The key facts

  • The personal luxury market in mainland China fell 18–20% in 2024 and another 3–5% in 2025, while the secondary market grew 15–20% (Bain & Company).
  • LVMH attributed the decline in organic sales in fashion and leather goods to 'slowing demand in China'; Louis Vuitton closed five stores in mainland China in two years.
  • Louis Vuitton's trademark lawsuit against Molly Tea triggered online backlash; Molly Tea intends to appeal.

A shift in consumer sentiment

Spending more used to be seen as a sign of status; now, according to Chinese shoppers, finding a good deal matters more — and this shift is weighing on European luxury brands. Chinese consumers, who accounted for about a third of global luxury spending and brought LVMH and Hermès billions of dollars, are increasingly turning to the secondary market and domestic brands. This is happening against the backdrop of an economy that grew 4.5% year-on-year in the third quarter but suffers from weak domestic demand.

Market figures and store closures

According to Bain & Company, after falling 18–20% in 2024, the personal luxury market in mainland China shrank by another 3–5% in 2025, while secondary luxury grew 15–20%. Insight & Info Consulting estimates sales of secondhand luxury goods in 2025 at 38.4 billion yuan (5.1 billion euros), with a forecast of growth to over 100 billion yuan (13.3 billion euros) by 2030. LVMH linked the decline in organic sales in its fashion and leather goods division in the third quarter to 'slowing demand in China'. Louis Vuitton closed five stores in mainland China over two years, including a chocolate boutique in Shanghai, and Galeries Lafayette closed its Beijing flagship in May.

Voices of shoppers and analysts

At the Super Zhuanzhuan secondhand luxury store in Shanghai, where customers are given black gloves, 24-year-old dance teacher Yuan told AFP: 'People used to compare who spent more, but now everyone looks at who managed to buy at a better price.' Freelancer Phoebe Ma, 24, noted that the LV monogram is 'outdated' and suits her mother's generation, while zoomers prefer trendy Korean brands. Chen Luo, head of China consumer research at Bank of America, noted the shift from luxury as a status symbol to 'self-identity, individuality, experience, quality, emotional value and cultural relevance', as well as the uniqueness of China's digital ecosystem, in which foreign brands 'have to work very hard to stay afloat'.

The lawsuit and its consequences

Louis Vuitton won a trademark infringement lawsuit against the Chinese beverage chain Molly Tea over a four-petal floral motif resembling the house's monogram. Molly Tea said it intends to appeal. The lawsuit sparked online criticism after Chinese users and state media suggested the motif derives from ancient traditional Chinese patterns. Echo Wang, a 31-year-old marketing specialist, called the situation 'a bit absurd' and considered the lawsuit 'inappropriate'. LVMH management called intellectual property 'an absolutely key asset' but acknowledged that the scandal 'had a negative impact'.

Looking ahead

Analysts stress that China remains important to the global luxury industry. According to Chen Luo, 'China will remain an important market, although over the next two to three years it may not be a growth engine', and luxury spending usually recovers along with the economy, since affluent groups are among the first to benefit from an upturn.