China’s Luxury Market Rebound 2026:
Opportunities and Risks for Foreign Brands

1. The Macro Picture: From Sharp Decline to “Moderate Growth”

Let’s start with the good news. After two painful years of contraction, China’s personal luxury market is finally stabilizing. In its 2025 China Luxury Report released in late January, Bain & Company — the consultancy whose numbers the global luxury industry treats as the benchmark — forecast that China’s mainland personal luxury market will return to moderate growth in 2026. The rebound is underpinned by a steadily expanding middle class, gradually recovering consumer confidence, and a fresh wave of domestic consumption-stimulus policies from Beijing.

The trajectory of the past two years provides important context. The market contracted a steep 17%–19% in 2024, its worst single-year performance in modern memory, as post-pandemic euphoria fully evaporated, the property downturn deepened, and Chinese consumers sharply cut back on big-ticket discretionary purchases. In 2025 the decline narrowed to 3%–5% — still negative, but a meaningful improvement — and Bain observed early signs of stabilization beginning in the third quarter, helped by stronger equity markets and a partial recovery in consumer sentiment. By year-end, domestic consumption accounted for roughly 65% of total luxury spending by Chinese shoppers, continuing a multi-year shift away from overseas “daigou” (proxy-buying) channels as brands tightened control over unofficial distribution.

Bruno Lannes, Bain’s Senior Global Partner based in Shanghai, described 2025 as a year of “readjustment” — a period in which Chinese shoppers became far more selective, favoring products that balanced quality, distinctiveness and practicality, and increasingly prioritizing experiences (travel, wellness, dining) over purely material goods. VICs (Very Important Clients, i.e. top-tier high-net-worth customers) remained the backbone of the market, while younger aspirational buyers delayed their entry into luxury.

For foreign brands that pulled back investment in 2024–2025, the headline “China returns to growth” is cause for cautious optimism. But as we will see, the 2026 China story is far more nuanced — and far more contested — than the China gold-rush narrative of the 2010s.

2. Category Winners and Losers: Jewelry Leads, Beauty Surprises

One of the clearest messages from Bain’s 2025 data is that the recovery is deeply uneven by category. Brands that assumed a uniform rebound across fashion, leather goods, watches and jewelry have been disappointed. Let’s look at the scoreboard.

Source: Bain & Company, 2025 China Luxury Report (January 2026).

Beauty stands out as the unambiguous bright spot. It was the only major category to deliver positive growth in 2025 (+4%–7%), and Bain noted it showed the strongest purchase intent across all customer tiers — from entry-level Gen-Z buyers to top VICs. The category benefits from relatively accessible price points (compared to a handbag or watch), fast replenishment cycles, and a thriving omnichannel ecosystem that runs from Tmall flagships to live-streaming and in-store beauty consulting.

Jewelry is the story to watch for 2026. Although it contracted slightly in 2025 (0% to -5%, a dramatic improvement on other hard-luxury categories), structural tailwinds are firmly in place: Chinese consumers’ long-standing cultural affinity for gold, a “value preservation” mindset that favors precious metals over logo leather goods, and the extraordinary breakout of domestic gold-jewelry brands (more on that in Section 4). Richemont — owner of Cartier and Van Cleef & Arpels — reported that its jewelry division grew 24% in the first quarter of fiscal 2026, with double-digit growth in Greater China, providing hard evidence that the jewelry cycle is turning.

By contrast, leather goods and watches remain under pressure. Years of successive price hikes have eroded the value perception of many European handbag lines; roughly half of Chinese luxury consumers now check resale prices on second-hand platforms before making a new bag purchase, effectively using the secondary market as a transparent “real value” benchmark. Watches face an even tougher structural challenge: younger consumers see less social-signaling value in a mechanical timepiece in the era of the smartwatch, while older collectors have shifted toward pre-owned and auction channels.

