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Chinese brands are gaining influence, while Western brands can no longer take their privileged position for granted. Rachel Zheng, a journalist contributing to publications including Jing Daily and WIRED, and award-winning futurist and innovation strategist Louis Zheng witnessed this firsthand when they joined as expert guides on RetailDetail’s Wingzz retail tour last June. What is driving this shift? And what comes next?
Trust no longer assumed
For a long time a foreign brand did a lot of work for a Chinese consumer before the product did anything. It carried status. It carried emotion. It carried safety, because quality was assumed. And it carried functional trust. You didn’t have to verify any of it; the name did it for you. We wondered why that no longer works automatically.
And it’s not one brand picking up everything. Before, one foreign brand held several things a consumer cared about. Now each Chinese brand takes one of them and pushes it much further. This conversation started from one question: what did “foreign” do for a Chinese consumer, and who is doing that job now? Based on their conversation, Rachel Zheng and Louis Zheng see three shifts came out of it.
New homegrown brands
The next test for Chinese brands is how well they understand traditional culture, and how well they translate it into the modern.
Rachel: “Take status. In the past it was the logo, Coach and that kind of accessible luxury. Now there’s Songmont, which relies on a deep, integrated Chinese story. On Tmall’s Double 11 bag ranking, it took first place from Coach last November, after Coach had held it for five years. So it explains status in another way.
Louis: “You’re saying Songmont now outsells Coach?”
Rachel: “It overtook it on the ranking, yes. I should be careful, though. Coach’s Greater China revenue grew 38% last fiscal year, to about $1.4 billion, so it isn’t collapsing. A ranking tells you who owns the conversation, not who is bigger.”
Louis: “Coach’s voice hasn’t been loud these past few years, it seems.”
Rachel: “Right. And accessible luxury is very substitutable, because it was always selling a symbol.”
Rachel: “Take emotion. I looked into To Summer and DOCUMENTS. These are fragrance brands, and when Chinese brands do fragrance the threshold is actually quite high. Some raw materials are scarce, and perfumers take a lot of investment too.”
Louis: “From a perfumery angle, isn’t the upstream raw material made by the same few suppliers? That’s my understanding.”
Louis: “For all these brands, the raw materials come from a handful of suppliers, no?”
Rachel: “At the level of compounded fragrance, mostly yes. In 2021 four houses held about 55% of the global fragrance and flavour market. But some special materials are harder to find, and China has more than a thousand domestic fragrance companies, though mostly small.”
Louis: “So there’s still an R&D threshold?”
Rachel: “I looked into this, and yes, it’s real. The simplest example is chenpi, aged tangerine peel. As I understand it, To Summer built its own note around it and developed the material upstream. So domestic brands are developing things, and that gives them some specificity.
There’s also a kind of invisible professional endorsement in foreign brands. L’Occitane is known for its Provence lavender story and its hand creams. People know the story, they like the professionalism, and lavender itself calms you. To Summer and DOCUMENTS rely on an Eastern direction instead. Their branding says Eastern, and the fact that they can make it at all shows some control over materials and perfumers. I think that gives consumers emotional comfort too, and a stronger sense of meaning.”
Louis: “How is that different from a foreign brand like L’Occitane?”
Rachel: “It’s not something borrowed. They made it themselves. I think it’s in the branding and the packaging. They have a sense of ritual. Fragrance is about ritual, about stillness. And the European mainstream is mostly candles, hand cream and skincare. Stick incense isn’t a category there the way it is here.”
Louis: “Here’s a difference I notice, from the consumer’s point of view: inward versus outward. When foreign brands speak, it’s about how I can look healthier, more beautiful. Stick incense and ritual face inward. They return to culture, to spirit, the inner core of the Chinese. Songmont keeps saying it comes from Shanxi, which is one of the brightest points in the history of Chinese civilisation. Recently they were at Paris Fashion Week with an exhibition, telling the story through a pagoda shape.”
Rachel: “I think their understanding of tradition isn’t the traditional culture we’re familiar with. It’s a modern translation.”
Louis: “I think that’s right. It isn’t a pile of symbols. In plain terms, it uses Western methods of communication, marketing and brand narrative to build something with a Chinese cultural core.”
Rachel: “That’s why it doesn’t get a backlash from domestic consumers. Songmont’s woven edge is like the layered baskets at a wet market. They say the inspiration is the grottoes, with their hollows and ridges. It isn’t rigorous, but there’s some metaphor in it. The pocket bag’s shape, they say, comes from Shanxi eaves, and the two ends fold together with magnets, which they also trace to Shanxi architecture.”
