Jake’s Take: Why China is Swapping Louis Vuitton for Lululemon

And yet headlines are dominated by this notion that Chinese spending power has cratered. Certainly, there are macroeconomic pressures—and over the last few years that’s led to higher savings and the “pingti” (平替) trend, with some consumers swapping branded goods for cheaper, unbranded alternatives on discount platforms like PDD.

But these headlines don’t capture the full story. At WPIC Marketing + Technologies, we work with dozens of premium imported brands across virtually every product category. In many of these categories, we’ve been seeing “consumption upgrading”—consumers swapping cheaper alternatives for premium brands. That’s especially true in categories related to new lifestyle trends like healthy living—functional food, vitamins, athletic wear, science-backed skincare, mother-baby, personal care, and more.

Consumers are not “cash-strapped”, they are seeking value—and they are willing to pay a premium for the things they care about.

Premium brands like Lululemon and Arc’teryx are thriving because they’ve positioned themselves at the center of trends related to wellness, outdoor sports, healthy living, etc. They’ve done that through popular offline activations and strategic use of Xiaohongshu (Little Red Book), as Olivia Plotnick has analyzed.

And knockoff versions of these brands are highly accessible in China—fire up PDD and take a look at the enormous selection of fake Lulu pants and Arc’teryx jackets available at bargain bin prices. They look close to the real thing—but Chinese consumers want the real thing because they believe in the brands, they care about quality, and there is even a subtle signaling effect by wearing “real” premium athleticwear.

In addition to the increased focus on exercise and eating healthy, younger consumers are simply less interested in sporting flashy luxury labels—that’s one reason Hermès, with its more subtle and refined ethos, has outperformed flashier luxury houses in China amid a broader industry downturn.

Hope this adds some nuance to the discussion about China’s consumer confidence.