{"id":309113,"date":"2026-01-29T03:25:06","date_gmt":"2026-01-29T03:25:06","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/309113\/"},"modified":"2026-01-29T03:25:06","modified_gmt":"2026-01-29T03:25:06","slug":"first-class-goods-in-second-tier-cities-as-luxury-goes-local-in-china","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/309113\/","title":{"rendered":"First-class goods in second-tier cities as luxury goes local in China"},"content":{"rendered":"<ul data-testid=\"Summary\" class=\"summary-module__summary__QjADA\">\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Luxury spending in second-tier cities exceeding first-tier<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Middle-class looks to spend on luxury, save on living costs<\/li>\n<li data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf summary-module__point__UgXPz\">Gen Z shoppers increasingly powerful force in luxury sector<\/li>\n<\/ul>\n<p>SHANGHAI, Jan 28 (Reuters) &#8211; China&#8217;s so-called second-tier cities are fast becoming the first stop for luxury goods vendors as middle-class consumers seek high living standards in lower-cost locales, taking with them their penchant for pricey parkers and expensive extras.<\/p>\n<p>With luxury spending in places like Nanjing, Changsha and two dozen other middling cities exceeding that of a handful of economic powerhouses such as Beijing and Shanghai, bling brands like Burberry <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/BRBY.L\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(BRBY.L), opens new tab<\/a> and Louis Vuitton owner LVMH <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/LVMH.PA\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(LVMH.PA), opens new tab<\/a> are following the money and booking sales that point to a recovery in China&#8217;s battered luxury sector.<\/p>\n<p data-testid=\"promo-box\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__promo-box__hVl8h\"> Sign up  <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/china\/first-class-goods-second-tier-cities-luxury-goes-local-china-2026-01-28\/undefined?location=article-paragraph&amp;redirectUrl=%2Fworld%2Fchina%2Ffirst-class-goods-second-tier-cities-luxury-goes-local-china-2026-01-28%2F\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">here.<\/a><\/p>\n<p>&#8220;The fact that you have all these second-tier cities now in the top 10 (luxury sales) ranking &#8211; it&#8217;s crazy if you think about it,&#8221; said Zino Helmlinger, head of China retail at CBRE.<\/p>\n<p>China accounts for roughly a quarter of luxury spending but sales have been sluggish since the end of a post-pandemic boom while weak economic growth and fallout from a property sector crisis continue to trickle down to the shopper on the street.<\/p>\n<p>However, Burberry last week said China&#8217;s Generation Z helped <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/burberry-forecasts-annual-profit-line-with-market-view-2026-01-21\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">revenue beat analyst expectations<\/a> while LVMH on Tuesday flagged a recovery in China with <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/world\/china\/lvmh-fourth-quarter-sales-beat-expectations-china-improves-2026-01-27\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" rel=\"nofollow noopener\" target=\"_blank\">forecast-beating fourth-quarter sales<\/a>.<\/p>\n<p>Notably, in August, when Louis Vuitton launched beauty line &#8220;La Beaut\u00e9 Louis Vuitton&#8221; in China, it made its eye shadow, lip balm and 1,200 yuan ($172) lipstick first available not in a first-tier city but at Nanjing Deji Plaza.<\/p>\n<p>Months earlier, data showed Nanjing Deji Plaza had, for the first time, leapfrogged long-time luxury mall leader Beijing SKP to become China&#8217;s top-performing high-end shopping centre.<\/p>\n<p>The mall, in the Jiangsu provincial capital of 9.5 million people, booked sales of more than 24.5 billion yuan in 2024 compared to Beijing SKP&#8217;s 22.2 billion yuan, state media said. Moreover, it likely stayed at the top in 2025, analysts said.<\/p>\n<p>The mall has an art museum, modern food hall and 500 square metre (5,382 square feet) restrooms with themes such as calligraphy, classical music and cyberpunk.<\/p>\n<p>So elaborate are the restrooms that they have gone viral on social media, and brands including Self-Portrait and Estee Lauder&#8217;s <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/markets\/companies\/EL.N\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">(EL.N), opens new tab<\/a> MAC Cosmetics have had pop-up shops in them.<\/p>\n<p>&#8220;There are many delicious types of food and the selection of shops is excellent,&#8221; 24-year-old Zhou Shiyong said of Nanjing Deji Plaza. &#8220;Only Deji has this kind of assortment; other shopping malls don&#8217;t have it, which is why we come to Deji.&#8221;<\/p>\n<p>Chart showing LVMH operating profit margin annually from 2012 to the estimate for 2025DEJI &#8216;DOMINATES COMMERCIAL EFFICIENCY&#8217;<\/p>\n<p>Second-tier cities such as Nanjing are becoming increasingly important to luxury brands as a growing contingent of middle-class people shun more economically developed first-tier cities such as Beijing and Shanghai to benefit from lower living costs.<\/p>\n<p>Latest research from insights firm MDRi showed luxury shoppers in second-tier cities spent an average of 253,800 yuan in 2024, up 22% from the previous year and surpassing first-tier consumers, whose spending fell 4% to 250,200 yuan.