The China newsletter | January 2025
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Welcome to our January China Newsletter! Join us as we unpack the trends, insights, and stories that are driving this fascinating evolution in China.
?? ECONOMY
China’s Economic Outlook: Facing Slower Growth and Rising Challenges
China’s luxury sector is at a crossroads as economic slowdown (+4.5%), a real estate crisis, and declining consumer confidence hit sales, with HSBC cutting growth forecasts to +2.8%. Youth unemployment surpassing 20% has shifted preferences toward experiences over luxury goods, while the secondhand market grows by 20%. Local brands gain ground, and the rise of "luxury shame" reshapes purchasing behaviors. As global giants struggle, adapting to China’s evolving landscape is more essential than ever.
??TECHNOLOGY
Xiaohongshu Gains Momentum Amid TikTok Uncertainty
As TikTok faces a potential U.S. ban, Xiaohongshu ("RedNote") is emerging as a rising alternative, topping the U.S. App Store charts. Originally a Chinese social commerce platform, it blends user-generated content and e-commerce, attracting young, affluent consumers. Luxury brands like Loewe, Gucci, and Dior are already leveraging its influence. With its unique mix of authentic reviews and cultural relevance, Xiaohongshu presents a key opportunity for brands navigating China’s evolving digital landscape.
?? TRAVEL
CNY Travel Boom & the Rise of the Silver Economy
China’s New Year travel season is breaking records, with 9 billion trips expected over 40 days. The surge highlights China’s growing transportation infrastructure, the expansion of C919 aircraft, and rising international tourism fueled by visa-free access. Meanwhile, the silver economy—led by affluent retirees—is reshaping domestic travel. With 300 million people set to retire in the next decade, brands are adapting, from Tmall’s senior-focused livestreams to Tencent’s content featuring older influencers. As demographics shift, the travel industry is becoming a key driver of China’s economic future.
?? CHINESE NEW YEAR COLLABORATIONS
CNY Travel Boom & the Rise of the Silver Economy
As the Year of the Snake approaches, global luxury brands are embracing Chinese craftsmanship in their Lunar New Year campaigns. From Asahi Superdry and Hennessy partnering with Chinese creatives to Burberry and Loewe showcasing traditional artistry, these collaborations reflect a deeper cultural authenticity. Harrods’ Labelhood pop-up in London and Rémy Martin’s limited-edition designs highlight the fusion of heritage and innovation. By blending tradition with modernity, brands are strengthening ties with Chinese consumers and elevating cross-cultural storytelling.
?? CONSUMER
China’s Evolving Watch Collecting Culture: From Passion to Investment
Watches are no longer just accessories; they’ve become investment assets. In China, luxury timepieces have shifted from symbols of status to objects of collectible value. As tech makes traditional watches less relevant, new collectors, influenced by social media, seek out limited-edition models for their resale potential. Brands like Rolex and Patek Philippe dominate, while MB&F gains popularity with discerning local enthusiasts. As a new generation of investment-savvy collectors emerges, China’s watch culture is becoming more sophisticated and informed.