In China’s fiercely competitive retail landscape, international giants like Carrefour and Tesco have struggled to gain traction. Yet, the German discount supermarket chain Aldi has defied the odds and carved out a successful niche in China. The chain achieved RMB 2 billion in sales in 2024, a 100% increase year-on-year.

Aldi was launched in China through the Tmall Global Platform in 2017. Its first official physical store in Shanghai was opened in 2019, and focused on consolidating its presence in Shanghai. By 2025, Aldi will have grown to operate over 60 stores in Shanghai alone, with recent expansions into neighboring Jiangsu province cities like Suzhou and Wuxi. What makes Aldi’s success particularly remarkable is how it has adapted its global “hard discount” model and localized it to Chinese consumer preferences.

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Why Aldi resonates with Chinese consumers

Aldi’s success in China stems from its understanding of evolving consumer priorities. In a market where food safety remains a major concern, Aldi’s “Made in Germany” brand association conveys quality and reliability. Stores are strategically located in residential areas, near subways, and business districts, with many just a five-minute walk from homes. This particularly appealed to Shanghai’s time-pressed urban professionals and young families. The convenience factor is amplified by digital integration, where groceries can be delivered within 30 minutes for orders within a 3km radius.

Moreover, Aldi tapped into China’s consumption downgrading trend. While maintaining quality, prices are significantly lower than competitors. This was made possible by its range of private-label products, which made up nearly 90% of its store-keeping-unit (SKU) mix, and its local sourcing strategy. The managing director of Aldi China, Roman Rasinger, stated that over 80% of products are directly sourced from local suppliers. By eliminating middlemen, the cost savings could be passed to consumers. The value proposition has earned strong word-of-mouth, which shoppers enthusiastically share their finds on social platforms like Xiaohongshu (also known as RedNote). There are also daigou and Taobao resellers of Aldi products, as most of the stores are located in Shanghai and neighboring cities.

The key to Aldi’s success in China

Neighborhood integration

Aldi stores function as community hubs, with café counters serving quick meals like rice bowls that professionals grab during lunch breaks. Early morning deliveries, starting as early as 7 am, with incentives like free eggs for orders placed before 10 am, directly compete with traditional wet markets.

Product strategy and packaging

The SKUs are curated to carry fewer selections than other supermarket chains but items with a higher potential for repeated purchase. The packaging is also smaller as compared to bulk formats at Costco or Walmart. This is to fit single-person or small-family households that are typical in Shanghai. Beyond adapting package sizes, Aldi’s product development emphasizes Chinese tastes. Aldi in China features local specialties like hotpot ingredients alongside German beers and wines. Aldi even stocks treats from popular Shanghai temples and iconic butterfly pastries from the Park Hotel that are typically hard to find.

Localized marketing and branding

Aldi’s marketing blends German efficiency with Shanghainese cultural cues. The company hired Xueyi, a local Shanghainese personality, to connect with older generations. Guerrilla marketing in subway stations targets office workers. Furthermore, giveaways during new store openings feature practical items like eggs, milk, and cooking oil that Chinese consumers appreciate.

Digital-first loyalty programs

Rather than requiring paid memberships like Costco and Sam’s Club, Aldi offers free membership through WeChat mini-programs. It was then used to foster customer loyalty through shopping occasions like “Tuesday Members’ Day” and special discounts through mini-program orders. Aldi also created private traffic through a chatbot, “Xiao Ao” that provides instant chat support, discount updates, and QR‑code sharing for referral discounts.

Leveraging on the consumption downgrade trend

China’s retail landscape has witnessed a fundamental shift in consumer priorities—from chasing the lowest prices (“性价比” or value-for-money) to demanding reliable quality at reasonable costs (“质价比” or quality-to-price ratio). This nuanced but powerful evolution reflects a more sophisticated Chinese shopper who balances budget consciousness with heightened expectations for product safety and consistency. Aldi’s private-label model, with third-party audits and strict IFS-quality certification for suppliers, delivers that promise.

Competitive landscape and future outlook of Aldi in China

Aldi’s closest competitor in China is Alibaba’s Hema NB (Freshippo Neighborhood). Hema pioneered the “new retail” concept, blending online and offline experiences. Hema NB is Hema’s discount grocery chain, which sells near-expiry products from regular Hema stores and offers more white-labelled products. It has been expanding aggressively with over 250 outlets across China by the first quarter of 2025. Nonetheless, Aldi’s smaller and curated SKU line targets more regular repeat purchases that are better aligned with upper-middle-class shoppers in its targeted cities.

Inside Aldi’s China playbook: Localization, convenience, and trust

• Aldi in China adapted its global private-label discount strategy to Chinese preferences by focusing on smaller package sizes, local flavors, and curated SKUs for frequent repeat purchases.
• The brand strategically locates stores in residential areas, metro stations, and business districts with high foot traffic. It also offers fast delivery within 30 minutes for users located 3km from the store to capture more consumers.
• Aldi stores function as neighborhood hubs with services like breakfast deliveries and café counters. Localized marketing through influencers, metro ads, and culturally resonant giveaways strengthened its appeal.
• Aldi capitalized on China’s “quality-to-price ratio” trend by offering reliable, locally sourced products at an affordable price. Over 80% of products are sourced directly from domestic suppliers to reduce costs.
• Through WeChat mini-programs, Aldi offers free memberships, referral rewards, and chatbot support. The mini-program also hosts “Tuesday Members’ Day” to boost customer loyalty and cut down on middle-men.

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From zero to hero: the history of Lego in China

The history of Lego (乐高) in China begins in 1993 when the Danish company opened its first store in Beijing. At that time, keeping a stable price over time was an extremely difficult challenge because the government imposed heavy taxes on every imported toy. Lego was considered a luxury item during that period, especially because of the sudden variations in the products’ retail prices. Back then, intellectual property rights didn’t exist in China. Therefore, many industries tried to copycat the company’s products and sell them at lower prices. Lego survived this ruthless competition and, in 2021, became one of the biggest toy producers in the country and in the world.

Huge investments show Lego’s long-term commitment to the Chinese market

Lego’s success in China can be largely attributed to the company’s significant investments in the country, particularly in opening new stores. In 2021 alone, out of 165 Lego stores opened across the globe, 90 were situated in China. This trend has continued in 2022, with 46 new store openings in the first six months of the year. The Danish company has also targeted lower-tier cities, which represent a significant portion of the Chinese consumer base. In fact, out of all the stores owned by Lego in China, around 40% are located in 2^nd and 3rd-tier cities. Lego’s expansion policy continues to this day. As of 2023, the company has more than 480 retail stores across China.

Legoland Shanghai: Lego’s foray into China’s theme park market

Legoland Shanghai officially opened in Jinshan District on 5^th July 2025. It is the world’s largest Legoland and the first in China. It targets families with children aged two to twelve years old and also adult fans, with certain rides or activities designed to encourage parent-child cooperation. The park features eight themed zones, 75 rides and attractions, and thousands of LEGO models made from over 85 million bricks.

The park employs a six-tier pricing system ranging from RMB 255 to 599, making it Asia’s most expensive Legoland. Due to the high prices coupled with extreme weather disruptions, the opening was subdued compared to Disney’s launch in 2016. There were no major ticket scalping seen and steady ticket availability on ticketing platforms. Manual social listening on RedNote revealed several issues. The park is located 70 km from central Shanghai, making it hard to reach. Limited public transport also adds to the problem. Moreover, operational issues also affect interest, including long wait times and unopened rides.

Nevertheless, Legoland’s investment in China reflects its confidence in the long-term potential of the domestic family tourism market. Its localization strategies include creating Chinese-themed LEGO sets and incorporating Chinese elements in most of its parks. It features miniature landmarks such as Potala Palace and Yellow Crane Tower for their Chinese cultural elements.

Lego’s marketing strategy in China shifts to e-commerce and sustainability

For the past few years, Lego has been focusing on digitalizing every aspect of its business in China. After the pandemic, Lego has started a new phase of its digital transformation, aiming to improve customer experience by collaborating with the biggest digital platforms, as well as investing for upgrading their products. To engage more with its customers, Lego began to develop its omni-channel retail ecosystem, as well as to sign partnerships with e-commerce platforms.

In 2020, the Danish company first renewed its strategic partnership with the tech giant Tencent: the two parties showed commitment to enhancing the digital play experience and child safety while playing online video games. Lego also invested in creating more eco-friendly set pieces. In 2021, the company revealed a prototype brick created by using recycled PET bottles and announced its goal to reduce reliance on non-renewable materials. Additionally, the company committed to achieving 100% sustainable packaging by 2025. 

Lego is enhancing brand awareness in China

One of the most important events for Lego over the last years was its participation in the China International Import Expo (CIIE). The Expo represents the perfect opportunity for foreign companies to find local partners and stakeholders. In 2022, Lego celebrated its 90th anniversary since its foundation with the initiative “90 years of play”. Moreover, to underline how much families and children mean to the company, Lego built a 78,700-brick playground on its CIIE pavilion. They also did not forget to celebrate the Chinese culture and traditions, and released five Lego sets representing Chinese festivities and symbols, such as the “Chinese Lunar New Year Display”, the “Lunar New Year Parade”, and the “Money Tree”. The Danish company is not new to this Expo, as it was its 5th consecutive year of participation. During the 2021 CIIE, Lego released seven new sets, three of which were inspired by Chinese culture.

