
Last May, at the Metropolitan Museum of Art’s annual Costume Institute Benefit, the guests were told to dress “in honor of Karl” — a tribute to Karl Lagerfeld, the creative director of Chanel from 1983 until his death in 2019. The Met Gala, as the event is more commonly known, is the biggest event of the year for fashion. Hosted by Anna Wintour, the 36-year editor of Vogue magazine, it is a veritable who’s who of celebrities, and honoring the event’s annual theme can make or break a fashion reputation. Designers compete fiercely to “win” the red carpet, but a theme devoted to an icon like Karl Lagerfeld — himself the embodiment of European luxury — presented a special challenge.
Cardi B speaks to Vogue livestream host La La Anthony during the Met Gala, May 1, 2023. Credit: Vogue
Still, according to Vogue readers, there was one clear winner of last year’s event: Cardi B, the rapper, who wore a sculptural gown inspired by a classic Chanel bag paired with an embellished corset and a tie to honor Lagerfeld’s signature style. Cardi B was labeled ‘Queen of the Met Gala’ for the look, but on Chinese social media, she was given a different title —“honorary party member ”— for a separate achievement: Putting a Chinese designer on the map.
“It’s from a designer called Chen Peng,” the rapper said in a Vogue livestream, dragging out the name of the Chinese creator of her gown in her distinctive accent.
Chen was reportedly approached by Cardi B’s stylist just a few months earlier, after his Paris Fashion Week debut, where his use of goose down to create bold silhouettes cemented his reputation as the “haute couturier of puffer jackets.” To create Cardi B’s custom look, which consisted of 600 camelia petals adorning the skirt, Chen said he worked around the clock with his team in Shanghai. According to Chinese state media, his success was part of a trend “showing China is no longer just a strong clothing manufacturer. The country is becoming a creative superpower in the design world.”


Left: A sketch of Chen Peng’s design for Cardi B’s Met Gala dress. Right: The final Chen Peng dress, worn by Cardi B during the 2023 Met Gala. Credit: Chen Peng via Xiaohongshu, Cardi B via Instagram
Chen is indeed part of a new cohort of young Chinese designers that are making a splash on the global stage. Robert Wun made history last year as the first Hong Kong designer to present at the Paris Haute Couture Week, and in March, four stars graced the Vanity Fair Oscars Party in his gowns.1The stars were Lizzo, Chloe Bailey, Alexandra Daddario, and Catherine O’Hara. On the press tour for her blockbuster movie “Dune 2,” Zendaya — herself a queen of the red carpet — recently wore a jumpsuit by the designer Dawei, who founded his eponymous label in 2016 after stints at Balenciaga and John Galliano. Rui Zhou, whose provocative bodysuits have drawn a cult following among stars like Solange Knowles, Megan Thee Stallion and Dua Lipa, has even inked collaboration deals with brands like Victoria’s Secret and Adidas.


Robert Wun’s Spring 2024 Haute Couture show, January 2024. Credit: FF Channel via YouTube
“We don’t want to just show a collection with a bunch of phoenixes or dragons that decorate the clothes,” Chen, 33, said at a summit in October. “We are ready to define a really contemporary Chinese aesthetic because we have that confidence now.”
Not all of these designers have established their headquarters in China, but they are all China-born, and analysts say they represent a potential disruption to the European-centric luxury market. High-end fashion is one of the last consumer industries that Chinese brands have yet to fully crack. From electric vehicles and fast fashion to social media and e-commerce, Chinese companies have in recent years upended legacy businesses.
“For every category of product, there’s a Chinese brand which is often more nimble, more agile and understands the market better. And that’s why they’re eating into their Western competitors,” says Chloé Reuter, a founding partner of the luxury consultancy Gusto Collective.
With a similar revolution threatening the luxury market, Western brands are being forced to reckon with a new reality in the world’s second largest economy.

For much of the past two decades, designers have counted on the ferocious appetite of Chinese consumers to bolster their bottom lines. China’s share of the global luxury market jumped from 1 percent in 2000 to 33 percent in 2018, overtaking all other nationalities, according to Bain & Co. Not even the pandemic seemed to slow things down: sales of personal luxury goods in the country nearly doubled from 2019 to 2021, reaching a record 471 billion yuan ($65.9 billion).2Luxury brands, however, saw an overall dip during the pandemic because Chinese buyers were no longer traveling and shopping abroad.
The size, the growth and the confidence of the middle class has been fueling the luxury industry in China for the last 15 years. And last year, that middle class said, ‘I’m not feeling so good about my income and my wealth.’
Jacques Roizen, Shanghai-based managing director of the marketing agency Digital Luxury Group
But as China’s economy enters a more uncertain phase, many luxury brands can’t rely on China like they used to. Luxury sales have slowed down, especially among the middle class, which accounts for half of brands’ revenue on average, says Jacques Roizen, a Shanghai-based managing director of the marketing agency Digital Luxury Group.