Louis: “Foreign luxury houses do something similar. Louis Vuitton also says where its symbol comes from. The core is the same, but you’re describing a new dimension. They use very modern marketing, communication and branding methods to build a brand. I wouldn’t even call these methods ‘foreign’. Is Songmont’s story different at home and abroad?”
Rachel: “I assumed so, because the Paris show was built around the Shanxi pagoda. Looking closer, I’m less sure. At home the brand calls its core design language Eastern aesthetics and Central Plains culture, and its stores are built from landscape metaphors, mountains and pines. In Paris the tower’s six faces map onto six product lines, with folk crafts like the tiger-head hat on show. The source looks the same, shown in different forms. And the founder said this year they deliberately didn’t bring “Chinese symbols.” I couldn’t find a domestic exhibition to compare, so I’d leave it open.”
Louis: “The West’s fascination with the East runs on strong symbols, and the pagoda is very much one.”
Rachel: “Translation can also fail. Consumers complain about texture, quality and durability, and some say its bags resemble Hermès and Loewe designs. One analysis argues its price rose faster than its product strength. A story doesn’t replace the product.”
Louis: “And it gets harder. When everyone is talking about Chinese aesthetics, how do you find your own niche? Your brand has to carry one value point, and stress the part that’s different. That will matter more and more for Chinese brand on this route.”
New consumption
Chinese consumers used to chase foreign brands for status. More of them now ask how a brand can strengthen their own persona, and choose by their own values.
Louis: “Something else I find interesting is why foreign luxury brands aren’t doing well here.In the past, Chinese consumers chased foreign symbols as signs of status. Today more people ask how to use brands to build their own persona. The centre is no longer the brand. It’s “me”, and what “I” choose to buy and interact with. That’s a big difference. I don’t think many foreign brands fully understood. Maybe that’s a cultural barrier.
And a foreign brand telling Chinese culture will never do it better than a Chinese brand. So it seems unsolvable.”
Rachel: “I think we need to unpack it. What does each one stand for? Functional trust, for example.”
Louis: “Nike, of course. People don’t much agree with what it’s doing now. And for luxury, function is secondary. You don’t buy a luxury bag because it’s useful.”
Rachel: “Then there’s safety. In China right now, everyone’s wallet is held tight.”
Louis: “Or savvy. Chinese consumers have seen a lot.”
Rachel: “They’ve seen every consumer trick. Bags and clothing aren’t as hot as before. I talked to an analyst who gives clients investment advice on luxury. In China, she said, jewellery holds its value, and the strongest part of the sector is hard luxury. That’s why Laopu Gold has been so popular. It’s hard currency. The craft inside a watch is complex. With jewellery, where do your stones come from, and how high can you take the price?
That story is being tested now. By analysts’ estimates, Laopu’s second quarter fell sharply from its first. Gold fell about 16% over the quarter, the second quarter is a slow season, and a rush before a February price rise pulled demand forward, so the cause is muddy. The open question is whether the cultural premium holds when gold stops rising.
On leather: Louis Vuitton still prices in the ten-thousands, Coach in the thousands. If a Chinese brand is about as good on quality, then a more mature consumer, especially in first- and second-tier cities, might try Songmont. It has some halo overseas too, so they might think it’s not bad.”
Louis: “So what does that leave foreign brands?”
Rachel: “Look at SIGMA, the Japanese camera brand we took everyone to see. Its Shanghai showroom has a visible repair bench, a wall of lenses and a gallery. The gallery works with local artists, and the storytelling is handed to the local team, who have the freedom to do it. They also found communities that match their DNA, with a tech aesthetic. From what I saw, they did events with an electronic-music equipment brand called Teenage Engineering. Honestly I always thought it was a Chinese brand.”
Louis: “That story sounds familiar. A visual brand and a sound brand, that’s interesting.”
Rachel: “And I think their localisation works for two reasons. They found communities and people who can express their values. And they give the local team trust and the freedom to do it.”
Louis: “That’s a niche, obsessive community. But the trust-the-local-team point is basically an industry consensus. If we’re going to discuss it, we need to take it further.”
Rachel: “But luxury brands haven’t done this at all.”
Louis: “Because they’re at the top. They know, it’s not that they don’t. They know and are unwilling.”
Rachel: “If you can’t give trust to the local team, you can’t do it. Look at Tiffany. In September a customer in Chengdu who had spent over 200,000 yuan posted that her Mid-Autumn mooncake gift box had been sent to someone else, and when she asked, the answer was sorry, I’ll think of you next time. Then the make-good was a bag of loose taosu from a local pastry shop, handled one-on-one, basically asking her not to spread it. She found that very unprofessional. She wanted a manager to respond properly, and she posted the whole back-and-forth. Tiffany’s China retail head later apologised by email.
