With consumers tightening their belts in China, the battle between global fast fashion brands and local high street giants has intensified.

Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.

After a lacklustre 2023, recovery may be on the horizon for established and independent lines alike.

Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.

Despite the country’s protracted property crisis, deflationary pressures and other economic headwinds, its domestic luxury market is expected to grow 4 to 6 percent in 2024, outpacing both Europe and the US.

The LVMH-owned cosmetics line is shuttering much of its e-commerce presence on Jan. 28.

While the economic woes have certainly weighed on sales, analysts say the main issue facing the multinationals is their slowness to adjust to the shifting priorities of consumers, who have become more discerning about what they buy and are increasingly finding that local brands are more suited to their needs.

Brands looking to invest in new developments and rapidly changing shopping districts across China’s major cities are scrutinising locations harder than before the economic slowdown.