Lunar New Year gives brands a chance to win back big spenders in China

Luxury brands from Harry Winston to Loewe are participating in Lunar New Year collections in a bid to attract Chinese customers.

Ahead of the Year of the Horse, which begins on Tuesday, Harry Winston unveiled a limited-edition, $81,500 rose gold watch with a diamond bezel and red lacquered horse. High-end fashion brand Chloé has released a capsule collection ranging from $250 silk scarves to a $5,300 snakeskin and leather shoulder bag, with a horse’s head and tail tied together with a horse chain. Many brands, including Loewe, Gucci and Loro Piana, have launched new bag ornaments with horse motifs.

The Year of the Horse coincides with a period of cautious optimism for designer brands and could mark the beginning of China’s return to the luxury market.

Chinese consumers were once the main driver of the global luxury industry, but they have been sharply disrupted in recent years by the impact of the country’s slowing economy and low home values.

According to Bain’s estimates, the Chinese luxury market stands at approximately RMB 350 billion, or approximately $50 billion, in 2024. While the consultancy estimates that the market will contract by 3% to 5% in 2025, Bain analysts noted that the sector started to show signs of recovery in the second half of 2025, thanks to stronger stock market performance and consumer confidence.

Bernstein senior analyst Luca Solca said he expects China’s luxury spending to stabilize, forecasting mid-single-digit percent growth in 2026. But he said the market is still much more competitive than at its peak.

Before the Covid outbreak, Chinese consumers made up about a third of the global luxury goods market, according to Solca. That rate has since fallen to about 23%, he said.

He also said that the fate of the luxury market does not depend solely on the Lunar New Year, but that it is an opportunity for Western brands to pay respect to Chinese culture.

The annual holiday is associated with the colors red and gold, which symbolize good luck and luck in Chinese culture. Each Lunar New Year is represented by one of the 12 Chinese zodiac animals. Last year’s animal was the snake.

But to best capture the Chinese luxury consumer, brands need to go beyond expected motifs, Solca said.

“The Chinese no longer admire anything that comes from the West,” Solca said. “A sloppy interpretation of CNY will not go far.”

Veronique Yang, who heads BCG’s consumer practice in Greater China, said literal comments could come off as lazy or even disrespectful to Chinese consumers. Younger shoppers are also looking for fresher items, he said.

“Chinese young people respect ancient Chinese culture, but to be honest, they don’t understand a lot of parts of it or they want it to be reinterpreted in a modern way,” he said. “It is important to weave a narrative that combines heritage with a contemporary vision.”

According to Daniel Langer, professor of luxury strategy at Pepperdine University, Lunar New Year collections date back to the early 2010s, when Western brands were eager to tap into the rapidly growing Chinese luxury consumer market. At the time, newly wealthy Chinese consumers were willing to spend on designer goods, especially when they traveled abroad, because there were few luxury boutiques in China outside major cities such as Shanghai and Beijing, he said.

Now, with wider reach and more options, brands need to work harder to win new customers.

In the 12 years since the Last Year of the Horse, Chinese high-income consumers have become more selective, Langer said.

“They went to the best places in the world. They ate in the best restaurants in the world. They shopped in the best stores in the world. Their expectations for brands are much higher,” he said. “China has completely transformed from a country with suppressed demand for luxury goods to a highly developed country.”

They have also become accustomed to spending less on Western brands amid pandemic travel restrictions and the rise of domestic high-end labels, according to Langer.

Before the pandemic, Chinese consumers made most of their luxury purchases abroad. Pandemic travel restrictions have permanently changed this dynamic. According to Bain, two-thirds of China’s luxury goods spending in 2019 was spent abroad. Last year, overseas spending accounted for only one third.

The Year of the Horse presents a natural opportunity for numerous Western brands to tie into the holiday. Langer said he prefers brands that take a less realistic approach, such as Loewe, which adorns its signature Puzzle bags with fringes and tassels for its cowboy aesthetic.

However, Yang noted that the year’s zodiac animal is a symbol of good luck only for people born in that year, meaning playing too much on the horse image poses a risk.

Instead, he said, brands can use immersive experiences to connect more authentically with Chinese customers, especially younger customers.

For example, Valentino held a three-day lantern festival in January at Tianhou Palace, a historic temple along the Suzhou Creek in Shanghai. Burberry launched an extensive Lunar New Year campaign in mid-December with Chinese brand ambassadors and a pop-up boutique and ice rink in Beijing.

“There are a lot of different cultural elements that you can integrate and create a narrative around,” Yang said. “This isn’t just about animals.”