One more channel shift deserves a mention: online luxury sales surged 25%–35% year-on-year in Q1 2026 in China, according to Bain’s spring update. The country has decisively moved past the old “luxury must be bought in-store” dogma; brands that underinvested in digital flagships, WeChat mini-programs, and livestream commerce are now playing catch-up.

3. The Risks Lurking Beneath the Headlines

Any honest read of the 2026 China market must acknowledge that the recovery is fragile. Bain itself uses the word “fragile” to describe it, and Bruno Lannes has repeatedly warned that growth will vary widely by segment and brand. Several structural headwinds remain firmly in place:

Recent high-frequency data reinforces this cautious stance. In September 2026, Bernstein reported that July same-store sales across 25 major luxury brands in China fell more than 10% year-on-year, after several quarters of low-single-digit growth — a reminder that this recovery is not a straight line, and that episodic “false dawns” (late 2023, late 2024, late 2025) have been the pattern of the post-pandemic era.

4. The Guochao Wave: Chinese Brands Reclaiming Luxury

Perhaps the single most consequential structural change — and the one most underappreciated in Western boardrooms — is the rise of Chinese domestic luxury brands, powered by the guochao (“national tide” or “China chic”) movement. According to iiMedia Research, the broader guochao market reached 2.5 trillion yuan in 2025 and is projected to surpass 3 trillion yuan by 2028. Gen-Z consumers (born 1995–2009), the most culturally confident generation in modern Chinese history, are driving this shift, with 69.9% of Chinese luxury consumers telling a recent Deloitte survey that they want personalized, culturally relevant products — the highest rate of any major market globally.

Within luxury, two domestic brands have become unavoidable case studies.

4.1 Laopu Gold (老铺黄金) — The “Hermès of Gold”

Founded in Beijing in 2009, Laopu Gold (6181.HK) has become the most celebrated breakout story in Chinese luxury. The brand specializes in gu fa jin (古法金, “ancient-method gold”) jewelry: high-purity 24-karat gold pieces crafted using lost imperial-era techniques such as filigree (花丝) and chiseling (錾刻), drawing directly on Chinese cultural motifs rather than Western iconography.

The numbers are staggering. After listing on the Hong Kong Stock Exchange in June 2024, Laopu Gold saw its share price rise more than fifteen-fold over the following 18 months. Revenue reached approximately RMB 8.5 billion in 2024 (up 167.5% year-on-year) and reportedly soared further to around RMB 27.3 billion (~$39 billion) in 2025, with net profit growing 250%+. With just ~45 directly-operated stores, the brand is reported to generate over RMB 600 million in revenue per store annually — the highest sales-per-square-foot of any luxury brand globally. During the 2025 Tmall 618 shopping festival, Laopu Gold’s flagship store topped the entire gold category, with GMV exceeding RMB 1 billion.

In May 2026, the Yaoke Research Institute’s China Jewelry Luxury-ization Index Report formally classified both Qeelin (麒麟, though owned by Kering) and Laopu Gold as global-tier luxury jewelry brands — the first Chinese-headquartered brands to receive that designation. The report projected that by 2030, Chinese-style luxury jewelry will be a RMB 300 billion market in its own right.

4.2 ICICLE (之禾) — Quiet Luxury, Chinese Rooted

While Laopu Gold dominates the hard-luxury headlines, the soft-luxury story of the moment is ICICLE (之禾). Founded in Shanghai in 1997, ICICLE has built a devoted following among 25-to-45-year-old professional Chinese women with its minimalist, logo-light womenswear in natural fabrics (silk, cashmere, organic cotton), priced roughly from RMB 900 to over RMB 30,000. It has been called the “Chinese MaxMara” for its quiet-luxury, wardrobe-builder positioning. By 2025, ICICLE had surpassed RMB 3.5 billion in annual revenue across 270+ stores globally (including a flagship on Paris’s Rue Saint-Honoré), with a loyal customer repurchase rate of around 68%.

