberry to Bottega Veneta have raced to establish themselves in the world’s second-largest economy. The assumption was simple: as China’s middle class expanded, so too would demand for high-end goods. But this narrative is shifting.

Today, luxury in China is no longer defined by price tags or foreign logos alone. It is increasingly shaped by access, values, and evolving consumer identities. British brands hoping to capture or retain market share must understand not only the changing economic landscape but also how Chinese consumers are redefining what luxury means.

Luxury beyond the logo

The early 2010s saw luxury sales in China surge, fuelled by a growing cohort of affluent urban consumers. This gave rise to what was sometimes caricatured as logo-driven consumption: high-profile purchases of recognisable Western labels, often as status symbols. Yet over time, Chinese consumers have become more discerning. They are better travelled, more digitally connected, and more brand-savvy. This, says Meimei Zhao, Founder of intercultural branding agency Variety Plus, reflects a natural evolution.

“The very definition of luxury means it will never become a mass-market product simply because of the rise of a particular consumer class in any one market,” Zhao explains. “About a decade ago, China was indeed seen as a fiercely contested market for luxury brands. But I believe that was more a reflection of a particular stage in China’s economic development, rather than a sign of permanent mass adoption.”

Today’s Chinese consumers increasingly reject the notion of luxury as ostentation. Instead, they seek authenticity, craftsmanship and cultural meaning. That doesn’t mean the appetite for premium products is waning. Rather, it is being expressed differently, with a focus on quality, story, and personalised experience.

This shift has prompted commentators to describe China as “democratising luxury” not in the sense of making it cheap or ubiquitous, but by expanding who luxury is for, and how it is understood. It also reflects a generational change. Younger consumers, especially Gen Z and post-95s, are less interested in traditional luxury status symbols and more drawn to lifestyle values, sustainability and self-expression.

The rise of “accessible luxury”

Global consultancy Bain & Company has tracked this evolution. According to its 2023 China Luxury Report, while luxury spending in China is set to recover after the pandemic, it will be driven less by conspicuous consumption and more by niche, lifestyle-led preferences. Domestic and lesser-known brands have started gaining traction, and international labels must now compete not only on prestige but on values.

This has led to the rise of “accessible luxury”, products that maintain high standards of quality and design but are not priced out of reach for upper-middle-class consumers. Examples include the success of brands like Coach and Longchamp, or the recent popularity of niche fragrance brands such as Le Labo and Jo Malone.

The trend also plays out online. Social commerce platforms like Xiaohongshu and livestreaming on Taobao have enabled more consumers to engage with luxury in a personal and interactive way. Rather than gatekeeping the luxury experience, these channels offer consumers the tools to explore, compare and curate their own tastes—further democratising the sector.

Opportunity meets complexity

But for foreign brands, this democratisation brings both opportunity and challenge. Yang Ding, Founder of New Silk Route Digital, which promotes British brands in China, warns that the playing field is more competitive than ever.

“This trend creates a vast new customer base, but also fierce competition,” he says. “British brands must lean into their core strengths — heritage, quality, and brand narrative — rather than joining a race to the bottom on pricing. They should not only think about the current opportunity, but build their relevance for China’s future generations.”

This relevance may lie in a brand’s backstory. British luxury is often defined by legacy and craftsmanship — values that resonate strongly with Chinese consumers when told well. For instance, Fortnum & Mason’s tea traditions or Barbour’s waxed jackets carry cultural weight that extends beyond the product itself. When communicated through the right channels — via influencers, livestreams, and curated experiences — such stories can offer a unique appeal in a crowded market.

Zhao agrees. “As Chinese consumers become more experienced and sophisticated in their approach to luxury, they’re also becoming more rational and better able to appreciate truly great products,” she says. “In this context, many British heritage brands with long histories — some over a hundred years — continue to thrive and are still highly valued by Chinese consumers.”

Post-pandemic shifts

The COVID-19 pandemic further accelerated this shift in consumer mindset. With outbound tourism largely halted between 2020 and 2023, domestic consumption became more important than ever. Luxury brands responded by investing heavily in their China presence: launching local boutiques, hiring Mandarin-speaking staff, and developing country-specific campaigns.

But even as international travel resumes, Chinese consumers are not simply reverting to pre-pandemic behaviours. There’s greater expectation for localisation, tailored storytelling, and omnichannel experiences. From store design to digital presence, brands are expected to understand local tastes, engage in culturally relevant ways, and demonstrate a long-term commitment to the market.

At the same time, macroeconomic headwinds are tempering spending. According to the IMF, China’s GDP growth is expected to moderate to around 4.6% in 2025, reflecting property sector woes and subdued global demand. Consumers, especially younger ones, are more cautious with their money, making value for money — and emotional connection — more critical than ever.

What British brands should do next?

So, how should British luxury brands respond? First, don’t assume old rules apply. Price alone does not define luxury in China. Nor does mere foreignness guarantee desirability. Instead, invest in cultural literacy. Understand the values that matter to today’s Chinese consumers: identity, well-being and individuality.

Second, tell your story well. Whether it’s a 19th-century craftsman’s technique or a Queen’s warrant, heritage must be made emotionally resonant. Chinese consumers respond to authenticity but it must be made relevant, not just historical.

Third, go digital but do it smartly. Partnering with the right influencers (KOLs) or livestreamers can amplify your message, but the choice must align with your brand’s tone and values. Be ready to localise not just the language, but the messaging.

Finally, think long term. As Yang Ding puts it, the key is to “build your relevance for China’s future generations.” That means resisting the urge to over-expand or chase short-term returns. Instead, focus on brand consistency, community building, and cross-generational engagement.

A shifting but enduring allure

China may be democratising luxury but it is not diluting it. If anything, the market is becoming more discerning. The opportunity for British brands lies not in mass appeal, but in meaningful connection. Those who adapt with integrity, by staying true to their heritage while embracing local innovation, can thrive in this complex, fast-moving landscape.

