The "domestic substitution" of luxury goods is in progress
Barclays' research shows that domestic luxury brands in China, such as LAOPU GOLD, have become strong competitors in the industry, challenging traditional European luxury brands. About 80% of LAOPU GOLD customers are also consumers of brands like Cartier and Hermès, indicating significant customer overlap and substitution risk. An increasing number of Chinese consumers believe that domestic quality has reached Western standards, weakening the market barriers for European brands
Barclays' recent research in China found that local brands have become strong competitors in the luxury goods industry:
In the past, the market generally believed that local brands posed little threat to the luxury goods sector, but this research has revealed that the situation has changed. Taking the rise of the local gold and jewelry brand "LAOPU GOLD" as an example, its success demonstrates that Chinese brands are capable of competing for consumers' wallets in the luxury sector.
The report cites data indicating that approximately 80% of LAOPU GOLD's customers are also consumers of top luxury brands such as Cartier, Hermès, or LV, showing significant customer overlap and substitution risk. Furthermore, an increasing number of Chinese consumers believe that domestic quality has caught up with Western standards, which is weakening the high entry barriers that European luxury brands have long established based on craftsmanship and heritage.
