Luxury brands conquer Chinese customers again during Tet

Ahead of the 2026 Year of the Horse, Harry Winston introduced a limited edition watch in rose gold, priced at 81,500 USD. It is studded with diamonds and features a horse covered in red lacquer.

High-end fashion house Chloé also launched a collection including silk scarves priced at 250 USD to snakeskin shoulder bags priced at 5,300 USD, the highlight being the horse’s head and tail connected by a horsebit chain. A series of other brands such as Loewe, Gucci and Loro Piana also launched accessories for handbags with horse motifs.

Theo CNBCThe New Year of the Horse takes place in the context of optimistic sentiment returning to designer fashion brands. The occasion could also mark the beginning of a recovery for the Chinese luxury market. Once a key driver of the global luxury industry, Chinese consumers have sharply cut spending in recent years as economic growth slows and real estate prices weaken.

According to Bain estimates, the Chinese luxury market will reach about 350 billion yuan in 2024, equivalent to about 50 billion USD. Although the consulting firm forecasts the market to decline by 3-5% in 2025, Bain experts said the sector has begun to show signs of recovery in the second half of 2025, thanks to more positive developments in the stock market and improved consumer confidence.

Bernstein senior analyst Luca Solca predicts that Chinese luxury goods spending will gradually stabilize. According to Solca, average growth will be around single digits in 2026, but competition will be fiercer than in the previous golden age.

Before the Covid-19 pandemic, Chinese consumers accounted for about a third of the global luxury goods market. This proportion has now decreased to about 23%. This luxury goods industry does not depend only on Lunar New Year. However, this is still an opportunity for Western businesses to show respect for Chinese culture.

Tet is associated with two colors red and yellow – symbols of luck and fortune for Chinese people. However, Luca Solca believes that to conquer Chinese luxury consumers, brands need to go beyond familiar motifs.

“Chinese people are no longer overwhelmed by anything coming from the West. A superficial expression will not go far,” he said.

According to Daniel Langer, professor of luxury strategy at Pepperdine University, Lunar New Year collections began appearing in the early 2010s, as Western brands stepped up to exploit the fast-growing luxury consumer market in China. At that time, the emerging rich class was willing to spend heavily on branded goods, especially on trips abroad, because the domestic luxury store system was limited, concentrated only in big cities like Shanghai or Beijing.

Today, with broader reach and more diverse choices, brands are forced to put in more effort to attract new customers. After 12 years since the last time, the year of the Horse, the high-income customer group in China has also become more sophisticated.

“They have visited the world’s best spots, eaten at top restaurants, shopped at prestigious boutiques. Expectations for brands are significantly higher. China has completely transformed, from a market with pent-up demand for luxury goods to one of the most sophisticated,” Langer said.

In addition, the pandemic and the rise of domestic luxury brands have also made Chinese people gradually get used to spending less on Western brands. Before Covid-19, the majority of their luxury purchases took place abroad.

According to Bain, in 2019 up to two-thirds of Chinese luxury goods spending was done abroad. By last year, this ratio was only about one-third.

Veronique Yang, head of consumer affairs for BCG in mainland China, noted that the zodiac animal of the year is only considered a lucky symbol for those born in that year. Therefore, Yang said over-exploitation of horse images also poses risks. Instead, this expert believes that brands can create experiences to connect more authentically with customers, especially young people.

For example, Valentino holds a three-day lantern festival in January at Tianhou Palace – a historic temple located along Suzhou River in Shanghai. Burberry also launched its Lunar New Year campaign in mid-December, with Chinese brand ambassadors, pop-up stores and ice skating rinks in Beijing.