After nearly three years of volatility, China’s luxury market is showing early signs of stabilization. By the fourth quarter of 2025, investment conversations resumed, long-paused projects returned to planning, and brands began reassessing how — and where — to place their bets in China once again.
In December, Louis Vuitton, Christian Dior, Loro Piana and Tiffany each unveiled flagships in Beijing’s Sanlitun district. Beyond the capital, Chopard traveled north to Harbin, staging an ice-culture pop-up aligned with the city’s winter tourism narrative (and underscoring a growing sensitivity to regional context). In Shanghai, Buccellati staged its first major brand exhibition in China, The Prince of Goldsmiths: Buccellati Rediscovering the Classics, from December 7, 2025, to January 5, 2026, tracing the maison’s Italian artistic and artisanal heritage through historical jewellery and silverware that foregrounded founder Mario Buccellati’s legacy, craftsmanship and evolution.
Photo: Courtesy of Chopard
But beneath the recovery lies an uncomfortable truth: China has not “come back”. It has changed shape. The consumers who once powered explosive growth are fewer in number, sharper, and more skeptical. Digital behavior has accelerated past Western benchmarks. And the industry’s most entrenched operating assumptions — from VIC hierarchies to emotional retail theatrics — are being structurally challenged.
The question for global luxury is no longer whether China will recover, but whether brands are equipped for what China has become. In 2026, winning China will require a fundamentally different playbook.
The end of the old VIC era
Contrary to pre-Covid expectations of broad-based luxury expansion, the past two to three years have seen consumption power in China concentrate sharply among VICs. As household confidence weakened and asset markets underperformed, ordinary consumers pulled back, focusing attention on those higher-value clients.
Yaok Research Institute estimates that China now has around 4.46 million high-net-worth individuals with assets above RMB 10 million ($1.4 million), down 13% from 2019. Even so, their economic gravity has increased markedly: in 2024, they accounted for 28% of total consumption, delivered three-quarters of consumer-goods industry profits, and underpinned almost 90% of luxury sales.
The implication is stark. China is no longer an incremental market (where luxury companies can grow simply by capturing new customers and expanding market share in an unsaturated environment); it is now a zero-sum market, where one brand’s gain is another brand’s loss. Luxury brands must extract growth from a shrinking, increasingly rational elite. And that elite is changing from within.
“High-value consumers are becoming smarter and more restrained,” Zhou Ting, dean of Yaok Research Institute, notes. “They are shifting from conspicuous consumption to self-oriented consumption. Sport, leisure, and lifestyle-driven choices are replacing overt status display.”
This evolution is mirrored on Alibaba’s invitation-only luxury e-commerce platform Tmall Luxury Pavilion, where the classic VIC remains critical — but no longer singular. “We’re seeing resilience across different consumer cohorts,” says Anny Liu, the platform’s general manager. “New demographics are emerging while classic VICs remain important. The landscape has become multi-dimensional.”
Liu further adds that younger consumers, in particular, are reshaping the logic of luxury engagement. Rather than buying into brand hierarchies, they move fluidly across categories — heritage maisons, niche designers, sport-luxury hybrids, and lifestyle labels — guided less by logos than by personal aesthetic preference. “They’re willing to pay a premium, but only when there is emotional resonance that aligns with their identity,” she explains.
Yann Bozec, co-founder and managing director of the consulting firm YB Stratis, and former president of Tapestry Asia-Pacific, takes this argument further, challenging the very premise of VIC segmentation.
“The problem with VIC is that it’s an industry-defined classification, not a consumer reality,” he says. “In many brands, the revenue structure no longer justifies it. In ultra-high-end categories, everyone should be a VIC by definition. The label loses operational meaning.”