In doing so, they may find that their definition of luxury evolves too, not just as a product, but as an experience, a feeling, and a relationship that grows across borders and generations.

Join CBBC’s China Consumer 2025 to learn more about the luxury and retail sector in China

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The luxury home interiors market in China is experiencing a remarkable renaissance, fuelled by the country’s growing cohort of high-net-worth individuals (HNWIs), those with investable assets exceeding £800,000. As China’s affluent class expands, their appetite for bespoke home decor, premium soft furnishings, and exclusive interior design solutions is reshaping the global luxury landscape. British brands, renowned for their craftsmanship, heritage, and timeless elegance, are ideally positioned to capitalise on this burgeoning demand.

The Rise of China’s Affluent Homeowners

China’s economic transformation has created a new elite, with the 2023 Hurun China Rich List reporting over 1.3 million HNWIs, second only to the United States. These individuals, entrepreneurs, tech magnates, and heirs, are not only amassing wealth but also redefining luxury living. The Knight Frank Wealth Report 2024 notes that Chinese HNWIs allocated 40% of their discretionary spending to lifestyle investments, including high-end home interiors, in 2023, outpacing their global peers. This trend is particularly evident in Tier 1 cities like Shanghai, Beijing and Shenzhen, where sprawling villas and penthouses serve as canvases for opulent design.

Unlike Western HNWIs, who may prioritise minimalism or sustainability, Chinese HNWIs view their homes as statements of status and success. Bespoke furniture, luxurious soft furnishings and intricate interior designs are coveted symbols of prestige. British brands, with their legacy of craftsmanship, are well-placed to meet this demand. For instance, The Financial Times reported that British luxury furniture brand Fendi Casa saw a 28% sales increase in China last year, driven by demand for its exclusive collections. Similarly, Savoir Beds, a UK-based luxury bedmaker, noted a 20% surge in orders from Chinese HNWIs. These successes highlight the potential for British firms in China’s luxury interiors market.

Understanding the Chinese HNWI Homeowner

To succeed, British brands must grasp the unique preferences of Chinese HNWIs when it comes to home interiors. This demographic, typically aged 30 to 45, is younger and more digitally savvy than their Western counterparts. A 2023 McKinsey report found that 75% of luxury home decor purchases by Chinese HNWIs are influenced by online platforms like WeChat, Douyin, and Xiaohongshu, where aspirational lifestyles are showcased. These platforms are critical for discovering trends and building brand loyalty.

Exclusivity is paramount. Chinese HNWIs seek one-of-a-kind pieces that reflect their status, from handcrafted furniture to bespoke soft furnishings. British brands like Designers Guild, known for vibrant fabrics and wallpapers, have gained traction by offering custom designs tailored to Chinese aesthetics, such as intricate floral patterns inspired by traditional art. Similarly, The South China Morning Post reported that luxury wallpaper brand de Gournay saw a 25% sales uptick in China, driven by demand for hand-painted chinoiserie designs among affluent homeowners.

While sustainability is secondary to exclusivity, it is gaining relevance among younger HNWIs. A Forbes report noted that 42% of Chinese HNWIs under 40 consider eco-friendly materials a factor in their home decor choices. British brands like The Rug Company, which uses sustainable wool and silk, are resonating with this demographic by blending ethical sourcing with high-end craftsmanship. This convergence of luxury and sustainability offers UK firms a chance to differentiate themselves.

Opportunities for British Luxury Interiors Brands

The Chinese HNWI market presents a wealth of opportunities for British brands specialising in luxury home interiors, soft furnishings, and decor. The UK’s £48 billion luxury sector is synonymous with quality and heritage, making it a natural fit for China’s affluent homeowners. Below are key strategies to seize this opportunity.

1. Leverage Digital Platforms

Chinese HNWIs rely heavily on digital platforms for inspiration and purchases. Collaborating with key opinion leaders (KOLs) on Douyin or Xiaohongshu can amplify brand visibility. For example, British fabric brand GP & J Baker partnered with Chinese influencers in 2023, driving a 22% increase in online sales. Immersive digital campaigns, such as virtual showroom tours or 3D renderings of bespoke interiors, can showcase British craftsmanship to tech-savvy consumers.

2. Localise Designs

While British heritage is a key selling point, localisation is essential. Chinese HNWIs favour designs that blend global sophistication with cultural resonance. Brands like Colefax and Fowler have succeeded by incorporating Chinese motifs, such as lotus patterns or jade-inspired colour palettes, into their fabrics and wallpapers. Similarly, The Drinks Business highlighted how British luxury chandelier maker Vaughan introduced China-exclusive lighting collections, blending Art Deco influences with oriental aesthetics, which became highly sought-after by HNWIs.

3. Offer Bespoke and Experiential Solutions

Exclusivity extends beyond products to experiences. Chinese HNWIs value personalised services, such as in-home consultations or custom furniture design. British interior design firm David Linley has seen success by offering bespoke furniture crafted in its UK workshops, with a 15% rise in Chinese orders in 2024, according to Retail Gazette. Brands can further differentiate by hosting exclusive events, such as private showroom unveilings or design workshops in China’s major cities.

4. Establish a Physical Presence

Physical showrooms remain crucial for building trust and showcasing craftsmanship. Flagship stores in Shanghai or Beijing allow HNWIs to experience textures, materials, and designs firsthand. Fendi Casa’s Shanghai showroom, opened in 2023, has become a hub for affluent homeowners, generating significant buzz. British brands could consider strategic partnerships with local retailers or invest in flagship stores to enhance their market presence.

5. Navigate Cultural and Regulatory Challenges

China’s luxury market poses challenges, including import tariffs and cultural sensitivities. Missteps can harm brand reputation, as seen in past boycotts of foreign firms. British brands must work with local partners to ensure compliance and cultural alignment, tailoring designs to respect Chinese traditions while maintaining their signature style.