Lego aims to build a better future for the next generations

While the 5^th Shanghai CIIE was taking place, Lego also announced a strategic partnership with the China Development Research Foundation called “prescription for play”. The program consists of supporting the development of parental behaviors by helping children learn how to play at home. The Covid-19 pandemic heavily affected the vision of Lego’s marketing strategy in China, which is now also focusing on building safe spaces for children and their families. Apart from distributing playing materials and bricks to local healthcare centers, the initiative will provide in-depth instructions for an improved and healthier parent-child relationship.

In 2021, Lego continued its tradition of collaborations at the Shanghai Expo by partnering with the Shanghai Chenshan Botanical Garden to involve more children in sustainability. The project provided children with the opportunity to share their ideas on what a sustainable future would look like. For the event, the company also built an installation consisting of a 2.5-ton installation called the “garden of creativity”.

Exploring Lego’s initiatives in China: sustainability, creativity, and innovation

Between the end of 2022 and the beginning of 2023, Lego launched two big events on Weibo, the famous Twitter-like Chinese platform. In September 2022, the company launched the campaign “Small World Creates Big Ideas”. The initiative was an immersive experience aimed at encouraging children to create a better and more colorful world. The campaign was launched along with a video of some children using their creativity to build every sort of Lego construction in the real world. The marketing campaign aimed to demonstrate how adding Lego bricks can transform the appearance of buildings such as houses, schools, and benches in Shanghai. This project proved to be a successful strategy for Lego. As of 2023, the official hashtag of the campaign (#小世界造出大创想#) has garnered more than 1 million views on Weibo.

LLego also tapped into the realm of STEM education and car enthusiasts. An exhibition took place in Shanghai and attracted waves of Lego and supercar enthusiasts. The show not only hosted more than 30 vehicles, including 8 new Lego products, but it also collected the works created by Lego fans. The project was designed for children too, inviting them to create their own race cars in the Lego’s workshop. The Weibo hashtags launched by the Danish company have collected tons of views in just a few days. The hashtag “Lego Technic” (#乐高机械组#) reached almost 14 million views, while “Supercar Real Player” (#超跑真玩家#), the official hashtag of the initiative, gained more than 1.9 million views.

Lego’s expansion and marketing strategies in China

• Lego has a significant presence in China’s toy market, holding 43% of the construction toy market share in the country.
• The company has invested heavily in China, particularly in offline retail stores. As of 2023, the company already has 380 stores spread across China.
• Lego targets Chinese families as its primary consumer base, and it is building 3 huge Legoland resorts, which are due to open between 2023 and 2024.
• After the pandemic, Lego has started a new digitalization process focused more on improving the e-commerce retail system and the sustainability of its products.
• The Shanghai CIIE represents an annual opportunity for Lego to show its new products and engage more with its consumers. During the 4th and the 5th editions of the Expo, the company also celebrated the Chinese culture and tradition by releasing Chinese-New-Year-themed Lego sets.
• During the 2021 and 2022 CIIE, Lego signed strategic partnerships with the China Development Research Foundation and with the Shanghai Chenshan Botanical Garden to create a safer play environment for children and introduce them to the concepts of sustainability. 
• Lego’s marketing strategy in China does not end here. Recently, Lego launched two huge campaigns on Weibo aimed at increasing its brand awareness. Both projects had the objective of stimulating children’s creativity, the first one through improving already-existing buildings with Lego bricks, and the other with “Do It Yourself” Lego supercars.

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Platforms shape how luxury is discovered and sold

JD.com, official brand websites, and Tmall lead China’s luxury e-commerce, driven by their reliability and logistics strength. JD.com topping the list at 56% may seem surprising given its roots in electronics and high number of counterfeits, but its investments in official brand partnerships and fast delivery make it the default choice for luxury.

Brand websites and Tmall follow closely, reflecting continued consumer preference for direct, controlled shopping environments. The strong showing of official brand apps (36%) and even platforms like Vipshop (29%) shows that consumers are still gravitating toward platforms that ensure authenticity and convenience.

Meanwhile, Douyin and Xiaohongshu, with only 19% and 18%, respectively, are quickly becoming key channels for luxury discovery. Douyin, in particular, now reaches about one-third of JD.com’s luxury shopper base. This is a notable achievement for a short-video platform that only recently entered luxury e-commerce. As content-driven shopping gains ground, social commerce is expected to grow rapidly and reshape luxury consumption China.

WeChat mini-programs enhance immersion and redefine luxury storytelling

Luxury brands in China are using WeChat mini-programs to deliver more interactive shopping experiences. A standout feature is 3D visualization, allowing users to view and explore products in real time, rotating, zooming, and examining them from multiple angles without needing extra apps. Bottega Veneta’s Tmall store offers high-resolution product views, while Louis Vuitton’s mini-program includes 3D sneakers and interactive quizzes to boost engagement.

These innovations reflect the rise of “retailtainment,” a blend of shopping and entertainment. Brands are adding storytelling elements through AR tools, voice-activated mirrors, and extended reality experiences. For example, during Tmall Luxury Pavilion’s 5th anniversary, Alibaba launched a metaverse fashion show, AR activations, and a Meta Pass for exclusive digital access to top luxury brands, setting a new standard for virtual flagship stores.

Brands integrate luxury service, personalization, and after-sales

One-on-one video consultations are now common on platforms like Tmall Luxury Pavilion, allowing trained staff to guide customers in real time. Gucci and Vacheron Constantin enhance this with tailored, salon-style sessions for VIP clients and complex products like handbags.

Personalized services also extend to the pre- and post-purchase experience. Burberry offers product customization, Louis Vuitton supports in-store appointment booking, and Van Cleef & Arpels provides at-home repair services. Brands like Chopard, Burberry, and Carven offer full after-sales care online, turning digital platforms into fully integrated luxury ecosystems.

Live streaming evolves from sales tool to brand strategy

KOLs, short videos, and content labs now drive brand discovery in China’s luxury market. Influencer marketing, affiliate links, and algorithm-driven recommendations dominate, with Douyin and Xiaohongshu serving as essential platforms for luxury brand engagement.

Luxury live streaming is now central to brand engagement

In 2023, live streaming accounted for about 25% of China’s luxury e-commerce total online shopping GMV, confirming its central role in the digital retail ecosystem. Originally popularized by Alibaba in 2016 during Singles’ Day, live streaming quickly evolved into a RMB 4.9 trillion industry in 2023. With over 2.7 million active anchors and more than 10 million employees engaging in the industry, live streaming is no longer just a sales channel, it has become a key brand-building tool.

Quiet selling aligns with the rise of “quiet luxury”

With the rise of quiet luxury in China, the concept of quiet selling is gaining traction in China’s luxury e-commerce. Notable quiet-selling hosts like Teresa Cheung and Dong Jie are leading this trend. According to Xiaohongshu, Dong Jie’s April 2023 live stream achieved RMB 60 million in GMV, and her eight-hour-long live stream on May 25, 2023, attracted over 2.2 million views. These calm and elegant live streaming hosts attract high-end consumers. Brand storytelling now replaces aggressive sales tactics.

AI streamers are the next frontier in trusted brand representation

In the luxury sector, where image and brand integrity are critical, the rise of AI-generated live streamers offers a compelling solution to the frequent scandals involving human influencers. These virtual personalities help brands maintain consistent messaging, protect their image, and avoid reputational risks that can harm trust and sales. AI streamers also allow luxury houses to curate every detail of appearance, tone, and behavior, ensuring alignment with the brand aesthetics.

As younger consumers engage more through live streaming in China, AI-generated virtual humans are transforming how luxury brands connect with audiences. Virtual influencers like Liu Yexi, Ayayi, and Ling have already partnered with brands such as Prada and Tissot.

Unfair practices remain a big issue in China’s luxury market

As luxury brands expand their digital presence, certain online behaviors and platform dynamics are beginning to challenge brands’ image.

Counterfeits on mainstream platforms erode consumer trust

Counterfeit luxury goods remain a persistent issue on major platforms like Taobao and JD.com, undermining brand credibility and eroding consumer trust. Despite advancements in technology and platform regulation, enforcement is still inconsistent, making it difficult to fully protect brand value in the online marketplace.

WeChat group-buying culture dilutes luxury exclusivity

A growing trend in China reveals how many so-called “socialites” flaunting luxury lifestyles online are staging their images through WeChat group buying schemes. In groups like “Shanghai Socialite,” members split the cost of renting Hermes bags, Ferrari cars, or hotel rooms at places like the Bulgari Hotel in Shanghai, just to take photos. Strict photo protocols are followed: towels can’t be wet, food shouldn’t be eaten, and everyone takes turns posing. Some even share second-hand Gucci stockings or a rented bag across several users. For many participants, the goal isn’t just vanity. It’s to attract social media followers, land brand sponsorships, or gain perceived status, including dating wealthier partners.

While this may increase brand visibility, it poses a credibility issue for luxury labels. Brand prestige risks dilution. If Dior bags or luxury hotel stays are constantly associated with staged, group-funded social media moments, the aura of exclusivity and authenticity that luxury brands rely on starts to erode.

Shopping festivals are high-stakes moments for luxury brands

The 618 Shopping Festival, launched by JD.com, and Double 11 (Singles’ Day), pioneered by Alibaba, are China’s two most influential annual shopping events. These festivals drive massive sales volume by combining deep discounts, exclusive product launches, and live stream-powered entertainment. For luxury brands, these events represent key moments to reach high-spending Chinese consumers, boost seasonal sales, and strengthen brand presence.