I think it shows weak training. At the sales level everyone is nervous about making mistakes, so they placate the customer and wait for instructions from headquarters. That’s slow communication and a top-down PR fix. Mistakes are human. The posture of the response should be different.”
Louis: “The brand needs an SOP, but also humanity, a thousand faces. A luxury customer expects an experience made for them.”
Rachel: “Hyper-personalisation. And the apology messages that circulated looked AI-generated, which people noticed. They say the biggest beneficiary was the Chengdu pastry brand. It became a local hot spot overnight. It’s small, but you can see the dynamics are changing. If a wave of attention like that hit another foreign brand, could it catch it quickly? That’s really about the experience of the people in management.”
Louis: “Take Apple. It changed CEO on September 1. I contacted its support recently, and in the past the replies were long, stock phrases, very templated, English translated into Chinese. This time it was down to earth, the way you and I chat. I noticed it clearly, and I wondered if it’s connected to localisation. That’s my guess.”
Louis: “Let me add why foreign brands respond late. They can have local insight but can’t make local decisions, because they protect their brand DNA and decision power sits elsewhere. A leading Swedish furniture brandis an example. China’s e-commerce has been developing for fifteen, almost twenty years, and the brand only opened its Tmall store in March 2020, after 22 years in China. Starbucks launched delivery in 2018, and one reason for the delay was that China needed headquarters’ approval. It isn’t that they don’t know. They know, and find it hard to change from the China side.”
Louis: “The brand is stuck in the middle. It stands for Nordic democratic design, good-looking, good quality, affordable. That’s a global story. But in China many independent brands now sell at a similar or slightly higher price, with local design that meets local needs in finer detail. The brand can’t go upmarket because of its DNA, and if it goes down it faces countless homogeneous Taobao brands.”
Rachel: “And its stores are built around experience, with e-commerce as an add-on. When everyone is this fast, how many people will make a trip just to experience a store?”
Louis: “That’s the dilemma.”
New going global
The path of guochao has changed: it used to be loud at home and quiet abroad, and now foreign consumers sometimes notice first and it travels back, which suggests Chinese brands’ influence is rising.
Louis: There’s a very visible change this time. The last wave started at home, with little sound abroad. This time the first people affected are foreign consumers, then it comes back and triggers attention and purchases here. That’s a big difference.”
Rachel:” I don’t quite get one thing. Does that mean the overseas market still carries some kind of halo?”
Louis: “You can call it a halo, or you can say the brand has bigger, global influence.”
Rachel: “Got it. And the Chinese narrative they sell abroad is being verified and accepted. That recognition brings a lot of value. But I’m not sure it’s general. Songmont looked like a domestic story first, and foreign attention amplified it. Arnault visited its Shanghai store in September last year and bought two bags.”
Louis: “I’m saying the route exists, but you have to look at the specific brand. Some brands’ main market is still abroad, some at home.”
Louis: “These brands are also smart about what they say. They don’t crudely say China is number one, love your country. If you really have confidence and soft power, you don’t have to say it. There’s another, smarter kind that tells a global story. Pane draws on ancient Greece. The Olympic Games were once sacred, held every four years, with everyone putting down their fights. That order has dissolved, and the Olympic spirit has been diluted. So the brand doesn’t talk about the modern Olympics, which would sound like any sports brand. It talks about the classical spirit, which people at home and abroad both accept.”
Rachel: “Other brands do borrow from antiquity. Nike is named after the Greek goddess of victory, and ASICS comes from a Latin motto, but mostly as a name or a logo. One review argues Nike’s Greek presence barely goes beyond the name. Pane uses it as an attitude. Whether it’s the Olympic spirit specifically is your reading. I haven’t seen the brand say so. I think Nike used to tell a story about a spirit of all humanity.”
Louis: “Let me offer some open possibilities for what comes next. More mid-to-high-end consumer brands will take the route of going abroad first, and their narrative demands go up. The global story is harder, unless the founder has a global outlook. You need a point Chinese people will pay for and overseas consumers will too.
I also think many will put concept stores and flagships in China, not abroad. Overseas operating costs are hard to control, and a flagship here lets overseas consumers feel the brand through inbound tourism. Then independent websites carry the sales, and platforms like Amazon. It matters for Chinese consumers too. E-commerce alone makes it hard to truly understand a brand, so an offline flagship has become scarce.”
“To understand China, an international brand has to go and see it: on the ground, in person, with its old assumptions set aside. It also needs guides who combine an international outlook with local insight.”
Want to discover the future of retail in China firsthand? From Monday, April 19 to Sunday, April 25, 2027, we’re heading back to Shanghai for a seven-day inspiration tour. Rachel Zheng will guide the group on its first day in Shanghai, while futurist Louis Zheng will share his insights into the future of Chinese retail and innovation.