Challenges and Considerations

Despite the opportunities, challenges remain. Economic volatility in China, such as fluctuations in the property market, can impact HNWI spending on home interiors. Competition from European brands like Roche Bobois and Minotti is intense, with these firms also targeting China’s affluent homeowners. However, the UK’s unique blend of heritage and craftsmanship provides a competitive edge, particularly for brands offering bespoke, high-value solutions.

The Path Forward

China’s HNWI market is a vibrant opportunity for British luxury home interiors brands. With their focus on craftsmanship and exclusivity, UK firms like Fendi Casa, Savoir Beds, and de Gournay are already making inroads, as evidenced by their strong sales growth. By leveraging digital platforms, localising designs, offering bespoke experiences, and establishing physical showrooms, British brands can capture the imagination of China’s affluent homeowners.

As China’s wealth continues to grow, its HNWIs are not just decorating homes but crafting legacies. For British brands, this is a chance to blend their storied heritage with the aspirations of a new elite, securing a lasting foothold in a market that promises both prestige and profit. The time to transform China’s luxury interiors landscape is now.

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Paul French caught up with Amanda Sikarskie, one of the authors (along with Peng Liu and Lan Lan) of the new book Male Idols and Branding in Chinese Luxury (Bloomsbury Academic, 2024).

Can you briefly explain to us the male idol phenomenon in China – how is it different to traditional male celebrity icons?

The word ‘idol’ comes from the Japanese ‘aidoru,’ which is simply a borrowing of the English word idol to refer to a celebrity or star. We might trace idol culture back to 1960s Japan and Japanese artists like Kyu Sakamato (Kyu-chan) – gaining popularity in the Western market with hits like “Sukiyaki” – and notice that fans called him Kyu-chan, rather than Kyu-san, likening him to a child. So there’s this decades-old tradition of making idols less masculine, first by rendering them childlike and later through both infantilisation and feminisation. This idol culture really began to take hold in South Korea and China in the 1990s (and a bit earlier in Hong Kong). 

Over time, the look of a male idol has become somewhat standardised across East Asia, usually quite thin and about 180 centimetres tall (this is also the height of many Western female fashion models and makes male idols ideally suited for modelling women’s luxury fashion), and with a v-line, rather than square, jaw (which some are born with, but can also be achieved through jawline botox or “K-pop surgery”).

Can you explain why these male idols seem to be so effective at shifting products – huge amounts of products – in China?

We are seeing a phenomenon in which women consumers are more interested in wearing the goods advertised by their male idols than by female idols, even when it comes to traditionally feminine products such as handbags and cosmetics.

Who are the fans of these male idols? And can toxic behaviour and inappropriate online behaviour damage the male idol brand ambassadors?

I wouldn’t say that there’s one monolithic demographic of idol fans. Fans might be anywhere from elementary school age to in their 60s, although teens to people in their 30s seem to be the most common. What young fans want and expect from their idols is different than what middle-aged fans (who generally have their own partners and families) are looking for. 

I think it’s a big mistake to assume that these parasocial relationships between idols and their fans are naturally toxic. The vast majority of idol fandom is actually pretty well-adjusted. Where we do see this toxicity is when groups of fans with different agendas choose to butt heads, such as Wang Yibo solo fans versus Xiao Zhan solo fans or solo fans versus shipper fans (fans that imagine a relationship between two idols). Negative posts, generally in the form of fake news, made by one idol’s group of fans against another idol can potentially be damaging to both idols’ reputations, but this sort of online disinformation is so common within these little insular communities of fans that I think most people generally take what they post with a large grain of salt. 

What are some of the major pitfalls for brands working with male idols in China?

Besides online turf wars between groups of solo fans or solo fans and shipper fans, brands also need to keep in mind that idols can make mistakes. These could be small mistakes that nonetheless affect the idol-brand relationship, like an ambassador for Redmi using an iPhone or Samsung phone in public. Or, an idol could make a very large mistake leading to them being “cancelled” in the mediasphere, like committing a crime. This would also generally lead to the termination of the brand’s partnership with the ambassador, of course. Because of these potential pitfalls, brands may increasingly turn to virtual idols in the future. While not as compelling as human beings, a virtual idol obviously cannot make these sorts of blunders.

How do the Chinese versions of male idols differ (or mimic) those we may be more familiar with in Japan and South Korea?

Chinese idols initially were sort of modelled on Korean idols (commonly known in online culture as ‘little fresh meats’ or xiǎoxiānròu in Chinese) and some of the most famous male Chinese idols of the 2000s and 2010s, Han Geng (Super Junior), Lay (EXO), Jackson Wang (GOT7), and Wang Yibo (UNIQ), all trained in Korea and debuted in Korean idol groups before moving back to China later. Since about 2018, the idea of Korean idols perpetuating a “sissy” niang pao aesthetic has gained traction in China, though. And so now, compared to the 2010s, you won’t see an idol like Wang Yibo wearing nearly as much makeup, especially eye makeup, as he used to. He’s still a brand ambassador for Japanese cosmetics staple Shu Uemura, though, because, as I noted earlier, male idols are just really efficient in marketing products to female consumers.

The Beijing government has seemed a little concerned with the rise of the male idol. How has the clash between male idol style and government ideas about masculinity and gender played out?

The idea of “sissy men” or niang pao (or alternately ‘luxury pig men’ — jing zhu nan — in Chinese) has gained currency largely because of Beijing. So, on the one hand, we see the state decrying men who aren’t manly, but on the other hand, we still see these idols not only all over billboards and red carpets in China, but on shows like holiday specials on CCTV as well. So, despite the bluster, it seems more or less that the government is tolerating male idols, at least for now. They are effective economic engines, after all, as contemporary, financially independent women tend to gravitate towards them.  

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For several years now, China has been seen as the main driver of growth for the luxury goods industry. But recent sales figures from both luxury groups and independent brands indicate that Chinese shoppers are reining in their spending amid economic uncertainty.