For the 2024 618 Festival, JD.com is removing pre-sale periods to simplify the shopping process. It is focusing instead on instant discounts, faster delivery, and enhanced after-sales service. Double 11 continues to innovate with multi-platform campaigns, celebrity-led live streams, and tailored VIP experiences to keep consumer engagement high.

How China is redefining luxury e-commerce

• China has emerged as the world’s most dynamic luxury e-commerce market, with digital platforms like JD.com, Tmall, and WeChat mini-programs reshaping how consumers discover, shop, and engage with brands.
• Live streaming, now central to brand building, combines entertainment and commerce through KOLs, short videos, and even AI-powered virtual influencers.
• Personalization is a key differentiator, with brands offering 3D product views, one-on-one video consultations, and full-service aftercare.
• However, challenges such as Chinese counterfeit products and staged “socialite” content on platforms like WeChat threaten brand authenticity and exclusivity.
• Major shopping festivals like 618 and Double 11 remain critical sales moments, offering luxury brands the chance to boost visibility and connect with high-spending consumers.

Mastering China’s Luxury Market Dynamics

As China’s luxury market witnesses a robust rebound, positioning your brand effectively in this evolving landscape is paramount. We specialize in strategic consulting for luxury brands aiming to penetrate or expand within the Chinese market, leveraging our deep understanding of local consumer preferences, cultural nuances, and digital trends.

Our Services Include:

1. Market Insight: We provide comprehensive analyses of the latest trends and consumer behaviours in China’s luxury sector, ensuring your brand stays ahead of the curve.
2. Brand Localization: Tailoring your brand’s narrative to resonate with Chinese cultural values and consumer expectations, enhancing relevance and appeal.
3. Consulting Services: We offer strategy and management consulting every step of the way.
4. Regulatory Navigation: Assisting with the legal and regulatory aspects of entering and operating in the Chinese market, ensuring smooth and compliant business practices.

Connect with our team of experts to refine your strategy and secure your brand’s position in China’s thriving luxury market.

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Chinese men between the ages of 25 to 34 are among the main consumers in the luxury jewelry and watch sector. Luxury watch consumers in China buy watches in hopes to depict status and consider RMB 5,000 as an entry price for luxury watches. While consumers are digital-savvy and buy luxury products online, when it comes to watches, they tend to search information online and purchase their watches in physical stores. “Swiss Made” watches are the first choice for luxury watch consumers in China, accounting for nearly 30% of global Swiss watch sales in 2023.  

Next-gen stars endorse luxury watches in China

Brand visibility and recognizability strongly influence Chinese consumers’ motivation to purchase luxury goods. Well-known brands are not only associated with higher quality but also serve as powerful markers of social status and success. Therefore, brand awareness becomes a key factor in Chinese consumers’ purchasing decisions. In China, celebrity brand endorsers remain one of the most effective and widely practiced strategies across industries, particularly in the luxury watch sector. While the early 2010s featured a small group of universally recognized national celebrities leading brand campaigns, the landscape has since evolved. Today, younger stars and rising talents dominate the endorsement space, offering brands fresh appeal and direct access to China’s digitally engaged and trend-driven consumer base.

IWC collaborates with Olympic gold medalist Eileen Gu

A prime example of this is the partnership between IWC and Eileen Gu. In 2022, Swiss luxury watchmaker IWC Schaffhausen appointed Olympic gold medalist Eileen Gu as its brand ambassador to connect with China’s younger demographic and capitalize on the nation’s enthusiasm for winter sports—a divergence from the brand’s traditional partnerships that leaned towards classic and masculine figures, such as Nico Rossi and Cate Blanchett. Gu’s remarkable performance at the Beijing Winter Olympics, where she secured two gold medals and one silver, catapulted her to national stardom. Her victory in the Big Air event was so impactful that it temporarily overwhelmed China’s social media platform Weibo, with related hashtags amassing over 300 million views within an hour, causing the site to crash.

IWC leveraged Gu’s soaring popularity by featuring her in high-profile campaigns, including a notable collaboration with Harper’s Bazaar, which showcased her dual identity as both an athlete and a fashion icon. This partnership aligned with IWC’s strategic focus on China’s dynamic luxury market, particularly targeting younger female consumers, who represent a significant portion of its clientele, allowing IWC to modernize its image without compromising its heritage. While Gu’s association with IWC initially generated substantial buzz, sustaining long-term engagement requires consistent visibility and strategic marketing initiatives. IWC’s approach underscores the importance of aligning brand ambassadors with ongoing campaigns and public appearances to maintain and enhance brand exposure in China’s competitive luxury watch market.

Luxury watches focus on real impact, not buzz

Some famous brands prefer to use soft marketing in the luxury watch market in China. Rather than relying on formal celebrity endorsements, many brands lean into subtle strategies inviting high-profile guests to exclusive events, sponsoring film festivals, and integrating their products into films and TV shows. The Year of the Snake brought out a wave of creative soft marketing campaigns in China’s luxury watch market. Jaeger-LeCoultre launched a limited-edition Reverso inspired by the zodiac, while Dior introduced the Grand Soir Year of the Snake, which resonated with Chinese cultural aesthetics. These low-key yet impactful efforts demonstrate how soft marketing has become a sustainable and widely adopted strategy among luxury watch brands aiming to deepen their connection with Chinese consumers.

Status and Rolex in China

Rolex watches symbolize the upper class, individuals who are well heeled and driven by a pursuit of prestige. On Zhihu, one Chinese netizen asked, “what was the experience after purchasing your first Rolex in your life’?” The response with the most upvotes said he had looked for a Rolex Yacht-Master watch for three years in many different countries and finally got it in a small Rolex exclusive store in London. He felt purchasing a Rolex watch was a turning point in his life. Whenever he had the urge and pressure to make a decision, the Rolex reminded him to calm down because people who wear Rolex watches have to be sophisticated. When he noticed other people were staring at his Rolex, he felt proud and extraordinarily satisfied.

Rolex was the first luxury watch brand that entered the luxury watch market in China after the Chinese economic reform. Rolex in China has a special place in the hearts of luxury watch consumers in China. They do not only treat Rolex as a symbol of luxury and prestige as other luxury watches in China, but also as a timeless masterpiece. However, some of the luxury watch consumers in China do not buy Rolex watches in mainland China because of the limited supplies and relatively higher price.

Brand awareness without social media

Rolex in China does not focus on short-term brand exposure or social media marketing since its brand awareness is high in China and it targets high-net-worth individuals who value heritage, craftsmanship, and long-term prestige over trend-driven visibility. Rolex’s marketing strategy focuses more on sponsoring artistic and athletic activities. Rolex has continued sponsoring tennis tournaments for many years and aligns with excellence in tennis. In 2011, Rolex signed an endorsement contract with Li Na, a trailblazer for tennis in Asia. Being the first Asian to win a Grand Slam her career represents discipline and breaking boundaries; all traits Rolex embodies. By backing Li Na Rolex wasn’t just sponsoring a player, they were endorsing the rise of Chinese tennis while aligning the brand with national pride and inspirations.

Beyond the athletic realm Rolex announced in June 2024, its latest brand ambassador, Chinese film auteur Jia Zhang Ke, a month following his new release “Caught By the Tides”. Regarded as one of Chinas brightest directors, this partnership emphasizes Rolex’s attempt to connect with consumers more on a cultural level. Showcasing how Rolex chooses ambassadors not for their fame alone, but for how deeply they reflect the values of mastery, legacy, and distinction, in ways that resonate specifically with the Chinese consumer mindset.

House of Wonders: Audemars Piguet in China

To celebrate its 150th anniversary, Audemars Piguet launched “The House of Wonders” in Shanghai an immersive pop-up experience that brought both seasoned collectors and newcomers into the heart of the brand’s universe. More than a celebration, the event was a strategic move to deepen Audemars Piguet’s presence in the Chinese market by blending Swiss horological tradition with contemporary cultural relevance. By offering exclusive previews and intimate experiences, the event catered directly to VICs (Very Important Customers) China’s elite luxury consumers whose brand loyalty and influence are critical for long-term success.

Designed to engage the modern Chinese luxury consumer, the experience balanced heritage with innovation. One of the standout features was the brand’s effort to stay culturally relevant with younger generations through limited-edition designs and collaborations with pop culture icons such as Spider-Man and contemporary artist KAWS. This contemporary edge was paired with a deep reverence for traditional craftsmanship, showcased in a dedicated room that highlighted the brand’s latest breakthroughs in timekeeping precision, including advancements in time, date, and moonphase complications.

Additionally, its spotlight on R&D, including the patented forged carbon material used in rugged sports watches, demonstrated Audemars Piguet’s relevance in high-performance lifestyles. The House of Wonders not only commemorated a milestone but also served as a calculated brand-building effort—bridging legacy and innovation to engage Chinese consumers and strengthen Audemars Piguet’s long-term positioning in this critical market.