“The size, the growth and the confidence of the middle class has been fueling the luxury industry in China for the last 15 years,” he says. “And last year, that middle class said, ‘I’m not feeling so good about my income and my wealth.’”
Many high-end retailers, analysts say, are now recalibrating: halting investment, freezing store openings, and diversifying their global portfolio to adjust their exposure to China. In one survey by Agility Research & Strategy, a Singapore-based luxury consulting firm, 70 percent of luxury executives said they were adopting a “wait-and-see” approach towards China.
“The age of easy growth is over,” says Thomas Piachaud, head of strategy at the luxury data company Re-Hub. “Just because your product is on the shelf doesn’t mean it will sell.”
Analysts are quick to point out that luxury is by no means dead in China. In fact, Bain predicted that by 2030, Chinese luxury consumption will reach 35–40 percent of the world’s total. The number of millionaires in China is also set to double between 2022 and 2027.
A CCTV video on China Fashion Week which kicked off in Beijing on March 23, 2024. Credit: CCTV
Capturing a piece of the pie, however, could become far more difficult for luxury brands. While China is still the “Mecca of luxury,” says Reuter, Western brands are going to have to “throw out the playbook.” Not only are Chinese consumers slowing down, relatively speaking, they are also starting to show a massive shift in consumer attitudes.
According to a survey by the consulting firm McKinsey, 49 percent of Chinese consumers think local brands are of “better quality” than foreign ones, compared to just 23 percent that think it’s the other way around. This trend is set to continue as Generation Z is even more open to homegrown brands and niche labels, as another study by the consultancy Oliver Wyman found. Growing national pride has also led Chinese consumers to embrace Chinese heritage and aesthetics in a phenomenon known as guochao, or China Chic. Reuter notes that China is “demanding a shift in understanding what luxury is.”
The question now is if designers like Chen Peng can turn that shift into a business model.

A CHINESE HERMÈS
The promise of homegrown designers disrupting China’s luxury market is not new, of course.

In 2010, Hermès founded Shang Xia, a luxury brand that it hoped would tap into China’s fast-growing upper middle class. Patrick Thomas, then-chief executive of Hermès Group, reportedly got the idea after meeting a French-educated Chinese designer named Jiang Qiong-er, who was directing Hermès’s window displays in China at the time. Jiang had studied interior design at the Decorative Arts School in Paris and came from a long line of artists: her grandfather, Jiang Xuanyi, was a contemporary painter and her father, Xing Tonghe, a famed architect.
Impressed by her passion for craftsmanship, Thomas named Jiang as Shang Xia’s chief executive and creative director.
“The idea is to bring the Hermès philosophy to China, to create a Chinese Hermès,” Thomas told AFP in 2010.

Hermès spared no expense in getting Shang Xia off the ground. In 2013, Shang Xia opened its first overseas boutique in Paris, right across the street from an Hermès store in the upscale, touristy neighborhood of Saint-Germain-des-Prés. With over 6,000 pieces of ceramic tile, the store was a work of art in itself, much like Shang Xia’s products, which ranged from Mongolian cashmere shawls and a $2,600 bamboo tea set, to a $15,700 rocking chair inspired by Ming-dynasty furniture.
While Hermès built Shang Xia from scratch, other high-end retailers saw the same potential to expand their footprints in China and made strategic acquisitions. In 2008, the Swiss Richemont Group, which owns Cartier and Van Cleef & Arpels, took over the Hong Kong fashion house Shanghai Tang. In 2012, Kering, which owns brands like Gucci, Balenciaga, Bottega Veneta and Yves Saint Laurent, bought Qeelin, a Chinese fine jewelry brand.3Back then, Kering was known as PPR.
“Everybody has been waiting for a homegrown brand to really take off on the luxury side,” says Renee Hartmann, co-founder of China Luxury Advisors. “They wanted to be early in that process and make the right bet.”

Few of these bets have paid off, however. For much of the 2010s, items “Made in China” still had a reputation for being cheap, inferior or counterfeits — even in China. Although some European brands (e.g., Prada and Balenciaga) have quietly moved parts of their supply chains to China over the years, the idea of a Chinese-made luxury item hardly evoked desirability.
“The traditional definition of luxury is about having a heritage around a specific product or method of craftsmanship,” says Piachaud. “And often that heritage requires 50, 100 or 150 years, especially for very high-end brands.”