Two of the world’s largest luxury groups, Kering and LVMH, reported falling revenue in the first half of 2024, with LVMH’s sales in the Asian market falling by 14% in Q2 2024. Earlier in July 2024, Burberry ousted CEO Jonathan Akeroyd after its financial figures reported sales in China falling 20%. Richemont, Hugo Boss and Swatch Group also all reported falling sales.

These troubles in the luxury market come as the latest economic data showed China’s economy growing 4.7% in Q2 2024, down from 5.3% in Q1 2024 to the lowest since Q1 2023. This faltering has been partly attributed to the country’s prolonged property crisis, which has certainly spooked the kind of aspirational buyers that have traditionally driven luxury sales in China.

Nevertheless, things aren’t all doom and gloom. Hermès bucked the trend, reporting a 7% uptick in sales revenue for Asia (excluding Japan), and while it saw a decline in foot traffic in its stores in China, sales there held relatively steady compared with last year.

Hermès’ results show that the top, top end of the luxury market is holding strong, as recession resistant ultra-high-net-worth individuals continue to make major purchases. The ‘quieter’ branding of Hermès and other ultra-luxury brands appeals to UHNW Chinese consumers keen to avoid ostentatious displays of wealth in troubled economic times. Earlier in 2024, Chinese censors shut down the Douyin accounts of some Chinese influencers known for flaunting their luxurious lifestyles.

Another area that shows some light at the end of the tunnel for luxury brands in China is outbound travel. LVMH said that poor sales in China were ironically being balanced by “substantial growth” in Japan driven by Chinese tourists, and both LVMH and Kering reported high numbers of Chinese tourists visiting their stores in Europe.

Going forward, luxury brands in China may have to choose between keeping prices high to maintain an aura of exclusivity that appeals to UHNW individuals and reducing prices to recapture the attention of aspirational consumers. Burberry has tried the latter, offering average reductions of 50% across all distribution channels in China so far in 2024 according to data intelligence platform Luxurynsight – although the brand’s latest sales figures suggest this strategy might not be paying off.

The savviest brands will look to local Chinese brands and up-and-coming premium brands for inspiration on how to stay top of mind among a contracting consumer base and build a presence among Gen Z consumers exploring the luxury market for the first time. Strategies like localisation, cross-industry collaborations with local brands and building relationships with niche interest groups will be important going forward.

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China is the world’s second-largest luxury market thanks to a rising middle class and many high-net-worth individuals (HNWIs) with huge disposable incomes. According to a recent Morgan Stanley report, Chinese consumers will make up 60% of total global spending growth on luxury items by 2030. In fact, mainland Chinese buyers will boost demand for luxury items by 20% in 2023 alone.

Much of this growth is being driven by digital platforms, which are not just being used as shopping channels but also for content-based product information. Among these platforms is Alibaba’s Tmall Luxury Pavilion, which hosts 200 premium and luxury names from around the world and uses the latest technology – including AR, VR and live streaming – to engage Chinese luxury consumers.

According to the latest data from Tmall Luxury Pavilion, more than 80 million people with a strong interest in luxury goods browsed, collected or purchased more than 10 times on the Taobao App over the last year.

The importance of Tmall Luxury Pavilion was underscored recently when its general manager, Janet Wang, was inducted into the Business of Fashion 500, an influential list of the people shaping the global fashion industry.

Wang has led Tmall Luxury Pavilion since 2021 and has spearheaded a range of cutting-edge initiatives, including live streaming new season fashion shows from New York, London, Milan and Paris, and launching Tmall Luxury Pavilion’s first immersive offline art exhibition, New and Beyond, in Shanghai. Tickets to the exhibition were distributed for free through gamified interactions on Taobao, and visitors could experience various blended online-offline interactions on-site such as the virtual try-on of clothes, as well as receive digital collections.

As Wang told BoF in 2022, brands in China should view platforms like Tmall Luxury Pavilion – including social commerce platforms like Douyin and Xiaohongshu (RED) – as more than just sales channels. Instead, they should take advantage of the technological tools and consumer interactivity the platforms offer to gather insights and use them to shape their strategies in China.

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In stark contrast to the overcast outlook of China’s overall economic recovery, the luxury sector has seen positive signs after what has been described by Vogue Business as “expectation-beating growth” in the second quarter of 2023, retaining the momentum gained in Q1.

This is evidenced by Burberry’s 46% sales growth in the mainland in the first three months of the year. Similar traction was also captured by heavyweight LVMH, which clocked sales growth between 40% and 45% in the first half of the year.

Nevertheless, the resumption of offline vitality in the luxury market doesn’t seem to have stolen the thunder of digital practices looking to energise the revival of the sector, as signposted in the China Luxury Market Digital Trends 2023 Report released by Tencent Marketing Insight with additional analysis provided by Boston Consulting Group.

Douyin (the Chinese version of TikTok), which is home to more than 600 million monthly active users, 150 million of whom show a strong appetite for extravagant purchases, has become increasingly important for facilitating the growth of luxury in China. According to the 2023 Douyin Luxury Industry White Paper jointly published by Ocean Engine, Douyin E-commerce, Trend Insight and Deloitte China, the viral short video app has now become a marketplace for over 70% of China’s luxury buyers.

The platform expects to see its most heavyweight luxury consumers increase their annual spending by 7% from RMB 600,000 (£66,470) to RMB 643,000 (£71,234) in the coming years, while moderate and light luxury buyers, who are more price-sensitive, are expected to reduce their yearly consumption of luxury items by 5% to RMB 112,000 (£12,497) and 15% to RMB 16,000 (£1,772), respectively, reflecting a more cautious consumer behaviour.

While stylishness/trendiness and the ability to cater to the pursuit of individuality remain core considerations for Chinese consumers, the overall trend of making purchases for self-satisfaction is growing in relevance for luxury consumption, and has been shown to be a priority for almost half (47%) of Douyin’s luxury seekers. Luxury products are also expected to be more compatible with daily life, as agreed by 49% of 1,590 respondents, while allure is enhanced for those seeking items for more diverse occasions.

