Louis Vuitton closes five China stores as secondhand luxury market booms

Western luxury brands are struggling in mainland China as consumers shift to secondhand goods and homegrown labels. Louis Vuitton has closed five stores in two years, while the country's pre-owned luxury market grew 15 to 20 per cent in 2025.

French luxury house Louis Vuitton has closed five stores in mainland China in the past two years, including a chocolate boutique in Shanghai, while Parisian department store Galeries Lafayette shut its Beijing flagship in May. The retreat comes as Chinese consumers, once among the world's biggest spenders on Western luxury goods, increasingly turn to the secondhand market or upstart domestic brands.

Chinese buyers previously accounted for around a third of worldwide luxury spending, earning firms such as LVMH and Hermes billions of dollars. But belt-tightening has forced brands to rethink their strategies. Mainland China's personal luxury market contracted another 3 per cent to 5 per cent in 2025, after plunging as much as 19 per cent in 2024, according to consultancy Bain & Company. LVMH recently blamed a "slowdown in demand in China" for a drop in organic sales in its fashion and leather goods unit in the third quarter.

Meanwhile, China's secondhand luxury market exploded 15 per cent to 20 per cent in 2025, Bain & Company estimated. Domestic consultancy Insight & Info Consulting said total sales reached 38.4 billion yuan (US$5.7 billion) in 2025, and forecast it could top 100 billion yuan by 2030.

At Super Zhuanzhuan, a new two-storey warehouse-style store in central Shanghai, shoppers wear black gloves to handle the luxury handbags, belts and jewellery on display. "People used to compare who had spent more," dance teacher Yuan, 24, told AFP. "But now everyone compares who got a better deal and spent less."

Customer Phoebe Ma, 24, said her mother's generation formed a "deep-seated impression that Louis Vuitton was the absolute best and most prestigious", but added: "I just feel that the monogram is dated. It suits my mother's generation, but Gen Z would rather buy trendy Korean brands."

Chen Luo, head of China consumer research at Bank of America, said shoppers were moving away from associating luxury solely with social status and towards "self-identity, distinction, experience, quality, emotional value (and) cultural relevance". "China's retail landscape is very digital/social media driven, and China's digital ecosystem is also very unique," Luo said. "Foreign brands should work very hard to stay relevant in this context."

Western brands also face growing cultural and legal friction. LVMH successfully sued Chinese beverage chain Molly Tea for trademark infringement over a four-petal floral pattern resembling its monogram, but the lawsuit sparked an online backlash after internet users and state media pointed out the motif's roots in ancient Chinese patterns. LVMH management called its intellectual property "an absolute key asset", but admitted the furore had "had a negative impact".

Analysts stress that China remains vital for the global luxury industry. "China will still be an important market, although it may not be a growth engine in two to three years," said Chen Luo, head of China consumer research at Bank of America. "Luxury spending is normally rebounding in sync with the economy, as usually the wealthy class will be among the first to benefit from economic recovery."