Outside the Pitti Immagine Uomo exhibition Photos: Courtesy of Milano Finanza

 

A man checks a coat at Pitti Immagine Uomo exhibition.

 What is happening in China's fashion galaxy? Has some arm of the galaxy broken? 

"Following a turbulent 2024, we expect the luxury market to continue a downward trend in the first half of 2025, with cautious optimism in the second half of the year, leading to a final stalemate for the entire year," predicted Weiwei Xing, Greater China Partner at Bain & Company.  

The first cracks in consumption trends, influenced by the pandemic years, had already manifested in 2018-2019, and the recovery in 2023 was not comparable to the performances of 2019. Especially in the last three years post-COVID, new behavioral phenomena have emerged among consumers, with rapid changes in taste, new economic underpinnings regarding purchasing power, and fierce competition among brands. All of this has led to a decline in revenues in the first quarter for major brands in Asia, as recorded by BofA Global Research, a research institute linked to Bank of America.  

The decline confirmed and predicted by Bain & Company does not exclude marked positive exceptions that confirm how the fashion and luxury sector must also strive toward innovation, even though its paradigm is rooted in the tradition that constitutes its identity's DNA. Max Mara and Golden Goose are examples of this.  

In the clothing sector, a positive effect of Italian men's fashion exports is emerging. In anticipation of the upcoming (108th) edition of Pitti Uomo, taking place in Florence from June 17 to 20, Confindustria Moda has certified, based on Istat data, that China has taken fourth place among foreign markets with a growth of 20 percent, amounting to 777 million euros (8.1 percent of total exports by value) in 2024.  

Changing Tastes  

What is changing in the tastes of potential Chinese customers? 

Followers of high luxury and Gen Z were the two categories targeted by marketing campaigns from brands, including Italian ones, in the last three years. Today, coinciding with a broad reduction in consumption, High luxury has confined itself to "Shame and Quiet Luxury," meaning that the ostentation of logos or models is no longer rewarding. On the other hand, Gen Z individuals are economically strained unless supported by their families.  

For this reason, Loro Piana and Cucinelli, for example, still had positive returns in 2024. Loro Piana took the opportunity to celebrate the company's centenary with the recently concluded exhibition in Shanghai titled "If you know, you know. Loro Piana's Quest for Excellence." "The expression 'Quest for Excellence' alludes to the relentless search for fibers to create unique fabrics and all those processes that the company affectionately refers to as a chain of hands," explained Judith Clark, a professor at the University of the Arts London and curator of the exhibition. Loro Piana, by definition, follows the principles of "Quiet Luxury" while simultaneously offering an image of an epic journey through fibers in the world. This was confirmed by the recent awarding in Milan of a prize to two young students active in fiber research and their multiple combinations.  

According to BofA's Brand Leading Indicator, Loro Piana maintains a high position in the first part of the year, followed by Miu Miu from the Prada Group. Cucinelli, a high-spending brand, proposed a philosophy for its company focused on a vision of reconciliation among people, with a direct message to the youth, inviting them to "become actors in a humanistic revolution aimed at Tempum Novum." 

Cucinelli has been present in China since 2013 with its stores, but is also an importer of cashmere, sourcing 90 percent from China and 10 percent from Mongolia.  

With this philosophy that reflects a neo-humanism, the results of the first quarter in the Chinese market show a positive value of 10 percent at constant exchange rates, exceeding 2024 figures. To measure and evaluate a brand's performance, analysts and research institutes, such as BofA, use a parameter that considers the ratio between selling price and profits, comparing it with historical data. The typical range is generally between 20 and 25 times; currently, the index is around 21, which is why performance results cannot match those of the past.  

However, digging deeper reveals other causes creating a distance between Chinese consumers and Western brands. According to Daniel Langer, CEO of Equitè and recognized as one of the top five global luxury key opinion leaders, in light of the emotional changes in customers illustrated in the case histories of this report, there are increasingly frequent staff attitudes in stores that do not encourage purchases: Poor service and high prices.  

Langer particularly argues, in the Jing Daily, a Chinese magazine specializing in fashion, that brands are disinvesting in training programs for Chinese staff to help them understand cultural differences, creating an obstacle to the soft skills needed to build relationships with customers. Thus, emotional intelligence is lacking in sales.  

This is an important observation because, like a slow-moving underground current that inexorably progresses over the years, these signals could penalize the famous mathematical range in the future if proactive solutions are not found. Society is changing, and even in China, it may be necessary to equip human resources with the preparatory training for these changes and tools to retain clientele.