Meanwhile, due to ongoing economic uncertainty, the attribute of preservation of value has been growing in appeal to luxury shoppers, resulting in items such as jewellery, watches and luggage seeing the fastest growth in sales. The subcategory of bags and suitcases, which currently has a market share of 35%, drew the most interest from Douyin users who fall under the age groups of the post-80s and post-90s generations (i.e. Millennials and Gen Z).

These demographics are paying more and more attention to product quality and are more likely to immerse themselves in short video content focusing on product attributes, as well as evaluations or reviews from key opinion consumers (KOCs).  Sixty four per cent of these demographics endorse mainstream luxury brands, and 66% invest in classic designs, with affordability for varied use scenarios, including work and life, being the most valued. This indicates that collaborating with KOCs who can share their user experience in a way that is viewed as “more genuine and authentic” should be a core strategy for luxury brands in leveraging Douyin’s ecosystem, to not only resonate with their target audience but pull off sales growth in the discussed category.

Jewellery contributes to nearly one-fifth (19%) of Douyin’s luxury market space, thanks largely to the youngest cohort: post-00s shoppers. Characterised as “trend chasers”, this demographic is interested in branded marketing events, such as fashion shows, exhibitions and pop-ups, while crossover and artistic collaborations are also likely to turn their heads. In this vein, luxury brands are advised to take agile actions in tapping into topical events in their marketing executions, while online synchronisation of offline activations is the rule of thumb for brands looking to expand their traction amongst the younger generation of luxury shoppers.

While watches comprise 15% of the digital marketplace at present, that figure is expected to rise to 18% as users born before the 1980s – who are deemed to be “lowkey” shoppers who pursue a sense of value – become the backbone consumers for the watch segment. Owning watches is intended to portray a sense of “quiet luxury” on special occasions, which is in line with their consumer persona.

The content interests of this consumer demographic appear to be centred around brand culture and history, and they are also more likely to follow brands’ official accounts. This gives luxury timepiece makers a special edge in capitalising on the “closed loop” e-commerce system in Douyin, enabling a seamless online purchasing experience while deepening their relationship with luxury watch fans.

The phased rebound in the luxury sector has boosted confidence in China’s consumer market, leading to a prediction of an annual market growth of 18% to RMB 580 billion (£64.25 billion) this year, per Deloitte. As a digital space, Douyin will play a greater role in assisting luxury players in connecting with and further engaging China’s potential luxury buyers who are digitally savvy,  continuing to act as a centrepiece for the industry to follow the same trajectory.

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Tell us more about how Harrods entered the China market

At Harrods, we have been actively involved in the Chinese market for over 10 years, building strong relationships with Chinese customers both in London and in China. We are proud to have been the first department store in Europe to embrace Chinese payment methods such as Alipay, showcasing our commitment to catering to the needs of Chinese customers. From day one, we recognised the importance of Chinese social channels, and our teams have been dedicated to regularly visiting the market to stay connected.

In recent years, we have taken significant steps to further strengthen our brand in China. One notable initiative is The Harrods Hive, where we bring together industry leaders and emerging creative talent. We have held networking events and industry-led discussions in Shanghai and Beijing, fostering knowledge exchange and nurturing connections within the creative community. The Harrods Hive has been instrumental in establishing us as a respected and influential player in the Chinese market, while also helping us to discover exciting new talent in the fashion and creative industries.

To expand our presence, we are now focused on introducing exclusive food and beverage offerings in China. In Shanghai, we have opened The Harrods Tea Rooms and The Harrods Piano Bar, providing a constant connection to our iconic Knightsbridge store.

Overall, our presence and continuous journey into the Chinese market have been marked by our strong efforts to engage and understand our Chinese customers. We value the long-standing relationships we have, and we strived to ensure that even when travel to London was not possible during the pandemic, Harrods remained a byword for luxury for our Chinese customers.

What major successes and growth has Harrods experienced in that time? How about challenges?

Like any business, we faced multiple challenges during the Covid-19 pandemic. However, in 2021, despite the difficult environment, Harrods successfully launched The Harrods Hive with our first event in Shanghai and opened the Harrods Tea Rooms in Shanghai. The Tea Rooms proved to be a significant success, providing a quintessentially British experience for Harrods’ Chinese customers who were unable to travel to the flagship store in Knightsbridge, creating a sense of connection and bringing the Harrods experience closer to customers in China even when borders were closed.

How critical is the China market to Harrods’ global strategy?

The Chinese market is extremely important to our brand’s international strategy. As one of the fastest-growing economies with a strong appetite for luxury goods, China represents a substantial current and potential client base for Harrods. The Chinese market provides opportunities for both growing sales in our Knightsbridge store and our e-commerce channels. We have recently soft-launched our .cn pages to grow our online presence in the region, with a full rollout to come in the near future.

Tell us a little bit about how Harrods connects with consumers in China. How does the Chinese market differ from other major markets you operate in?

One key difference is the distinct social media landscape in China. Platforms such as Weibo, WeChat, Xiaohongshu and Douyin (TikTok) hold significant influence among Chinese consumers. We have adapted our strategy to leverage these platforms and engage with customers in a more playful and creative manner. For example, we created custom WeChat stickers celebrating iconic elements of the Harrods brand, such as the Green Men and teddy bear, which have been extremely popular.

By infusing creativity into our digital interactions, we aim to strengthen connections and foster a sense of shared enjoyment with our Chinese customers. We also work closely with KOLs and influencers on these digital platforms for seasonal campaigns and to showcase our offerings in China, such as the Harrods Tea Rooms and the Piano Bar in Shanghai.

Overall, we have established and will continue to develop a well-rounded approach that incorporates multiple digital and physical touchpoints and embraces the unique characteristics of the local luxury market to effectively connect with our Chinese customers.

What are your thoughts and reflections on the Chinese consumer landscape today, and how has this changed over the pandemic?

