Is Louis Vuitton losing the Chinese market?
LIFESTYLE
Manon Fillon-Ashida
9/23/20262 min read
After five years of weak sales, several luxury brands say their China business has recently turned a corner. Yet, this does not translate in LVMH’s latest report, for which sales to Chinese consumers are stabilizing, but they are not yet back to growth.
The pullback in luxury spending is mainly due mainly to China’s housing crisis. When middle-income Chinese consumers were splurging on designer goods several years ago, their homes were appreciating in value. As home values stalled and then fell, that cushion disappeared, and with it, a chunk of the demand that had fueled the luxury industry’s growth.
The Bloomberg survey finds that this weakness is not evenly spread, with shares of fashion- and leather-goods-heavy groups having lagged the more resilient Richemont. Echoing a split created by firmer momentum in jewelry while handbag buyers became more selective.
Adding this to an already weakened market, over the summer Louis Vuitton began a trademark dispute with a local tea maker, Molly Tea. This trial exacerbated a demand slump for LVMH’s profitable label, facing great backlash from patriotic local customers.
According to estimates from JL Warren Capital, Louis Vuitton’s sales in China fell roughly 30% in July, then 20–25% in August 2026. Overall, according to Bloomberg, LVMH’s shares fell by roughly 35% this year.
The speed and scale of the reaction owed a lot to social media platforms such as Xiaohongshu, Douyin and Weibo, which can turn a legal filing into a national talking point within hours. But the underlying mechanism is not new, whenever a prominent foreign company is seen as attacking a local Chinese business, the backlash can be swift and severe — and a legal win does not guarantee a commercial one. Even if Louis Vuitton prevails in court, that outcome says nothing about whether it wins back the clientele.
This is a similar reaction to the one that was unleashed on Dolce & Gabbana which faced a boycott for years after its 2018 ad campaign, which was seen in China as insensitive and racist.
Many industry watchers are still asking why LVMH pursued the case in the first place, and who signed off on it. Armand Mazloumian, a strategist and analyst specializing in the Chinese market, wrote in the China Report:
“Professionals who have worked in China for a long time know that a decision has to be read on several levels at once: legal, commercial, cultural, reputational, digital and social. A decision that looks perfectly rational in a Paris boardroom can produce a completely different outcome once it's told in fifteen seconds on Douyin.”
HSBC Holdings Plc analysts expect the damage to be contained and the social media backlash to be short-lived. While this may be temporary, it is likely to have had a negative impact on the French maison’s sales in the China market for Q3 2026.
Chinese consumers are still buying luxury, but they are demanding harder questions about value retention and justification for the premium. With this stricter consumer market comes little room for mistakes, even for big players such as Louis Vuitton.