Luxury watch market in China faces counterfeiting

An estimated 15 to 20% of all products in the Chinese market are counterfeits, posing a serious challenge for brands striving to protect their revenue streams and preserve brand value. Nearly 47% of brands report lost sales, with some experiencing revenue declines of over 10% as consumers turn to cheaper imitations. Even more concerning, studies show that 52% of consumers lose trust in a brand after unknowingly purchasing a counterfeit product. In response luxury makers and Guangzhou Customs made an alliance against counterfeit watches. In June of 2024 they seized 7,600 items, including watches, in Guangzhou as part of their crackdown on counterfeit goods. Experts said those counterfeit watches bore a remarkable resemblance to the authentic watches, highlight the threat of “dupes”.

China’s luxury watch market: How luxury watchmakers are winning in China

• China is one of the most lucrative and competitive markets for luxury watchmakers, where brand prestige, cultural relevance, and exclusivity are essential to capturing consumer loyalty.
• From Eileen Gu’s Olympic glow to Jia Zhangke’s cinematic prestige, celebrity partnerships bring emotional depth and cultural credibility. Meanwhile, soft marketing like zodiac-themed drops and art collabs keeps luxury brands in sync with China’s cultural identity.
• AP’s Shanghai pop-up serves as an example of how brands can blend innovation, pop culture, and horological heritage to woo China’s VICs and signal long-term commitment to the market.
• Counterfeiting remains a persistent threat, undermining trust, eroding brand value, and forcing companies to collaborate with authorities and invest in consumer education to protect their reputations.

Mastering China’s Luxury Market Dynamics

As China’s luxury market witnesses a robust rebound, positioning your brand effectively in this evolving landscape is paramount. We specialize in strategic consulting for luxury brands aiming to penetrate or expand within the Chinese market, leveraging our deep understanding of local consumer preferences, cultural nuances, and digital trends.

Our Services Include:

1. Market Insight: We provide comprehensive analyses of the latest trends and consumer behaviours in China’s luxury sector, ensuring your brand stays ahead of the curve.
2. Brand Localization: Tailoring your brand’s narrative to resonate with Chinese cultural values and consumer expectations, enhancing relevance and appeal.
3. Consulting Services: We offer strategy and management consulting every step of the way.
4. Regulatory Navigation: Assisting with the legal and regulatory aspects of entering and operating in the Chinese market, ensuring smooth and compliant business practices.

Connect with our team of experts to refine your strategy and secure your brand’s position in China’s thriving luxury market.

This article The luxury watch market in China: Status, sophistication and counterfeiting is the first one to appear on Daxue Consulting - Market Research and Consulting China.

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By 2024, Sephora had expanded to over 350 stores across 100 cities, including Beijing, Chongqing, Tianjin, and throughout the Pearl River Delta. Yet after nearly two decades of expansion, Sephora’s performance in China has taken a sharp downturn. Revenues have dropped, management has turned over, and its once-loyal consumer base is questioning its relevance in an era dominated by e-commerce, price-sensitive shoppers, and surging domestic beauty brands.

Sephora’s legacy of exclusivity and prestige, once its greatest strength, now risks becoming a liability. With shopping habits evolving and new competitors reshaping the beauty landscape, Sephora faces mounting pressure to reinvent its strategy or risk fading from the spotlight in one of the world’s second-largest cosmetics market in 2024.

Slowing sales undermine Sephora’s position

Sephora in China, once a powerhouse in the premium beauty retail scene, is now facing a dramatic reversal of fortune. By 2024, Sephora’s China revenues had plunged 19% to RMB 7.1 billion, with net losses ballooning to RMB 646 million, over four times higher than in 2023. Even flagship operations in Shanghai and Beijing failed to turn a profit. Just three years earlier, in 2021, the company had surpassed  RMB 10 billion in annual sales, underscoring how steep the fall has been.

Challenges from within and without

Sephora’s decline in China is largely due to fierce competition and shifting market dynamics. As the beauty market rapidly digitized, platforms like Tmall, JD.com, and Douyin emerged as dominant sales channels, offering convenience, competitive pricing, and broader selections. Chinese domestic brands captured over 50% of the market share in 2023, fueled by their strong digital presence and appeal to younger, internet-savvy consumers who value speed, novelty, and personalization. Since 2020, new beauty concept stores like Harmay (话梅) and The Colorist (调色师) have disrupted the retail landscape by emphasizing experiential shopping, including smaller trial-friendly products, immersive store designs, and creative promotions. In contrast, Sephora’s traditional reliance on physical retail has left it struggling to adapt in a market now driven by livestreaming, social media marketing, and instant delivery.

Consumers have also called out Sephora’s confusing positioning. Despite its high-end image, it never properly introduced trending overseas brands like Fenty Beauty. At the same time, it brought in domestic budget labels like Little Ondine, which many felt clashed with its luxury identity. “Are they high-end or discount? I don’t get it,” one RedNote post read. Others voiced similar confusion, saying Sephora now feels “all over the place” and “no longer worth the price.”

Compounding these external challenges are serious internal issues. In 2024, Sephora in China implemented large-scale layoffs and faced scandals involving the misuse of customer loyalty points by staff. These incidents revealed deeper problems in internal management and stability, weakening the company’s ability to respond quickly and effectively to market changes. A lack of team cohesion and clear leadership further undermined its competitiveness in a fast-moving environment. In January 2024, Maggie Chan, Sephora’s General Manager of Greater China, resigned after five years at the helm, and the company appointed Ding Xia, an ex-Nike executive with a strong track record in retail and digital transformation, as her successor. However, soon after, the company laid off approximately 120 staff, including senior managers, further signaling instability.

The cost of being overpriced

Adding to the difficulty is the broader contraction of the high-end beauty market in China. Retail sales of cosmetics in 2024 fell by 1.1% year-over-year to RMB 435.7 billion, marking the third consecutive year of decline. The high-end segment, in particular, where Sephora is heavily focused, shrank by 3%. In an environment of weakened consumer confidence and economic uncertainty, luxury beauty products, often viewed as non-essential, are some of the first to see cuts in spending. Global brands like L’Oréal, Estée Lauder, and Shiseido have all encountered similar growth challenges in China, highlighting the systemic nature of the downturn.

Meanwhile, Sephora’s perceived value proposition is also eroding. Once synonymous with authenticity and international luxury, Sephora is now viewed by many consumers as overpriced and underwhelming. Shoppers frequently note that the same products are often cheaper at brand counters or on official e-commerce platforms. For example, Lancôme’s Absolu Eye Cream costs RMB 1,200 at Sephora, while the same product sells for RMB 960 at a mall counter—a difference of RMB 240. This lack of consistent price advantage has driven consumers to purchase through more transparent and rewarding channels.

Sephora’s fight to stay relevant

Sephora has not ignored these challenges. In recent years, it has made efforts to localize and diversify. It launched the “Shine on China Made” campaign to support high-end Chinese brands, expanded its presence into third- and fourth-tier cities, and introduced more exclusive and private label products. In December 2024, it announced a partnership with Chinese beauty brand 优时颜 (Uniskin) to launch in 50 Sephora stores across the country an unprecedented move signaling its openness to domestic brands. Sephora in China has also expanded its footprint into over 100 cities, including previously untapped markets like Yichang and Ganzhou.

Despite these efforts, it was perhaps too little, too late. New retail competitors such as Harmay, Colorist, and Black Hole are offering more engaging, trend-forward experiences tailored to the next generation of Chinese beauty shoppers. With Sephora also retreating from other major Asian markets like Japan and South Korea, its future in China hangs in the balance.

A wake-up call for global luxury brands

Ultimately, Sephora’s decline in China underscores a broader lesson for international luxury brands

• Sephora’s decline in China shows that global prestige alone no longer guarantees success, where younger consumers prioritize innovation, authenticity, and affordability over brand heritage or global reputation.
• Product curation must have cohesion, mixing luxury with budget brands confused shoppers and eroded Sephora’s premium image, leading many to describe the store experience as incoherent or confusing.
• Sephora’s pricing strategy alienated value-conscious shoppers, as many products were significantly cheaper on brand counters or e-commerce platforms, eroding its perceived fairness and trust.
• The brand was slow to adapt to China’s digital-first retail landscape, where livestreaming, e-commerce, and social media drive purchasing decisions.
• New competitors offered immersive, trend-driven experiences that felt more fun, local, and fresh, qualities global brands must now embrace to stay relevant in China’s market.

Contact us for in-depth beauty market research in China

The cosmetics market in China is a rapidly evolving landscape, driven by the rising demand for high-quality products, innovative ingredients, and sustainable practices. Daxue Consulting offers specialized market research in China, providing a comprehensive understanding of the preferences, behaviors, and emerging trends shaping the cosmetics market.

Our Chinese consumer insights empower businesses to tailor their products and marketing strategies to resonate with local tastes and expectations. We offer consulting services that help you stay ahead of industry developments and achieve sustainable growth. Connect with us today to discover how our expertise can support your brand’s success in China’s thriving cosmetics market.

This article Sephora in China: Losing ground in a new era of beauty is the first one to appear on Daxue Consulting - Market Research and Consulting China.

This isn’t just influencer hype. It’s a structural shift in how brands are created, marketed, and scaled in the age of identity-driven commerce.

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From Rare Beauty (valued at over USD 2 billion) to Fenty Beauty (estimated at USD 3 billion), these brands are not just vehicles of celebrity influence, but are redefining category expectations, emphasizing inclusivity, and building brand equity well beyond their founders. Even newer entrants like Rhode, founded by Hailey Bieber, have taken off quickly, hitting a valuation of USD 1.44 billion within two years and securing a recent acquisition deal by e.l.f. Beauty.