The Covid-19 pandemic disrupted spending initially, but Chinese consumers’ strong appetite for luxury goods has returned. What we see now is a market shaped by the trends that accelerated during the pandemic, i.e., the consolidation of the digital evolution and the desire for experiential luxury. Adapting to these changes and understanding evolving preferences is vital for businesses operating in the Chinese market.

What do you think will be the hottest consumer trends in China over the next five years?

China’s consumer trends will continue to revolve around the next generation of fashion designers and the promotion of Chinese cultural pride. Emerging designers are redefining Chinese fashion by blending traditional elements with contemporary styles, and there is a growing demand for fashion that reflects Chinese culture.

The prestigious Yu Prize, of which I have been fortunate to have been a judge in previous years, along with our Harrods Hive series, supports and nurtures up-and-coming talents in China, providing exposure and opportunities for their growth, and we are proud to be shining a spotlight on some of the country’s very exciting creative talents.

What are Harrods’ future ambitions and plans in China?

China continues to be a very important market for us, and we have some significant plans for how we will extend our current footprint in China with new concepts, which will be announced later in the year. In addition, the recent soft launch of our .cn website will further grow our online presence in the region. This has been a significant investment for us, demonstrating our ambition to create a seamless experience for our Chinese customers, whether they are in Knightsbridge or at home.

If you could give one piece of advice to UK consumer brands entering China, what would it be?

Invest in a truly deep understanding of the local market and consumer preferences through customer research and, most importantly, spending time with key stakeholders and clients in the region. Building strong relationships, embracing the fast-paced movement, and recognising and understanding local trends and preferences will be the key to success for brands entering into the Chinese market.

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

The post How Harrods leveraged the digital revolution in China appeared first on Focus - China Britain Business Council.

China’s luxury market has bounced back following the reopening of the country’s borders, creating a wealth of new business opportunities. According to a recent Morgan Stanley report, Chinese consumers will make up 60% of total global spending growth on luxury items by 2030. In fact, mainland Chinese buyers will boost demand for luxury items by 20% in 2023 alone.

So, how can fashion and luxury retail brands capitalise on this to successfully expand in China?

Why China and why now?

Chinese shoppers are increasingly making their home country their primary retail destination, with a growing proportion of the £83 billion spent annually on luxury goods by Chinese consumers remaining within the country. 

Historically, the Chinese mainland’s higher prices and tax rates compared to places such as Europe or Hong Kong saw consumers look elsewhere for luxury goods. Generally, people would purchase when travelling abroad or ask their friends or “daigou” shoppers to buy luxury goods for them at a cheaper price.

However, the travel restrictions imposed during the Covid-19 pandemic encouraged consumers to satisfy their luxury needs domestically. 

Tapping into trends

When expanding in the Chinese fashion and luxury retail market, it’s vital to understand current consumer trends and tailor your business approach to match.

Chinese consumers are incredibly savvy when it comes to making purchase decisions. The 2023 McKinsey China Consumer Report revealed that consumers are now omnichannel shoppers in terms of how they search for and purchase products. Digitisation has played a key role in this, with consumers now learning about products and brands from livestreams, videos and key opinion leaders (KOLs) and key opinion consumers (KOCs) on social media.

McKinsey’s report showed that 60% of Chinese consumers interact at least once a day with over-the-top (OTT) audio and video streaming platforms, spending an average of nearly two hours per day watching short videos. 

The sheer number of monthly active users on platforms such as Douyin is driving massive growth, not only as a social media platform, but also as a shopping channel. The gross merchandise value (GMV) of products sold on Douyin jumped by 80% from 2020 to 2021 to reach RMB 830 billion. Perhaps the biggest reason for this is that Douyin provides content-based product information that helps consumers make smarter decisions. The era of celebrity KOLs is still going strong and “vertical KOLs”, which specialise in providing more detailed information about the features and functionality of products, are becoming increasingly popular.

The introduction of ‘buy now, pay later’ (BNPL) has offered a new avenue when it comes to affordability. Although BNPL is still in its infancy in the Chinese market, the China Buy Now Pay Later Markets Report 2022 predicts strong medium-to-long-term growth for the Chinese BNPL industry, reaching a compound annual growth rate (CAGR) of 26.3% between 2022 and 2028.

Taking on the challenges

Although China presents a wealth of opportunities for fashion and luxury retail businesses, there are also challenges when expanding in the market. 

One of the main challenges is the fierce competition from local brands, who have made market gains in the wake of the Covid-19 pandemic. According to McKinsey, 49% of Chinese consumers think domestic brands are “better quality” than foreign brands. This highlights the increasing interest in sustainability and quality as consumers seek out features and benefits over luxury heritage. 

Something that is often overlooked but is sound business practice when expanding into a new market is ensuring you have a physical presence on the ground, whether this be a physical store or people on the ground in senior management roles. 

When it comes to physical stores, your main priority should be picking outstanding locations. Whether you’re planning to open a standalone street-side boutique or take a unit in a high-end shopping mall, good locations are often difficult to secure. This is largely due to landlords having a dominant position, with the ability to classify the tier of your brand and accordingly assign available spaces to you.

Additionally, challenges are often encountered when you don’t have senior management and expertise on the ground, as it means that problems cannot be dealt with as quickly and efficiently. Therefore, having someone physically present in your supply chain — or working with a trusted partner in China — is vital to keeping goods and services running smoothly and staying on top of market specific demands. 

Another challenge is understanding China’s ever-changing regulatory environment. Most of China’s policies around market entry, product licensing and labelling, taxation and employment are subject to frequent and sudden changes.

Compliance challenges are also common, as there is evolving legislation on data protection such as the Personal Information Protection Law. Laws such as these are largely adopted from EU laws and apply when foreign investors transfer data overseas, resulting in many businesses needing legal advice to ensure they remain compliant.

When to turn to experts for support 

Expanding a business in a new market can be daunting, especially when you’re unfamiliar with the ins and outs of what makes the market tick. To make the process easier, brands are highly recommended to seek out local service providers to ease the pressure and access expert advisers in the field. 

