Secondhand shopping and younger consumers reshape a once-reliable growth engine.
SHANGHAI
European luxury brands are facing a significant shift in China’s consumer market as younger shoppers increasingly favor secondhand products, domestic labels and purchases that offer greater perceived value. The transformation is challenging a business model that relied for years on China’s expanding affluent population to sustain global sales growth.
The slowdown has become visible in corporate earnings. French luxury conglomerate LVMH reported a 5% organic revenue decline in its fashion and leather goods division during the third quarter of 2026, citing weaker business conditions in China. The company’s overall performance remained more resilient, demonstrating that pressures differ across luxury categories.
According to consultancy Bain & Company, mainland China’s personal luxury goods market contracted by approximately 18% to 20% in 2024, followed by a further decline of 3% to 5% in 2025. During that second year, the secondhand luxury market expanded by an estimated 15% to 20%.
These contrasting trends suggest that interest in premium products has not disappeared. Instead, some consumers are changing where they purchase them, how much they are prepared to spend and what they expect from established brands.
Local consultancy Insight & Info Consulting estimated China’s secondhand luxury sales at 38.4 billion yuan in 2025. It projects that the market could exceed 100 billion yuan by 2030, although that remains a forecast rather than a guaranteed outcome.
The shift is particularly visible among younger consumers. Some members of Generation Z increasingly associate fashion purchases with personal identity, product quality and cultural relevance rather than the recognition attached to traditional European logos.
Secondhand boutiques in Shanghai illustrate the change. Customers can purchase previously owned designer handbags, jewelry and accessories while comparing prices and assessing product condition. Resale channels also offer access to luxury goods without paying full retail prices.
Established companies are adjusting their physical operations. Louis Vuitton has closed five locations in mainland China over the past two years, while Galeries Lafayette shut its flagship Beijing store in May.
Economic conditions reinforce the pressure. China’s economy expanded by 4.5% year on year in the third quarter of 2026, but growth was supported heavily by exports while domestic consumption remained relatively subdued.
The challenge is not exclusively financial. European brands also face stronger competition from Asian labels and a digital retail environment in which cultural perceptions can change rapidly.
A trademark dispute between Louis Vuitton and Chinese beverage company Molly Tea illustrates these tensions. The French brand prevailed in litigation involving a floral design, but the case prompted criticism online. Molly Tea has indicated that it intends to appeal.
China nevertheless remains an important market for European luxury companies. Its consumer base, retail infrastructure and accumulated purchasing power make a complete strategic retreat unlikely.
The more immediate question is whether brands can adapt their product strategies and customer relationships without undermining the exclusivity that supports premium pricing.
For European luxury groups, future growth may depend less on assuming continued Chinese demand and more on understanding how Chinese consumers themselves are redefining luxury.
Beyond the Hype, Reality Matters.