To appreciate the stigma, consider the fact that just eight years before Cardi B’s triumphant turn in Chen Peng, the Met Gala devoted an entire theme to China’s influence on fashion. Yet, on the 2015 red carpet for “China: Through the Looking Glass,” very few guests actually opted to wear Chinese designers. (Rihanna was a notable exception, wearing a dramatic, yellow gown by couturier Guo Pei.)
Jiang Qiong-er, from Shang Xia, understood what Chinese designers were up against. “Shang Xia is not a financial investment project, it is a cultural investment project,” she told the Financial Times in 2012. “Other business projects, the life of the project is five years or 10 years, at Shang Xia the dream is 100 years, 200 years.”
Unfortunately for Jiang, Hermès appears to be losing patience with that dream: In 2021, it sold a majority stake in Shang Xia to Exor, the Dutch Group that owns Ferrari as well as The Economist, and Jiang stepped down as CEO and creative director. The extravagant shop in Paris shuttered the same year, as did another flagship store in the Peninsula Hotel in Beijing. (Neither Hermès nor Jiang Qiong-er responded to requests for comment.)
Other Western bets on Chinese brands have also fizzled out. Richemont sold off Shanghai Tang in 2017, and Cha Ling, a Chinese beauty brand launched in 2016 by the LVMH Group, the parent company of Louis Vuitton and Dior, closed all its brick-and-mortar stores in 2022.
Fabio Becheri, an independent consultant who previously spent two decades as a marketing director for Gucci, notes that Chinese luxury brands — whether foreign backed or not — will never get anywhere if they can’t tell a more compelling story.
“They come with very strong product offerings,” he says. “But we know nothing about the brands, their values, their missions and what they stand for. There is still a long road ahead for them to be competitive.”
The biggest hurdle, adds Yishu Wang of marketing agency Half a World, “is trying to convince China’s consumers that they are buying into the future and the vision of the brand, rather than its history.”
TURF WARS

Europe’s shrewdest luxury brands, meanwhile, are leaning into their histories. In December, Louis Vuitton organized an elaborate stunt in Shanghai to promote the launch of its classic Speedy bag as “reimagined” by its new creative director, Pharrell Williams. The French brand constructed a two-storey-tall version of its duffle bag and floated it atop a barge in the Huangpu river along the Bund.
The new bag is the exact same as the classic except offered in bright colors, but releases like this seem to work remarkably well in China.
Despite the consumer slump and global slowdown, the LVMH Group posted a record revenue of $93.5 billion in 2023, led by 31 percent growth in Asia. (LVMH, which did not respond to requests for comment, does not break its revenue down by country.) As chairman and CEO Bernard Arnault repeatedly stressed in an earnings call in January, growth for growth’s sake is not the goal: “The goal is desirability. People must desire the brand.”
Twenty years ago, [Chinese customers] just wanted to get a nice bag and show off. But now some of them have become perhaps the most demanding [consumers] in the world.
Jing Zhang, editor-in-chief of digital publication Jing Daily
This is especially true as Chinese consumers look for long-term value in uncertain times, notes Sophie Coulon of China-based marketing agency VO2 Asia Pacific. “Brands that stick to the iconic, timeless pieces [like Louis Vuitton’s Speedy bag] are doing better compared to those who are more trend-oriented and bank on the flavor of a season,” she says.
Indeed, as Gucci’s eccentric maximalism fell out of favor, Kering reported a 4 percent decrease in revenue in 2023. It announced last month that it is expecting an even steeper decline of 10 percent in the first quarter of this year, as Gucci’s revenues plummeted particularly in Asia. The announcement wiped $8.6 billion off Kering’s market value.

Besides swings in trends, brands are also adjusting to the changing behavior of their customers. Many European brands are opting to prioritize high-net-worth individuals who represent a small percentage of consumers, but who are more resilient to economic uncertainty than aspirational, entry-level buyers.
For instance, some brands are raising prices despite protracted consumer pessimism in China in order to drive the exclusivity demanded by well-heeled customers. In China, where high-end European leather goods are already sold at a 25–30 percent markup, the price of a classic Chanel bag has more than doubled in the past five years. With another price hike across all markets last month, some Chanel purses now cost more than a Chinese electric vehicle.
Some Western brands are also eschewing mass marketing tools they previously relied on, like pop-up events, preferring instead to pamper their top customers with highly-elevated experiences, including customized gifts, exclusive access to products and lounges, and even private events across the globe. Louis Vuitton flew a handful of its VICs (“very important customers”) to Paris for its recent fashion show, where it arranged one-on-one photo opportunities with the Chinese celebrities it has hired as brand ambassadors. Zegna — another company that recorded extraordinary performance last year, including a 20.5 percent jump in revenues from China — invited several of its loyal clients to Oasi Zegna, an Italian nature park on the tip of the Alps, where they toured its wool mill and dined with Anna Zegna, the granddaughter of Ermenegildo Zegna.