But while this wave is reshaping the Western beauty landscape, it raises an important question: How are celebrity beauty brands doing in China?

Fenty Beauty in China: From star power to cultural relevance 

A brand with values that resonate

While many Western celebrity beauty brands remain absent from China’s official retail landscape, Fenty Beauty stands out as the clear frontrunner, not simply for its founder’s fame, but for how it has transformed that fame into a culturally resonant brand identity.

Rihanna’s brand didn’t just ride the wave of celebrity. From the start, Fenty built a compelling narrative around inclusivity, pioneering a “beauty for all” positioning that redefined industry standards and found relevance across global markets, including China. With its diverse shade ranges, high-quality formulations, and progressive brand message, Fenty has evolved beyond a celebrity label into a cultural movement.

This deeply resonates with a shift happening among Chinese consumers, especially Gen Z. Today’s young shoppers in China are less focused on what a brand sells and more on what it stands for. They’re highly individualistic, digital natives, exposed to global trends, and driven by self-expression and identity. They don’t want cookie-cutter products, but brands that represent them.

Although China may not have the same racial and skin tone diversity as Western markets, inclusivity as a brand value is still gaining traction, just in a different form. In the Chinese context, inclusivity often speaks to cultural diversity, body positivity, gender fluidity, and the celebration of individuality within a traditionally conformist society.

Take lifestyle brand Neiwai as an example: their “No Body is Nobody” campaign broke away from narrow beauty ideals by featuring women of all shapes, ages, and backgrounds, which is a bold move in a market historically dominated by homogenous, fair-skinned beauty norms. Similarly, beauty brand Into You has leaned into experimental color cosmetics and Gen Z subcultures, attracting consumers who want more than the conventional soft glam look.

For these consumers, inclusivity doesn’t have to mean offering 50 foundation shades. It means showing that a brand “sees them,” their identities, and their lifestyles. Fenty’s ethos of “beauty for all” translates meaningfully in this context, not through skin tone variety alone, but through an emotional message of being seen, heard, and accepted.

Cultural fluency as competitive edge

Fenty Beauty’s success in China isn’t just about brand values. It’s also about knowing how to engage with the culture authentically.

On May 20, 2024, China’s unofficial Valentine’s Day (520), Rihanna made an unannounced appearance at the “Fenty Beauty Alley” pop-up in Shanghai. She didn’t just show up, but rolled up her sleeves and made jianbing 煎饼 (savory Chinese pancakes) on-site, turning a long-running internet meme into reality.

Chinese fans affectionately dubbed her the “Shandong Queen,” a nickname born from humorous reinterpretations of her song titles: We Found Love became 潍坊的爱 (“Love in Weifang”) and Where Have You Been morphed into 威海油饼 (“Fried pancake in Weihai”). Her yellow cape dress at Cannes was even jokingly compared to a Chinese egg pancake.

Rather than ignoring the joke, Rihanna leaned in. She joined Douyin, went live, and played along, turning memes into meaningful moments. This shows that Fenty doesn’t just localize content; it localizes emotion and humor. It’s a masterclass in brand adaptation: transforming viral jokes into authentic brand-building moments that connect emotionally with a new market.

Retail strategy reflects long term commitment

Fenty’s localization is also evident in its channel strategy.

On May 27, 2025, Fenty opened its first concept store in mainland China, located in Shenzhen’s MixC World. Branded as the “Fenty Beauty Future Planet,” the immersive space features over 50 foundation shades, personalized shade-matching, interactive installations, and sensorial experiences.

This move isn’t just retail expansion. It signals Fenty’s commitment to becoming a cultural institution in China, not just a product on the shelf.

Why Chinese celebrity beauty brands struggle to scale

Meanwhile, Chinese celebrity beauty brands have yet to replicate this success, not for lack of effort, but due to fundamental structural challenges.

Over the past decade, many Chinese celebrities have launched their own beauty lines. But most focused on short-term gains, not long-term brand building. The typical formula? One hero product (usually a face mask), backed by fandom traffic, pushed through viral moments with little thought to brand architecture or identity.

Fan Beauty: A case study in limited breakthrough

One of the few relatively successful attempts is Fan Beauty, founded by actress Fan Bingbing in 2019. The brand reportedly achieved over RMB 1.1 billion in GMV in 2023.

However, brand recognition remains weak. Most consumers still associate Fan Beauty with Fan Bingbing personally, or just with face masks, rather than seeing it as a brand with independent values or aesthetic direction.

A recent product launch, a vitamin C face mask (RMB 198 for 5 sheets), sold over 200,000 boxes in 3 days. But the spike was triggered by a viral campaign born from a chance encounter with an amateur photographer on Xiaohongshu, later turned into a co-created marketing moment.

The buzz was clever, but also highlights a dependency on Fan’s image, rather than a sustainable, standalone brand universe.

The real barrier: Lack of beauty incubators in China

So why can’t Chinese celebrity brands build lasting momentum?

One key reason: China lacks the brand incubation infrastructure that powers many Western celebrity successes.

In the U.S., brands like Kylie Cosmetics (Seed Beauty) or Fenty Beauty (LVMH’s Kendo) didn’t scale through celebrity alone. These incubators manage everything behind the scenes, from creative direction and formulation to packaging, storytelling, and omnichannel distribution.

They allow founders to focus on brand vision, while ensuring operational excellence and scalability.

Most celebrity beauty in China relies on OEM/ODM factories focused on speed and efficiency, not storytelling, brand equity, or product innovation. Without a partner to translate celebrity IP into enduring brand DNA, most efforts stay shallow.

As one insider put it:

“The celebrity is the spark. But the incubator is the engine. Without one, the flame dies fast.”

Key takeaways: What celebrity beauty in China reveals

• Fame opens the door, and brand values keep it open
  Western brands like Fenty prove that while celebrity creates awareness, it’s brand vision, credibility, and cultural relevance that sustain growth.

• Chinese Gen Z doesn’t only buy fame — They buy identity
   Today’s Chinese youth are looking for brands that reflect their values and worldview, not just their idols.

• China’s missing middle: Incubation & brand craftsmanship
   The absence of strategic brand incubators in China leaves most celebrity beauty efforts without the infrastructure needed to scale with substance.

• The next era belongs to brands with soul
   To succeed in China, beauty brands, celebrity or not, must go beyond product. They must tell stories, embrace culture, and reflect the emotional aspirations of their consumers.

Contact us for in-depth beauty market research in China

The cosmetics market in China is a rapidly evolving landscape, driven by the rising demand for high-quality products, innovative ingredients, and sustainable practices. Daxue Consulting offers specialized market research in China, providing a comprehensive understanding of the preferences, behaviors, and emerging trends shaping the cosmetics market.

Our Chinese consumer insights empower businesses to tailor their products and marketing strategies to resonate with local tastes and expectations. We offer consulting services that help you stay ahead of industry developments and achieve sustainable growth. Connect with us today to discover how our expertise can support your brand’s success in China’s thriving cosmetics market.

This article Celebrity beauty in China: Why it’s working for western brands and not for Chinese is the first one to appear on Daxue Consulting - Market Research and Consulting China.

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The rise of quiet luxury in China

Unlike traditional luxury, which is charactered by big logos and status symbol pieces, quiet luxury focuses on discreet refinement through higher-quality material and minimalistic colors and style. Brands like The Row, Bottega Veneta, and Loewe ranked high on the Lyst Index of hottest brands in Q3 of 2024.

A trend started by the uber-wealthy that prioritize quality and control

In China, the pandemic-induced economic slowdown is at the origin of the quiet luxury trend, where consumers gravitate towards classic and timeless styles, as well as traditional Chinese aesthetics. For them, buying luxury products is not about flaunting their wealth but about personal satisfaction and appreciation for craftsmanship. At its core, quiet luxury is about restraint and exclusivity, as well as a kind of minimalism that is difficult to attain economically.

As the pandemic gradually receded, the trend of purchasing high-quality, timeless, and logo-free luxury goods began to seduce a broader audience beyond the ultra-wealthy. Luxury consumption is being redefined, especially by young consumers who are influenced by social media trends, seeking exclusive events and immersive brand interactions that have a strong emotional component. Luxury consumers are shopping from brands based on craftsmanship, and products that fall into the minimalistic yet refined category is often selected for their quality and design for daily wear. The most popular “quiet luxury” handbag brands on Xiaohongshu include Hermes, Loro Piana, and Toteme.

Leaders of the quiet luxury aesthetic

Many Asian Key Opinion Leaders (KOLs) and celebrities have embraced the quiet luxury style, such as Malaysian actress Michelle Yeoh, BTS’s Suga, South Korean actress Song Hye-kyo, and Thai actor Bright. Noteworthy examples from China include actress Angela Baby, socialite Teresa Cheung, and influencer Isabella Ye, with 4.2 million, 2.3 million, and 1.9 million followers on Xiaohongshu, respectively, as of July 3rd, 2025. On the platform, they flaunt their understated yet elegant style, redefining luxury and inspiring a broader audience of luxury consumers to adopt the style. For these celebrities, quiet luxury is not just about fashion; it’s a way to align their public image with values of authenticity and exclusivity, signalling a shift in what luxury means to consumers in China.

