china / Economy

Had the truce not been extended through Nov. 10, US tariffs on Chinese goods would have jumped to at least 54% starting on August 12.

Once fashion’s most reliable growth engine, the Chinese market is shifting as consumer spending cools and shoppers with more choice than ever gravitate toward savvy domestic brands. Opportunities for international players are still plentiful, but the old formula for succeeding in China is no longer relevant. Brands need a new game plan to stand out.

The key question is whether the drop is due to a weakening economy or a shift in consumer perception towards luxury items as mere commodities.

Amid China’s market struggles, a broader trend of shifting consumption towards services and unique experiences is emerging, despite ongoing challenges like modest income growth and declining home prices.

While travel to Europe remains muted, Chinese shoppers are flocking to Singapore, Thailand and other Southeast Asian destinations where fashion retailers are hoping Lunar New Year marketing investments will pay off.

Despite the country’s protracted property crisis, deflationary pressures and other economic headwinds, its domestic luxury market is expected to grow 4 to 6 percent in 2024, outpacing both Europe and the US.

Brands looking to invest in new developments and rapidly changing shopping districts across China’s major cities are scrutinising locations harder than before the economic slowdown.

As the country’s economy moves into deflationary territory, manufacturing output declines and a real estate crisis worsens, some consumers are becoming increasingly cautious.