The insight: Luxury brands like Balenciaga, Versace, and Valentino are weaning themselves off discounts in the Chinese market as the country’s prolonged economic downturn and shifting consumer habits force a change in strategy.

By the numbers: Brands are trying to restore their cachet among China’s wealthy households.

• None of Balenciaga’s products were discounted on Tmall in Q1 or during November’s Singles Day shopping festival, per ReHub data cited by Bloomberg. By comparison, the Kering-owned brand resorted to an average discount of 41% during the same periods last year.
• Versace lowered prices for just 3% of its products in Q1, compared with 12% in 2024.
• Valentino offered no discounts in February and March, compared with an average rate of 40% and 30%, respectively, in the same months last year.

Our take: These pricing strategies reflect the new reality of the Chinese market, which can no longer deliver guaranteed growth as consumers grow more discerning and the economic landscape grows more challenging.

• As in the US, aspirational spending is drying up, forcing even stalwarts like Hermès to showcase a more affordable (relatively speaking) array of products to lure cautious customers.
• Shifting travel trends and priorities have also resulted in fewer luxury spending sprees abroad—formerly an important source of growth for brands.

With demand from Chinese consumers set to remain uncertain amid the country’s prolonged economic downturn and trade war with the US, it’s no surprise that luxury brands are targeting China’s wealthiest to stay afloat.