Western luxury labels feel strain as China's second-hand market surges
Luxury giants such as Louis Vuitton and Galeries Lafayette are closing stores in China as Chinese shoppers shift toward pre-owned goods and domestic brands.
China's post-pandemic slowdown is prompting Western luxury brands to retreat, with Louis Vuitton closing five mainland stores and Galeries Lafayette abandoning its Beijing flagship. A Bain & Company report shows the personal luxury segment contracted another 3-5% in 2025 after a 19% dip the previous year, while the second-hand market expanded between 15% and 20% in the same period. Domestic resale shop Super Zhuanzhuan requires shoppers to wear gloves, highlighting the new consumer mindset that values deals and personal identity over brand prestige.
Experts from Bank of America and Bain note that Chinese shoppers now seek cultural relevance and experience, and that foreign firms must adapt to the country's unique digital ecosystem. Legal friction also rose after LVMH sued Molly Tea over a pattern, sparking online criticism. Analysts stress that despite the slowdown, China will stay important for luxury sales, though recovery may take two to three years.
Why it matters
The shift to resale and local brands threatens Western luxury profits and reshapes China's consumer landscape.
How this story developed
- Oct 7 US luxury credit-card purchases decline for third month as midterms approach
- Oct 18 LVMH lost its position as the CAC 40’s largest company.
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