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

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

Ahead of the Year of the Horse, which begins Tuesday, Harry Winston unveiled a limited-edition $81,500 rose gold watch with diamond bezels and a red lacquered horse. High-end fashion brand Chloé launched a capsule collection, ranging from $250 silk scarves to a $5,300 snakeskin and leather shoulder bag with a head and ponytail linked by a horse chain. Many other brands, including Loewe, Gucci and Loro Piana, have introduced new bag charms with horse motifs.

The Year of the Horse comes at a time of cautious optimism for designer brands and could usher in a resurgence of China's luxury market.

Chinese consumers were once the main driver of the global luxury sector, but they have declined sharply in recent years, burdened by the country's slowing economy and depressed home values.

The Chinese luxury market stood at about RMB 350 billion in 2024, or about $50 billion, according to Bain estimates. While the consulting firm estimates that the market will contract between 3% and 5% in 2025, Bain analysts noted that the sector began to show signs of recovery in the second half of 2025 thanks to better stock market performance and consumer confidence.

Bernstein senior analyst Luca Solca said he predicts Chinese luxury spending will stabilize, forecasting mid-single percentage growth in 2026. However, the market remains much more competitive than at its peak, he said.

Before the Covid pandemic, Chinese consumers accounted for around a third of the global luxury goods market, according to Solca. That percentage has since fallen to about 23%, he said.

The fortunes of the luxury market do not depend solely on the Lunar New Year, but it is an opportunity for Western brands to show respect for Chinese culture, he said.

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

But Solca said that to better engage the Chinese luxury consumer, brands must go beyond the expected motives.

“The Chinese no longer fear anything that comes from the West,” said Solca. “A superficial interpretation of the CNY is not going to get you very far.”

Veronique Yang, who heads BCG's Greater China consumer practice, said literal interpretations can seem lazy or even disrespectful to Chinese consumers. Younger buyers are also looking for newer options, he said.

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

Lunar New Year collections date back to the early 2010s, when Western brands were eager to take advantage of the rapidly growing Chinese luxury consumer market, according to Daniel Langer, a professor of luxury strategy at Pepperdine University. At the time, newly wealthy Chinese consumers were eager to spend on designer items, especially when traveling abroad, he said, as there were few luxury boutiques in China outside of big cities like Shanghai and Beijing.

Now, with broader access and more options, brands have to work harder to attract new customers.

And in the 12 years since the last Year of the Horse, high-income Chinese consumers have become more demanding, Langer said.

“They have been to the best places in the world. They have dined in the best restaurants in the world. They have shopped in the best stores in the world. Their expectations of brands are significantly higher,” he said. “China has completely gone from being a country where there was a pent-up demand for luxury goods to a country of the highest sophistication.”

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

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

The Year of the Horse provides a natural opportunity for a considerable number of Western brands to connect with the holiday. Langer said she preferred brands that take a less literal approach, such as Loewe, which adorned its signature Puzzle bags with fringe and tassels for a denim aesthetic.

Yang noted, however, that the year's zodiac animal is a symbol of good luck only for people born in that year, which makes playing too much with horse imagery a risk.

Instead, he said, brands can use immersive experiences to connect with Chinese customers, especially younger ones, in a more authentic way.

Valentino, for example, 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, featuring 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 build a narrative around them,” Yang said. “It's not just about animals.”