Source: Teresa Cheung (left), Isabella Ye (middle) and Angela Baby (right) adopted the quiet luxury aesthetic

The timeless allure of the Old-money style

The Old-money style, part of quiet luxury, focuses on high-quality and classic pieces rather than flashy logos. It exudes timeless elegance and sophistication, hinting at the wearer’s refined taste. This look signals status and heritage, appreciated by those familiar with this style.

The color palettes favored in the Old-money style are predominantly neutral, ranging from whites to soft beiges, greys, navy blues, and blacks.

Old-money style on social media

On Xiaohongshu, the hashtag #老钱风 (old-money style) has 2.7 million notes and over 1.1 billion views as of July 3^rd, 2025. On the platform, old-money style enthusiasts buy from brands like Loro Piana, Ralph Lauren, and The Row. Old-money-inspired posts frequently feature Western public personalities like Kelly Rutherford, known for her role in Gossip Girl, Princess Diana, and the Princess of Wales.

Source: Xiaohongshu @42898441214, Old-money style inspired outifts

In addition to elegant and well-tailored clothing, the old-money look incorporates clean and simple makeup. Jewelry pieces are typically made of diamonds, gold, or pearls. Finally, the hairstyle complements the overall aesthetic for a classic and polished appearance.

Clean-fit: Promoting simplicity in fashion on social media

Clean-fit, another facet of the quiet luxury aesthetic, prioritizes minimalist design and simplicity. It favors uncluttered clothing styles, clean silhouettes, and a color palette spanning from white to light grey, dark grey, and black. Much like the Old-money style, the clean-fit style is characterized by precision and quality craftsmanship.

Clean-fit on social media: the importance of having a good physique

On Xiaohongshu, #cleanfit boasts 1 million posts as of July 3^rd, 2025. The brands best known for the clean-fit style enthusiasts are Jil Sander, Theory, and Lemair, appreciated for their minimalist aesthetic and clean silhouettes. Gen Z is seen as the main follower of this trend, gravitating towards clean lines, high-quality fabrics, and simple designs.

Source: Xiaohongshu @42945994266, Clean-fit inspired 2025 summer outfits

Brown-hued chic: the Maillard style 

Maillard-inspired outfits revolve around layering different shades of brown, including tan, reddish brown, and warm yellow-browns, and pairing them with khaki or off-white hues.

The Maillard style initially gained popularity on Douyin, quickly gaining traction with over 6 billion views. Embraced by celebrities like Zhang Xiaofei and Yang Mi, the maillard style transcends clothing to encompass makeup as well. On Xiaohongshu, the hashtag #美拉德 (Maillard style) has amassed 3.7 million notes with over 1.5 billion views as of July 3^rd, 2025, underscoring the significant popularity of this style.

Source: Xiaohongshu @9777622938, Maillard styled outfits from 2024 and 2025

Navigating quiet luxury in China: adaptation and challenges

As quiet luxury purchases seduce Chinese consumers, both foreign and local brands confront the challenge of preserving their identity while embracing subtlety. A main challenge of selling quiet luxury lies in storytelling. It is not merely about selling simple and high-quality products; it is about creating narratives that resonate with consumers. Brands must go beyond product features and try to evoke emotions to foster connections with their audience. For instance, The Row, a fashion brand known for its understated elegance, crafts narratives that highlight their dedication to craftsmanship, cultural heritage, and quality materials, resonating with discerning consumers. They emphasize high quality fabrics and attention to detail both in-store and online, conveying the elegance of their brand across all fronts.

Source: Xiaohongshu, Some of the favorite brands of Maillard-style enthusiasts

Other luxury brands are adapting their strategy to stay relevant in the market by improving customer experiences, emphasizing craftsmanship, and sustainability due to consumers’ growing appreciation for high-quality, timeless products. Brands such as Louis Vuitton, Gucci, and Balenciaga are expanding their “logo-free” collection to cater to demand for subtlety. Consumers in China are also becoming more aware of sustainability and ethical sourcing of materials, paying more attention to slow fashion. Luxury brands that emphasize their commitment to environmentally friendly production, such as Klee Klee and Everlane, are gaining favor among Chinese consumers.

Quiet luxury in China: Redefining elegance and shaping the future of luxury

• Inspired by Western fashion and now thriving in China, the quiet luxury movement prioritizes timeless elegance over fleeting trends, reshaping luxury consumption.
• Unlike traditional luxury with bold logos, quiet luxury emphasizes refinement through quality material and minimalist designs.
• Characterized by high-quality, classic pieces and neutral color palettes, the old-money style signals refined taste and heritage.
• Clean-fit style, characterized by minimalist designs, garnered 1 million posts on Xiaohongshu.
• The Maillard style, embraced by celebrities like Zhang Xiaofei and Yang Mi, centers around layering different shades of brown. This style is exemplified by brands like Maxmara and Brunello Cucinelli.
• As brands navigate the changing luxury landscape, they face the challenge of balancing brand identity while embracing subtlety and crafting compelling narratives to resonate with consumers beyond conspicuous logos.
• Luxury brands adapt by expanding logo-free collections and highlighting craftsmanship and sustainability to meet the growing demand.

Gain a better consumer and trend understanding with our expertise

In China’s evolving luxury sector, where quiet luxury is gaining momentum, Daxue Consulting provides unparalleled expertise. Our in-depth market research and consumer insights enable the development of bespoke strategies, ensuring your brand aligns with the refined tastes of China’s affluent consumers. Collaborate with us to master the subtleties of China’s quiet luxury market and ensure your brand thrives in this sophisticated landscape.

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Innovative products that are not limited to blind boxes

The company’s offerings can be categorized into two distinct product lines: relatively low-end and high-end. When it comes to products, POP MART’s revenue surge was mainly fueled by innovation in product categories and co-branding strategy with top brands.

The low-end product line primarily features blind box dolls, figures, Ball-jointed Dolls (BJD), and various derivatives.

POP MART in China pioneered blind boxes and has established a strong reputation in this niche. However, the company is gradually moving away from its reliance on them. In POP MART’s 2024 semi-annual results meeting, the leadership team said that the current sales of blind boxes and figures have been reduced to 60%. In contrast, “new plush toys, blocks and other categories have shown very good sales results”. Additionally, the company plans to launch accessory shops to sell necklaces, rings, bracelets, among others, as merchandise extensions.

Source: Founder Securities, designed by Daxue Consulting, major categories of relatively low-end product lines in POP MART

The high-end product line, known as the “MEGA collection”, is strategically positioned as “the premier collector’s item for the youth”. It is further segmented into “MEGA100%”, “MEGA400%”, and “MEGA1000%”, reflecting a tiered pricing strategy from low to high. POP MART embraces both traditional Chinese culture and western trend culture to give consumers a refreshing feeling. For example, the Grand series launched the first ceramic material pop toy.

Moreover, the company also carried out cooperation with CLOT, Lamborghini, and other top brands in different industries. These initiatives have attracted the attention and resonance of consumers from different circles and achieved great success. The collection achieved remarkable revenues of RMB 681.5 million in 2023, representing 10.8% of the company’s total revenue.

Despite falling behind foreign brands, POP MART focuses on IP development

In the domestic pop toys market, international IPs are still far ahead of domestic IPs. In Double 11 in 2022 and 2023, the top IP series by sales were American or Japanese.

Besides the production of the pop toys like many other competitors, POP MART in China engages in all stages in the supply chain. It is especially involved in IP creation and operation, which is considered to be its greatest competitive advantage.

POP MART established a long-term co-operation with artists, so that they can take ownership of the original IP. So far, the number of its own IP is up to 40. There is a wide disparity in revenue generated by different IPs, with ten IPs generating more than RMB 100 million in revenue. The combined revenue from Molly and Skullpanda accounted for 42% of the total operational income generated by its own intellectual property. The brand also leverages co-branding in China with brands from various industries.

Labubu: POP Mart’s latest IP that conquered the world

Labubu is an elf character under “The Monsters” toy series, designed by Hong Kong-Belgian artist Kasing Lung. It debuted in 2019, but did not achieve commercial success in the early days. The “ugly-cute” (丑萌) character gained traction in late 2022, but its fame was bound in China. Its popularity skyrocketed in April 2024, when a K-Pop band, Blackpink’s member, Lisa, posted photos on Instagram with Labubu dolls. Other global celebrities such as Dua Lipa, Rihanna and Kim Kardashian were also seen dotting the toy, which made the IP viral worldwide.

Viral celebrity endorsement and social media hype had fueled a global frenzy over the IP. The success of Labubu shows that POP MART is working towards becoming an IP-centric toy manufacturer and trend setter. This drove a lucrative resale market for Labubu, where human-sized rare editions are sold for over USD 150,000. However, counterfeiting threatens Labubu’s value. As such, POP MART has created anti-piracy measures such as holographic seals and AI monitoring alongside trademarks and copyrights to protect the value of its IPs.

POP MART expands: More focus on the experiences around the products

In 2024, the company reorganized its business into four segments: IP incubation and operations, trendy toys and retail, theme parks and experiences, and digital entertainment. This showed the company’s shift to a conglomerate operation. Based on its own IP character, POP MART in China launched its first self-developed handheld game “Dream Home” to attract players of different ages. Moreover, the company also opened the first theme park in pop toy industry in China to provide consumers with an immersive experience. They also invest in the cultural entertainment sector like the animation film “Green Snake”. The diverse range of business activities has facilitated the creation of a robust revenue framework, resulting in an operating profit of RMB 1.23 billion in 2023. This is a remarkable 111% increase compared to the same period last year.