The most significant signal came in April 2026, when Kering — the French group behind Gucci, Bottega Veneta and Saint Laurent — announced a minority equity investment in ICCF Group (ICICLE’s parent company), pairing Kering’s craftsmanship and brand-building expertise with ICICLE’s deep local consumer insight. The deal marked a strategic inflection point: Western luxury groups are no longer just competing against Chinese brands — they are now investing in them, treating Chinese mid-luxury (“中奢”) as a distinct, investable strategic segment.

For foreign brands, the message is unambiguous: Chinese consumers — especially younger ones — are no longer willing to pay an automatic “international premium.” They are increasingly comfortable choosing domestic brands that offer comparable craftsmanship, stronger cultural resonance, more sophisticated digital engagement, and sharper price-to-value ratios. Foreign brands that still treat China as a distribution destination rather than a competitive, culturally distinct market are the most vulnerable.

5. A Practical Playbook for Foreign Brands in 2026–2027

Drawing together the macro data, category dynamics, risk factors and the guochao competitive wave, we see four non-negotiable priorities for foreign luxury brands operating in — or entering — China over the next 18 months:

6. The Due Diligence Imperative Before You Sign Anything in China

For foreign luxury brands, investment firms, law firms and licensing partners entering or scaling in China, the 2026 rebound brings a renewed wave of inbound opportunities — and an equally renewed wave of risk. The same market that can deliver double-digit growth in a hot category is also a market where distributors misrepresent their sales networks, where suppliers’ financial health can deteriorate quickly, where IP squatting remains widespread, and where opaque ownership structures can obscure beneficial ownership and political exposure.

Before signing a distribution agreement, a joint venture, a manufacturing contract, a trademark license or a M&A term sheet, smart operators do their homework through authoritative, on-the-record channels. That means pulling an official business registration record from the State Administration for Market Regulation (SAMR), verifying registered capital and ownership structure, checking for litigation, administrative penalties and abnormal-operation status, reviewing filed tax and financial records, and confirming that trademarks, patents and domain names are properly registered and unencumbered. For cross-border documents that will be used outside mainland China, that also means ensuring that powers of attorney, certificates of incorporation and board resolutions are properly notarized and apostilled under the Hague Convention framework that China joined in 2023.

This is precisely the work that ChinaBizInsight does every day for international clients. We provide independent, authoritative official enterprise credit reports, deep-dive custom due-diligence reports (standard, professional, and financial & tax editions), executive background and risk screening, intellectual property searches, Hong Kong / Macau / Taiwan company filings, and end-to-end notarization, legalization and Hague apostille services — all sourced directly from Chinese government registries and delivered in English. In a market as nuanced and fast-moving as 2026 China, signing a partner without verified intelligence is not courage; it is avoidable risk.

China’s luxury market is back on a growth path, but the easy wins are gone. Winning in 2026 and beyond will require sharper category choices, stronger cultural relevance, better digital execution, and — perhaps most importantly — partners you can actually trust. The brands that combine commercial ambition with rigorous local due diligence will be the ones that turn China’s rebound into durable, profitable growth.

References

1. Bain & Company, 2025 China Luxury Report, released 29 January 2026.
2. Bain & Company & Altagamma, 2026 Spring Global Luxury Market Study, released 28 June 2026 (bain.cn).
3. Yaoke Research Institute (要客研究院), 2026 China Jewelry Brand Luxury-ization Index Report, released 15 May 2026.
4. Morgan Stanley, China luxury market analysis, cited in Yicai / Chinese media reports, September 2026.
5. Bernstein, China luxury high-frequency tracker, 4 September 2026.
6. China Daily, “Shopping with your heart, not your head,” 9 June 2026; “Gen Z-fueled guochao trend,” 16 April 2026.
7. China Daily, “Kering eyes nation’s high-end lifestyle market” (ICICLE investment), 28 April 2026.
8. Laopu Gold (6181.HK) annual results 2024 and interim results 2025, via Hong Kong Stock Exchange filings.
9. iiMedia Research, guochao market-size data, 2025–2028 projections.