A local service provider (like Hawksford, for example) can handle market administrative services, allowing brands to focus on doing what they do best. In addition to helping businesses navigate the complexities involved in expanding in China, a good service provider can act as a business’ regional CFO, accounting team and local HR team to take care of financial reporting, cashflow management, manage staff payroll and help you meet your investment targets properly and in a timely manner.

The great potential the Chinese market brings makes expansion worthwhile, but to avoid losing out, the process needs to be carefully considered. 

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

The post What luxury brands need to know before expanding into China appeared first on Focus - China Britain Business Council.

Strict travel restrictions and quarantines, harsh lockdowns and political tensions, not to mention the absence (until mid-August 2022) of direct UK-China flights, have led many British luxury brands to question their investments and long-term opportunities in China. At Gusto Luxe, we are frequently asked “should we still bother?” My answer is always a strong “yes”.

China’s robust economic foundation, combined with its rising middle class and luxury-hungry Millennials and Gen Zers, provide the necessary conditions for luxury to keep thriving. According to Bain & Company, domestic sales of luxury goods in the Chinese Mainland increased 36% year on year to almost RMB 471 billion (£57.5 billion) in 2021. Millennials and Gen Zers account for over half of luxury spending in China, and that number will keep rising.

This has been evidenced by the quick recovery in the aftermath of the recent lockdowns in cities like Shanghai; the long lines outside Hermes, Dior and Chanel are testament to people’s desire to purchase luxury goods, despite the challenges brought on by the pandemic in their personal and business lives.

China still presents the biggest opportunity for premium and luxury brands, and though there are an increasing number of fantastic Chinese brands across many premium sectors, foreign luxury is still seen as the “real” luxury. The maturity and sophistication of consumers in China today means that there is an appetite for new brands and experiences. Smaller and niche brands, whether in fashion, tech, beauty or travel, have the opportunity to leverage social media – particularly user-generated content-driven platforms like Xiaohongshu — and build communities of fans in ways they could never have done before.

With China’s border largely closed since March 2020, it’s more important than ever to have a robust and flexible China strategy. Travel restrictions mean that luxury consumers are not yet back to travelling to Europe and the UK, but the appetite is there, as evidenced by the recent strength of luxury duty free sales in Hainan, where about 95% of duty free sales in 2021 were personal luxury items such as luxury brand cosmetics.

So what do luxury brands need to know about the China luxury market in 2022?

1. Get ready for the return of travellers: The UK is high on the wishlist for Chinese travellers as soon as travel between the two countries gets easier. In the meantime, you can stay on people’s radar by raising awareness and creating desire for your brand and the destinations you sell in. On the ground, how ready are you to provide a seamless and great experience for their return, for example Mandarin-speaking sales staff or mobile payment options like WeChat and Alipay?
2. Common Prosperity strategy: Ensure that you are thinking about the implications of the Chinese government’s drive for “common prosperity.” Ask yourself: as a brand, what is your China-specific sustainability strategy? You may also need to think about how you would respond if there was a crackdown on luxury advertising or the introduction of taxes on luxury items that are seen to be particularly polluting
3. Embrace China’s unique digital ecosystem: This is a key challenge but also your biggest opportunity. Carefully select which social media platforms to launch on, in line with your target audience. Luxury online penetration reached 19% in 2021 and is only expected to increase.
4. Bridge the (knowledge) gap: Find partners in China who can help you navigate and understand the complexities and nuances of the market.
5. Be crisis ready: You never know when a crisis will arise, and you may get sucked into something which has nothing to do with you, such as a celebrity scandal. Investing in a crisis playbook might be the best thing you do.

The key to success lies in constant evolution at China speed, whether that is product development, creative collaborations, embracing new types of influencers (virtual, even) and social media platforms. Brands must keep moving. The pace is faster than in any other market and the key is to build out strong local teams and find the right partners. The “codes” of luxury, well-formed and established in markets such as Europe and the US, are being rewritten frequently in China.

It’s more important than ever for those in the luxury sector to learn and appreciate the innovation China has to offer. Some clever brands are applying China learnings in retail and digital to their operations in other markets. We also need more people to engage properly with China and learn the language. Sadly, the number of students at universities in the UK studying Chinese is fewer than 1,000, and this number has decreased since I studied Chinese in the 1990s.

China will continue to offer a huge and exciting opportunity for luxury brands. It’s for this reason that at Gusto Collective we have strengthened our offering in Europe. From a London office, we support our clients with strategic counsel, China briefings, crisis management, tech products (virtual influencers, AR, VR, and more), building communities of Chinese consumers in the UK. We work hand in hand with our talented teams in Shanghai and Hong Kong to help brands navigate – and thrive – in the world’s most exciting market.

I remain incredibly positive about the outlook for luxury in China.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research services can help you build knowledge and understanding of the Chinese market prior to investment.

The post Why the future is bright for the luxury market in China appeared first on Focus - China Britain Business Council.

The Chinese market has become the holy grail for luxury brands: in 2020, the country’s overall share of the global luxury market doubled to 20%. However, with countless complex social media and e-commerce sites to navigate, getting a foot in the door can seem like the stuff of nightmares. Dao Insights have outlined five examples of how luxury brands have nailed marketing in China, from capitalising on live streaming to picking the right shopping festivals for their target audiences.

The power of live streaming and short-video formats

Western luxury brands may be more comfortable with well-planned, opulent campaigns, as opposed to ‘silly’ short and snappy TikToks or live streams. However, with China’s online users spending an average of 110 minutes watching short videos every day, these platforms provide an unmissable opportunity. In fact, nearly every Chinese social media platform has integrated short video and live streaming into its services.

Notable names like Cartier have shown how this booming ‘unconventional’ industry can enable brands to appeal to China’s younger luxury consumers. Cartier ditched stuffy luxury brand conventions in their ‘Make Your Own Path’ campaign, and instead tried to resonate with potential consumers to spread brand awareness among a new audience.