POP MART’s primary consumers and revenue by channel breakdown

Although the company may be perceived as catering for children, its primary target audience is young women, typically students or white-collar workers. Known as the Generation Z, they are aged between 16 and 28 years old.

Compared to indirect channels, brand-owned channels offer greater control and enable real-time access to market trends and consumer feedback. They contribute to 90% of the total revenue of POP MART in China. The brand’s offline channels have seen significant growth as people value more immersive shopping experiences. In the first half year of 2024, retail shops accounted for 46% of the total revenues generated by offline channels. Roboshops, specializing in blind box products, contributed to 10% of the revenues. These shops are strategically located in shopping malls, office buildings, airports, and subways. Even though this channel is the most convenient, it generates the least amount of sales revenue. This is because there is very little interaction: consumers just pay and get the item.

Online channels, including Bubble Boxer’s WeChat Mini Program, Tmall flagship shop, and Douyin, were the main contributors to the revenue mix in the first half of 2024. They accounted for the rest revenue of brand-owned channels.

Controversies surrounding blind box marketing in China

Despite being popular among consumers, POP MART’s collaboration with KFC in 2022 sparked controversy. Some customers hired “eating agents” and paid exorbitant prices to obtain the figurines. Chinese authorities criticized this, describing it as an extreme form of hunger marketing that encouraged impulsive buying and food waste.

Moreover, the quality of blind box toys has become a serious concern in China. In a Blind Box Consumption Survey report released by the Sichuan Consumer Rights and Interests Commission in 2022, more than three-quarters of the 1,425 respondents reported quality problems in the products. Also, four out of five respondents claimed experiencing obstacles when trying to return or exchange them.

China’s state media, People’s Daily, insisted on stricter controls over the sales of blind-boxes and trading cards to schoolchildren under eight years old. The editorial, which was released on 20th June 2025, demanded measures such as age verification upon payment for these toys and explicit parental approval during online transactions. This is to prevent children from cultivating the habit of gambling and spending excessively on toys such as mystery boxes or cards.

Young people’s new obsession: POP MART

• As a pioneer in the Chinese pop toys market, POP MART has never settled for the status quo. For its lower-end product line, it maintains a high frequency of product innovation, expanding categories based on blind box concepts. In its higher-end product line, POP MART skillfully blends Eastern and Western cultures, allowing young consumers to appreciate the beauty of art.
• We often perceive companies in the cultural entertainment industry as easily imitable and surpassable. However, POP MART stands as an exception. By developing collectible figures, designing games, constructing theme parks, and launching a series of marketing initiatives, it has established an IP empire with significant competitive barriers.
• POP MART’s success serves as a reminder to other pop toy companies that offline channels still matter. Generation Z, as the primary consumer group, values the purchasing experience, particularly when it comes to retail stores owned by pop toy brands.

Learn about 10 mistakes Chinese brands make when going overseas

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Importantly, 2025’s 618 was the first big sale after China’s call to end the price competition among major platforms, prompting simpler discounts and more rational consumption rather than bargain-hunting. In past years, consumers dreaded complex “满减” thresholds, cross-store coupon stacking, pre-sale deposits, and other tricks. This year, Tmall led with an “官方立减” (official discount), and JD.com likewise advertised “simplified gameplay” that involved more direct subsidies. This simplicity lowered decision-making costs, and as a result, users spent less time strategizing and more time actually buying.

How 618’s GMV growth signals a shift toward content commerce

Tmall retained the largest market share, accounting for roughly half of 618’s GMV, and JD.com was second with roughly 19.3% share, both platforms’ GMV grew 9-10% compared to last year. Douyin, known as TikTok in China (Douyin vs TikTok), surged to No. 3 platform in 618 sales, tying Pinduoduo in transaction volume, driven by the rise of livestream and short-video commerce. Douyin’s 618 GMV grew by an estimated 15.2%, which is the fastest among major platforms.

Pinduoduo, ranked #4, stuck to deep “百亿补贴” discounts on essential goods. Kuaishou, another video-commerce platform, ranked #5 with a smaller share but still double-digit growth around 10.6% compared to last year. Notably, content-driven commerce (Douyin and Kuaishou) contributed over 22% of total 618 GMV, underscoring the rise of alternative e-commerce channels.

The above chart shows that 2025’s “618” evolved into a six-week-long campaign with major platforms each running 39-day promotions but taking different strategic approaches. JD.com broke the event into six tightly timed waves to sustain consumer excitement and drive repeated traffic spikes. Tmall followed a more structured format with a presale phase and two main sale rounds, aiming to optimize logistics and inventory planning. Pinduoduo, known for its price-sensitive user base, skipped formal phases in favor of continuous coupon drops to maintain a high-urgency and low-price appeal. Meanwhile, Douyin and Kuaishou, platforms that focus on livestreaming, ran shorter 37-day campaigns.

The rise of China’s domestic brands at 618

Home appliances were the standout category, with about RMB 1.101 trillion in sales during the event. This was supported by many discounts, government subsidies and “trade-in” options that prompted consumers to upgrade to smart, high-end appliances.

Beauty and skincare ranked next at RMB 432 billion, a 65% increase from the previous year, as Chinese domestic brands such as Proya and Hanshu gained popularity by offering quality at attractive prices. Household cleaning products also saw RMB 233 billion in sales.

Within top categories, there are many leading domestic brands. Appliance brands such as Midea, Haier, and Xiaomi dominated sales rankings on Tmall, JD, and even Douyin. In beauty, local skincare and cosmetics brands outperformed, and consumers showed growing preference for products with natural ingredients and proven efficacy. The emphasis on value and quality helped “国货” (domestic brands) expand market share in 618, a trend noted across appliances, beauty, and other sectors.

How consumers prioritize essentials and value

Unlike the 618 promotions of years past, 2025’s event felt “calmer” for many shoppers. Social media and news coverage of 618 were relatively less, and some consumers weren’t even aware the festival had started until well into the cycle. Analysts attribute this to promotion saturation: with over 100 e-commerce sale events a year in China, discounts are now “month by month, even daily,” making any single festival less of a novelty.

Consumers this year showed a clear preference for practical, high-value purchases. Core keywords were “cost-performance” and “essentials,” with staples and daily goods seeing robust growth. Indeed, some noted that 618’s savings on certain products “weren’t even as good as a few food delivery coupons”, underscoring how deal-savvy and selective buyers have become. Overall, this more rational mindset led to a better consumer experience that fewer felt tricked or exhausted by the process compared to earlier years of complex promotions.

618 taps new demographics in 2025

Interest in 618 grew at the margins of age groups. Young adults (18–30) increased their engagement, with their 618-related online activity share rising 2.5% to 29.5%. Even more notably, senior shoppers (51 and above) showed a 3.3 point jump in interest, reaching 19.5% for 618. This indicates that marketing efforts and subsidy programs successfully drew in more Gen-Z and older consumers in 2025.

In terms of geography, platforms had many buyers from lower-tier cities after giving promotions and subsidies, expanding the user base beyond saturated megacities.

What drove 618’s record growth in 2025

• China’s 2025 618 festival generated RMB 8.556 trillion in GMV, up 15.2% YoY. The campaign stretched over six weeks, the longest in history, and incorporated other holidays to maintain consumer attention.
• Simpler discount structures like Tmall’s “official markdowns” and JD’s “easy gameplay” replaced layered promotions, reducing buyer fatigue and decision-making time.
• Tmall retained its lead with ~50% GMV share, followed by JD.com at ~19.3%. Content-driven platforms (Douyin and Kuaishou) accounted for over 22% of total GMV. Moreover, these platforms took different strategic approaches to their 39-day (or 37-day) campaigns
• Home appliances led all categories with RMB 1.101 trillion in sales, driven by trade-in programs and government subsidies. Beauty and skincare followed at RMB 432 billion (+65% YoY), powered by rising trust in local brands like Proya and Hanshu.
• Domestic brands ranked top across categories, with consumers favoring value, quality, and natural ingredients, helping “国货” (Guohuo) expand their 618 market share.
• 618 felt “calmer” to many shoppers in 2025, with lower social media buzz and a growing sentiment that discounts were less novel. Saturation from year-round promotions led consumers to shop more rationally and selectively, prioritizing everyday essentials and cost-performance.

This article Overview of China’s 618 2025 results: the longest 618 ever is the first one to appear on Daxue Consulting - Market Research and Consulting China.

With the rapid adoption of GenAI technology, the accelerated development of IoT devices, and government subsidies, China’s consumer electronics market is poised for continued growth in 2025.

China’s smartphone market in 2025

Government subsidies stimulate consumer demand

Government subsidies for electronics have been a key driver of growth in China’s smartphone market. The most recent subsidy program was launched on January 8, 2025, offering discounts of up to 15% for specific tech products. The maximum discount per item is RMB 500 (approximately USD 68). The program covers smartphones, tablets, smartwatches, and smart bands priced under RMB 6,000 (USD 820). However, high-end models such as foldable and flagship phones are excluded.

As a result, Xiaomi, which has a large number of low-end models, became the biggest beneficiary of the subsidy program. In contrast, Apple was not able to benefit from this initiative, as most of its phones (including the best-selling Pro models) are priced above the subsidy threshold. A small number of mobile phones that meet the subsidy restrictions, such as some models of iPhone 15/16. However, these subsidies are only available through certain channels, further limiting the effectiveness of the subsidy policy on Apple products.

