How Chinese Luxury Brands Grew While the Market Shrank

In 2025, China’s personal luxury market shrank by 3–5%, according to Bain’s January 2026 China Personal Luxury Report, following a 17–19% contraction in 2024. Over those same two years, Laopu Gold, a Beijing heritage gold jeweller founded in 2009, grew revenue 221% to RMB 27.3 billion (3.5 Bn euro) and ranked second in mainland China luxury revenue in 2025, ahead of Hermès and behind only LVMH, according to Frost & Sullivan data cited by 36Kr. Mao Geping, a premium beauty brand built around its founder, one of China’s best-known makeup artists, grew 30% at a gross margin of 84.2%.

Songmont, a leather goods label founded in 2013 by former Google designer Fu Song, posted 90% online handbag sales growth in the first three quarters of 2025, while Gucci’s online handbag sales in China fell more than 50% over the same period, according to BigOne Lab data analysed by Bloomberg.

The reflexive explanation in European boardrooms has been that Chinese consumers traded down. The numbers do not support it. Laopu raised prices several times through 2025 and early 2026, including an average increase of around 27% in February 2026, and demand accelerated. Mao Geping prices its hero products at parity with Dior and Armani. ICICLE, a Shanghai-based womenswear and menswear brand founded in 1997, retails its cashmere coats between RMB 8,000 and 20,000 (1000-2500 euro). These are not discount alternatives. They are full-priced luxury, and they grew through one of the worst stretches in modern Chinese consumer history. The brands share four operating choices that European luxury, by structural commitment, cannot easily copy.

Laopu Gold sells 24-karat gold pieces at a fixed retail price set by Laopu, not pegged to the daily gold spot. Most Chinese jewellers, including Chow Tai Fook and Lao Feng Xiang, price by weight against the metal. Laopu’s model decouples retail price from commodity volatility and treats price increases as a brand signal rather than a cost pass-through. The brand maintained a 37.6% full-year gross margin in 2025 despite a sharp rise in gold prices, returning above 40% after its October price adjustment. Chinese business outlet 36Kr documented multiple price hikes through 2025 and into 2026, with the steepest at around 27% in February 2026. Each one was followed by longer queues outside stores.

European luxury used to operate this way. Hermès still does, in select categories. But price increases lose their signalling power when they become routine. Hermès has raised Birkin prices four to six times in three years on some models. Laopu's price increases, by contrast, land as scarcity signals because the brand runs 50 stores, not 5,000.