Cartier’s Make Your Own Path campaign attracted 1.1 billion views

Cartier racked up 1.1 billion views by encouraging people to show off their dance moves on Douyin with a branded filter. The virtual dancing didn’t stop there; Cartier also held an online party that was live streamed on Douyin, Weibo, Xiaohongshu and WeChat. For those who wanted a real-life dance, the brand launched an event with hip-hop band X-crew-official at one of the most famous techno, house and disco clubs in Shanghai.

Cherry-picking the right shopping festivals

Singles’ Day, Double 12, Womens’ Day, 520, 618 … the list goes on. With a different shopping festival constantly around the corner, brands that are selective can often gain the most engagement.

Every company wants to resonate with its Chinese audience during Chinese New Year, but sometimes the abundance of marketing messages can get lost in the noise. YSL therefore made a bold move and decided to ditch Chinese New Year in favour of Valentine’s Day this year, as the two took place on the same weekend. The bet paid off. The luxury brand dominated the conversation during the love-themed festival by investing heavily into paid advertising and working with key opinion leaders (KOLs). The Weibo page “#YSL Valentine’s Day gift”, which hit 42.33 million views, was filled with posts linking directly to YSL’s Taobao store for a one-stop purchase.

In 2021, YSL eschewed Chinese New Year in favour of Valentine’s Day

Nonetheless, YSL didn’t forget Chinese New Year completely. The campaign still contained subtle hints to the festival at the heart of the Chinese calendar. Red-themed promotions, limited-edition gift sets, and personalisation services appealed to consumers looking for the perfect Chinese New Year gift for loved ones. Through a cleverly curated campaign, YSL successfully became the talk of the town during a festival that most brands overlooked.

Understanding different target audiences and how they use social commerce platforms

In China, the decision to purchase is always only one click away. Seamless integration between social media and e-commerce is a must, begging the question: where should brands start with China’s social commerce landscape? Should they spread themselves thinly, or pick and choose? While tapping into multiple channels can expand reach, several successful brands have chosen to focus on just a couple of social platforms to best target their audience.

A luxury brand going hand-in-hand with an anime, comic and gaming (ACG) platform may seem like a recipe for disaster. But not in China. Aware of the popularity of Bilibili among Gen-Z consumers, several luxury brands have opted to work with the platform. For example, Louis Vuitton appealed to the numerous young users on Bilibili who love ACG content but don’t yet have the purchasing power to buy luxury goods. The strategy focused on building up the brand awareness and loyalty of these consumers in the long term, while simultaneously targeting the children of wealthy parents. Their AR filter allowed users to morph into a character from League of Legends and wear ‘real’ Louis Vuitton products without the heavy price tag.

A content partnership between Bilibili and Louis Vuitton

Dior, Gucci and jewellery brand Chow Tai Fook are among other luxury names to partner with Bilibili and tap into their niche ACG and e-sports-obsessed audience. Brands that are selective in their marketing strategy often excel as they can tap into subcultures and specific audiences by focusing on certain platforms.

Partnering with another big name is an easy win for luxury brands who want to appeal to a more sub-cultural audience.

Co-branded campaigns are all the rage

Chinese consumers like to get their hands on the latest limited-edition products due to their exclusive appeal. Often, the products that fly off the shelves are those that combine two well-loved brands from different industries. As a result, brands shouldn’t shy away from unexpected collaborations: Chinese consumers have been graced with ‘chicken bags’ à la KFC x Karl Lagerfeld, and an imperial meal box from Beijing’s Forbidden City and delivery platform Eleme.

A co-branded partnership between Gucci and The North Face was popular with young urban consumers

Partnerships that share a vision are the ones that enjoy the most success. Gucci and The North Face found synergy in encouraging consumers to embark on a journey of self-exploration and self-discovery through their products. Their campaign came at a time when camping and other outdoor activities has been flourishing in popularity among Chinese people. For that reason, the collection hit the spot among China’s young urbanites who want to remain fashionable with practical gear to survive the great outdoors.

By combining audiences, setting up pop-up stores in major cities, and working with 14 celebrities, Gucci and The North Face achieved extensive reach. Partnering with another big name is an easy win for luxury brands who want to appeal to a more sub-cultural audience.

Understanding China’s growing consumer nationalism

More and more international brands are slipping up and falling3qr out of favour with Chinese consumers for political reasons. Chinese companies have seen strong sales growth at the cost of foreign brands due to their in-depth understanding of local consumers and a wave of consumer nationalism, or guochao, that has swept China’s retail sphere.

Yet, this is less true of the luxury market where, as of yet, few strong domestic brands have emerged as competitors. Despite losing its partnership with Honor of Kings, Burberry has stated that the recent Xinjiang cotton boycott has had little impact on its sales.

Prada worked with singer Cai Xukun for a 520 campaign

Nonetheless, Prada has shown that to maintain a strong position in the Chinese market, sensitivity and localisation are key. Heartthrob singer Cai Xukun joined Prada as a brand ambassador and played a central role in its romantic campaign for 520 (one of China’s many love-themed festivals) last year. In comparison to Western brand ambassadors, Chinese celebrities have a more personal connection with local audiences and are better versed at using the country’s social media platforms.

Chinese consumers are turning towards homegrown brands, and so, luxury retailers who want to remain relevant in China are localising and highlighting their understanding of Chinese culture.

Takeaway: Successful luxury brands are humble when going into China

With a higher proportion of young luxury consumers than the West, China’s luxury marketplace is more dynamic and there is a strong demand for innovative campaigns. China offers huge potential for international brands if they are willing to learn about its unique market, platforms and consumers. Successful luxury brands must be humble enough to set aside their centuries of Western expertise in order to localise effectively.

The post From Cartier to Gucci: 5 luxury brands that nailed their China marketing  appeared first on Focus - China Britain Business Council.