“Twenty years ago, [Chinese customers] just wanted to get a nice bag and show off. But now some of them have become perhaps the most demanding [consumers] in the world,” says Jing Zhang, editor-in-chief of Jing Daily, a digital publication that covers luxury consumer trends in China.
Chinese brands can’t yet emulate this level of service, but they are winning in other ways on their home turf.
For starters, retail in China is omnichannel, and Chinese brands are considerably more digitally savvy than their competitors. Douyin, the Chinese version of TikTok, for instance, has integrated e-commerce into its app and is emerging as a critical platform for brands that want to establish their online presence or tap into its 700 million user base. According to a survey by Deloitte China, 39 percent of consumers have made luxury purchases via content platforms like Douyin. (Instagram, meanwhile, is still struggling to convince U.S. and European users to shop on its platform.)
Chinese brands are also using social media to grow their reach, drive sales and manage customer relationships. Melt Season, a local fragrance label, for instance, launched in 2021 and sold online via WeChat for eight months, before it established its first physical shop. It has since drawn an undisclosed investment from Estee Lauder, which took a minority stake in the company in December.

“China has its own digital ecosystem,” says Coulon, “which means that it’s quite hard for brands that have their headquarters in Europe and the U.S. to really understand the market.”
Chinese labels are also taking advantage of their natural edge when it comes to cultural authenticity. In 2022, for instance, Dior was accused of appropriating Chinese culture with a $3,800 pleated skirt that some said resembled a mamianqun — a type of traditional clothing worn by women in the Ming Dynasty. Zhang Yan, an up-and-coming Chinese fashion designer, said it was a more serious offense than plagiarism. “By calling it their ‘hallmark design,’ Dior is misleading their customers around the world,” Zhang said in a video on Weibo.
It’s an area where brands have to tread carefully. Chinese consumers called Dolce & Gabbana racist in 2018, when it ran an ad featuring an Asian model struggling to eat pasta and pizza with a pair of chopsticks. Several years on, the independent Italian label continues to be spurned by Chinese retail sites and celebrities. Although many western brands have rushed to embrace Chinese elements under guochao, such as adorning their products with red and dragons for this lunar new year, “there’s always a risk of potential backlash,” says Reuter.
For now, however, many global brands have one distinct advantage over the domestic upstarts: the conglomerates behind them.
Ever since the 2000s, European luxury brands have relied on the deep pockets of just a few parent companies to succeed. The advantages of conglomerates are well-known; resources for splurging on marketing campaigns, for instance, or surviving through tough times such as a pandemic. But so far, the handful of ‘luxury groups’ that operate in China have been focused on acquiring or investing in foreign labels, not domestic ones. Lanvin Group, for instance, which was established by the Shanghai-based Fosun International in 2017, owns the Italian footwear brand Sergio Rossi and U.S. label St. John. Ushopal Group, a Shanghai firm that specializes in high-end beauty brands, owns stakes in a Japanese skincare label and acquired a French fragrance label, but just invested in its very first Chinese brand in January: a fragrance company called Document.
If more money flows to domestic brands, analysts say, the luxury market in China could change very quickly.
“If you go back 30 years ago, most of the brands that we think of today as luxury powerhouses were actually quite local, relatively small, and in many cases significantly underperforming financially,” says Daniel Langer, founder of Equite, a Los Angeles-based consultancy, adding that the era of consolidation between 2000 and 2010 transformed family-owned businesses into global power brands. The same could happen in China, he says.
Jillian Xin, a buyer with Labelhood, a Chinese platform for emerging local designers, agrees that everything is in place for a LVMH or a Kering Group to rise from China in the next ten years. But she notes that China’s luxury market could lose something in the process. Chen Peng’s generation of designers are making waves because they are notably more dynamic and unconstrained compared to European labels, which have been criticized for being too safe, too predictable and lacking in diversity.
“They’ve had the freedom to start their business on their own terms, without outside investment or interference, and are able to really design creatively,” she says. “And that’s success in itself.”

Rachel Cheung is a staff writer for The Wire China based in Hong Kong. She previously worked at VICE World News and South China Morning Post, where she won a SOPA Award for Excellence in Arts and Culture Reporting. Her work has appeared in The Washington Post, Los Angeles Times, Columbia Journalism Review and The Atlantic, among other outlets.