China’s smartphone market performance in 2025

In the first quarter of 2025, the Chinese smartphone market continued the growth momentum seen since 2024. The segment achieved a total shipment volume of 70.9 million units, marking a year-on-year increase of 5%. Overall, the market showed a fragmented landscape, with no single brand holding more than 20% market share.

Among these, Xiaomi and Huawei were the biggest winners, with their shipments increasing by 18% and 40% year-on-year, respectively. On the other hand, Apple’s smartphone shipments in China declined by 9% compared to the previous year, making it the only major smartphone manufacturer to experience a drop in shipments.

GenAI and foldable smartphones: Long-term growth drivers

However, while the national subsidy program for consumer electronics introduced by the Chinese government has led to some demand for device upgrades in the short term, its effect is more of a temporary boost rather than a structural driver of growth. For the Chinese smartphone market, the long-term growth drivers remain technological advancements, particularly the application of GenAI in smartphones and the development of foldable phones.

With the rapid development of large-scale AI models, smartphones equipped with GenAI have gradually become a new growth point in the Chinese smartphone market. According to IDC’s research, by 2024, shipments of AI smartphones with on-device GenAI under the USD 1,000 price range will reach 35 million units, marking a year-on-year increase of 250%. GenAI will drive the transformation of smartphones into AI-powered devices, enhancing experiences across multiple scenarios such as entertainment and mobile office. By 2027, AI smartphones will account for over 50% of the Chinese market.

In fact, starting from 2024, many smartphone manufacturers have already begun exploring related technologies. On October 29, 2024, the “AI reshaping system applications” were announced by Xiaomi 15, including AI writing, speech recognition, and subtitle features. The following day, Honor launched the Magic7 series, which features the Honor AI assistant YOYO, capable of learning and recognizing user behaviors, analyzing and understanding user intentions, and automatically executing relevant tasks. OPPO, on the other hand, has partnered with Microsoft and Google, and its Reno12 series and the next-generation Find X series will integrate the Gemini AI large model, offering an AI toolbox with features such as copywriting generation and recording summaries.

Huawei dominates China’s foldable smartphone market

Foldable smartphones are another growth hotspot. In 2024, the revenue of China’s foldable smartphone market is expected to reach RMB 39.181 billion (USD 5.4 billion), with projections indicating it will reach RMB 83.557 billion (USD 11.5 billion) by 2030, with a compound annual growth rate (CAGR) of over 12% during this period. Huawei has already gained a leading position in this field. In 2024, Huawei’s two products, the Mate X5 and Pocket 2, received widespread acclaim in the market. In the first quarter of 2025, Huawei continued its strong momentum, capturing 76.6% of the Chinese foldable smartphone market, the highest market share in the sector.

Although the foldable smartphone market is still considered a niche market, accounting for only about 3% of China’s smartphone market, significant improvements in technology are enhancing foldable smartphones in terms of thickness, hinges, weight, battery life, and camera quality. Notably, the weight and thickness of book-style foldable phones are now approaching those of traditional bar phones. This makes them more convenient for most consumers to use. With the improvement in software and hardware integration and the expansion of use cases, the foldable smartphone market is expected to achieve sustainable growth. Thus, the competition among related manufacturers will become more intense.

Smart home appliances: Policy and tech drive growth

Another industry benefiting from the Chinese government’s subsidies for consumer electronics is the smart home appliance sector. In recent years, China has implemented a series of policies to promote the development of the smart home appliance industry, such as the “Rural Revitalization Plan (2024-2027)”, the “Action Plan to Promote the Trade-in of Consumer Goods”, the “County-Level Commercial Three-Year Action Plan (2023-2025)”, and the “Several Measures to Promote the Consumption of Electronic Products”. The implementation of these policies has greatly stimulated the prosperity and consumption upgrade of the smart home appliance market.

In China, smart home appliances refer to household appliances that are equipped with technologies such as the Internet of Things (IoT), artificial intelligence (AI), and big data, enabling smart control, autonomous learning, and interconnectivity. Currently, with the arrival of the home appliance replacement cycle and the growing focus of Chinese home appliance manufacturers on the ecological chain, smart home appliances are evolving from “single-product intelligence” to “whole-house intelligence.”

The common smart home appliance types and functions

Source: AskCI Consulting Co., Ltd., designed by Daxue Consulting, Common smart home appliance types and functions

Subsidies have proven to be effective in fueling growth in China’s consumer electronics market

Subsidy policies for consumer electronics have long been considered one of the effective measures to promote China’s economic development. In fact, as early as the end of 2007, following the global financial crisis, the Chinese government used fiscal measures to subsidize the purchase of home appliances for rural residents in order to expand domestic demand. This policy continued until January 2013 and yielded good results for China’s consumer electronics market.

The new round of subsidy policies, which began in the second half of 2024, has similarly had a significant growth effect on the home appliance market. Data from the China National Research Institute of Industry shows that in 2024, the shipment of smart robotic vacuum cleaners in China reached 5.4 million units, a year-on-year increase of 6.7%. In the fourth quarter, stimulated by the “national subsidy” policy, shipments reached 1.75 million units, marking a year-on-year growth of 28.2%. Analysts from the same source forecast that in 2025, the shipment of smart robotic vacuum cleaners in China will reach 5.658 million units, and China’s smart home appliance market will reach a scale of RMB 790 billion (USD 110.7 billion) by 2025.

From single products to whole-home smart appliances: Intensifying competition among domestic appliance brands in China

Domestic brands are the preferred choice in China’s home appliance market. Taking the highly competitive air conditioning market as an example, in 2024, China’s air conditioner shipments are expected to reach approximately 102 million units, a year-on-year increase of 5.86%. The total shipment value for the year is estimated to be around RMB 271.5 billion (USD 37.55 billion), with the top five brands in the market all being domestic brands.

With the development of smart home appliance technologies, competition among Chinese home appliance companies is shifting from individual products to competition within the product ecosystem. For instance, Gree Electric plans to open a new chain of stores named “Dong Mingzhu Health Home” nationwide starting from March 2025, with plans to eventually open 10,000 such stores across the country. As pointed out by Gree Electric, these “Dong Mingzhu Health Home” stores aim to showcase the company’s “healthy living” concept and represent a strategic shift from product manufacturing to comprehensive health services.

In contrast to Gree, China’s other two major appliance giants, Midea and Haier, have chosen to leverage AI technology to build an ecosystem of their home appliance products. In 2023, Midea launched its human-centered intelligent system, which integrates a central intelligent hub, three major super terminals, four appliance systems, and numerous intelligent scenarios to achieve synergy between home appliances through human-centered AI cloud computing. Haier, on the other hand, introduced HomeGPT, a self-developed domain-specific model, enabling deep interaction between the brand’s home appliances and consumers. Moreover, during Haier’s 2025 ecosystem conference, the company announced its initiative to develop household service robots to replace approximately 80% of domestic chores.

Emerging brands exploring the smart home appliance market: Xiaomi’s ambitious goals

In addition to the well-established major brands that have already secured a foothold in China’s consumer electronics market, younger, emerging brands are also actively exploring this market. A representative of this trend is Xiaomi, a Chinese tech company. In November 2024, Xiaomi began construction of its smart home appliance factory in the Wuhan East Lake High-Tech Development Zone, completing the structural topping within just 80 days. Xiaomi claims that the first phase of this factory, which includes six sub-factories and over 100 laboratories, will begin mass production of the company’s self-developed air conditioners by the end of 2025.

Xiaomi has ambitious plans for the smart home appliance market. In March 2025, Xiaomi co-founder Lu Weibing stated on the Chinese social platform Weibo that Xiaomi’s air conditioner sales target for this year is to rank third in the domestic market, with plans to become a leading air conditioner brand within the next five years.

Foreign competitors turn to cooperation to stay competitive in China’s consumer electronics market

To counter the competition from Chinese home appliance companies, Samsung and LG, two Korean companies that have long been competing with each other, have started cooperation in the field of smart home appliances. The two companies plan to allow each other’s products to be added to their respective home appliance remote control applications to improve consumer convenience. Samsung and LG respectively operate smart home remote control applications “SmartThings” and “ThinQ”, which originally only allowed the addition of their own products, but will be able to add each other’s products in the future.

KBS analysis pointed out that through cooperation, both parties will be able to achieve a win-win situation. Samsung Electronics can transform its advantages in the field of smartphones into a driving force for the increase in home appliance sales. At the same time, LG, which has withdrawn from the smartphone market, will be able to win over Samsung smartphone users and expand the user base of home appliance products.

Subsidies and AI trends that are driving China’s consumer electronics market:

• Affected by policy subsidies, China’s smartphone market continues to prosper. Local brands like Xiaomi and Huawei have become the biggest beneficiaries of the subsidies.
• Smartphones and foldable phones equipped with GenAI have become the growth hotspots in China’s mobile phone market.
• China’s home appliance market is continuing to expand, and competition is gradually becoming systematized.
• Chinese traditional home appliance giants such as Gree, Midea, and Haier are competing in health products and smart home appliances.
• Xiaomi is showing great ambition in the smart home appliance market.

This article How subsidies and AI are fueling China’s consumer electronics market in 2025 is the first one to appear on Daxue Consulting - Market Research and Consulting China.