China’s consumer spending remains subdued, with a trend of luxury brands in mainland China continuing to close stores in the first quarter of this year. As high-end brands shrink their presence in China, many are turning to selling coffee and creating marketing buzz.
According to reports from media outlets like Jing Daily, luxury menswear brands Zegna, Giorgio Armani, and Emporio Armani have closed their flagship stores at the China World Mall in Beijing. These stores, in operation for nearly 17 years since 2008, were iconic landmarks in Beijing’s CBD.
Gucci closed two of its stores in Shanghai in February this year, located in Réel Department Store and New World Daimaru Department Store. Gucci has closed as many as six stores in China since last year, according to reports from Yicai Global and Jing Daily.
A report by Bain & Company stated that the personal luxury goods market in mainland China declined by 18% to 20% in 2024, with market performance expected to remain flat in 2025 compared to 2024. The main reasons cited were consumer confidence being low, some high-value customers becoming more conservative, and further exacerbation of luxury goods consumption outflow.
In the battle for market share, Giorgio Armani’s flagship brand introduced China’s first Armani/Caffè at its flagship store in Beijing. Prada established its first independent dining space in Asia, “Prada Rong Mansion,” in Shanghai. Dior opened its second Cafe Dior in the country at Tai Koo Li in Chengdu.
A large number of young netizens are sharing their check-in experiences at high-end restaurants: “If you can’t afford a bag, come have a coffee instead, the atmosphere is great!” However, some have expressed that, “Four people spent over 3000 yuan and still didn’t feel full.”
Under the decline in high-end consumption, the luxury goods industry is actively exploring the path of transformation. Cross-border dining is one of the attempts by brands to deepen emotional connections with consumers. As industry insiders have noted, in today’s environment, foot traffic is everything, “get the customers in the door first.” It is believed that more innovative approaches will emerge as luxury brands venture into new territories.