china / Consumers

The once-promising Chinese travel retail market is showing little signs of recovery, causing global beauty giants to reevaluate their strategies and reduce promotions.

With soaring profits and rapidly expanding store networks, ‘heritage-gold’ jewellery brands like Laopu Gold and Lao Feng Xiang are red-hot in China’s otherwise tepid luxury market.

Once fashion’s most reliable growth engine, the Chinese market is shifting as consumer spending cools and shoppers with more choice than ever gravitate toward savvy domestic brands. Opportunities for international players are still plentiful, but the old formula for succeeding in China is no longer relevant. Brands need a new game plan to stand out.

The key question is whether the drop is due to a weakening economy or a shift in consumer perception towards luxury items as mere commodities.

Amid China’s market struggles, a broader trend of shifting consumption towards services and unique experiences is emerging, despite ongoing challenges like modest income growth and declining home prices.

From sportswear giants Anta and Peak to cosmetic brands Maogeping and Chando, Chinese companies placed their marketing bets on team uniforms, athlete endorsements and themed products.

Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.

While travel to Europe remains muted, Chinese shoppers are flocking to Singapore, Thailand and other Southeast Asian destinations where fashion retailers are hoping Lunar New Year marketing investments will pay off.