<\/p>\n<p>Top brands are chasing these consumers as they move further afield from previous growth markets and, in the case of Burberry, trying out new methods of marketing such as setting up a branded ice rink and a pop-up shop on a ski slope.<\/p>\n<p>&#8220;Recent earnings suggest a modest recovery, and part of that is due to more active investment &#8211; flagship experiences in first-tier cities, and more targeted, performance-led strategies in the top malls in lower-tier cities,&#8221; said James Macdonald, head of Savills research for China.<\/p>\n<p>Deji, owned by real estate conglomerate Deji Group, is the Nanjing region&#8217;s only mall to house every major luxury brand. It also offers more accessible labels aimed at Gen Z shoppers &#8211; an increasingly powerful force in the luxury sector as brands seek to tap shifting tastes among fickle younger consumers.<\/p>\n<p>&#8220;Deji has the highest luxury sales density in China. They have an ultra-strong VIP ecosystem, deep brand partnerships, frequent store upgrades and they basically dominate commercial efficiency,&#8221; said CBRE&#8217;s Helmlinger.<\/p>\n<p>&#8220;Brands would rather wait for a location there than go to another project just a few kilometres away.&#8221;<\/p>\n<p>MALLS IN SECOND-TIER CITIES CLIMB LUXURY RANKS<\/p>\n<p>Malls in other second-tier cities &#8211; such as Changsha IFS, Wuhan Wushang and Hangzhou In77 &#8211; are also rising in luxury sales ranking, Helmlinger said.<\/p>\n<p>Their ascendancy is partly economic. McKinsey research released last year showed that, in China, consumers in the biggest cities were most likely to cut discretionary spending.<\/p>\n<p>Consumer confidence was stronger among young and middle-income shoppers in second-tier cities, where living costs are lower and local job security firmer, the research showed.<\/p>\n<p>Many second-tier cities have also seen their middle-class population boosted by a net inflow of people from top-tier centres, Savills&#8217; Macdonald said.<\/p>\n<p>Demographic and economic shifts aside, Helmlinger said top malls in second-tier cities have significantly improved their offerings, giving nearby consumers access to brands without having to travel to Shanghai or Beijing.<\/p>\n<p>&#8220;It really shows China is going through a wide change in consumer behaviour, and in where money is localised and spent,&#8221; said Helmlinger. &#8220;In the coming few years we&#8217;re going to see many more second-tier cities rising, because that&#8217;s where the money is.&#8221;<\/p>\n<p>($1 = 6.9554 Chinese yuan renminbi)<\/p>\n<p data-testid=\"SignOff\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__full_width__kCIGb body-module__extra_small_body__Bfz20 sign-off-module__text__LQAMP\">Reporting by Casey Hall; Additional reporting by Xihao Jiang and Chenxi Yang in Shanghai; Editing by Anne Marie Roantree and Christopher Cushing<\/p>\n<p data-testid=\"Body\" dir=\"ltr\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__element__5eCce article-body-module__trust-badge__5mS3f\">Our Standards: <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" rel=\"noopener nofollow\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__medium__2Rl30 text-module__small__sph8i link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n<p><a href=\"https:\/\/www.reutersagency.com\/en\/licensereuterscontent\/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead\" target=\"_blank\" dir=\"ltr\" class=\"button-module__link__A3sD0 button-module__secondary__70gBu button-module__round__QDFgq button-module__w_auto__Sem-F\" data-testid=\"LicenceContentButton\" rel=\"nofollow noopener\">Purchase Licensing Rights<\/a><a data-testid=\"AuthorBioImageLink\" class=\"author-bio-module__author-image__jcaG3\" href=\"https:\/\/www.reuters.com\/authors\/casey-hall\/\" referrerpolicy=\"no-referrer-when-downgrade\" tabindex=\"-1\" rel=\"nofollow noopener\" target=\"_blank\"><\/a><\/p>\n<p data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__base__o--Cl body-module__extra_small_body__Bfz20 author-bio-module__description__9ynkB\">Casey has reported on China&#8217;s consumer culture from her base in Shanghai for more than a decade, covering what Chinese consumers are buying, and the broader social and economic trends driving those consumption trends. The Australian-born journalist has lived in China since 2007.<\/p>\n","protected":false},"excerpt":{"rendered":"Luxury spending in second-tier cities exceeding first-tier Middle-class looks to spend on luxury, save on living costs Gen&hellip;\n","protected":false},"author":2,"featured_media":309114,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[82519,85421,85419,102146,117243,117244,2786,82703,84889,84890,79,82500,53515,84896,84110,82543,82538,82546,82541,82550,82776,82530,82531,82547,82557,82710,85720,82548,82551,85719,82702,179,18,55396,82578,85420,82520,82522,82572,82527,82516,151320,84906,19,17,131093,111180,82565,82524,82575,82507,84909,84910,82510,84113,2612,84115,88146,102148,84334,107,102149,151321,82518],"class_list":{"0":"post-309113","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-amers","9":"tag-anlins","10":"tag-anv","11":"tag-appa","12":"tag-apret","13":"tag-apret1","14":"tag-asia","15":"tag-asxpac","16":"tag-bev","17":"tag-bevs","18":"tag-business","19":"tag-cmpny","20":"tag-cn","21":"tag-cycp","22":"tag-cycs","23":"tag-destabn","24":"tag-destabx","25":"tag-destbnx","26":"tag-deste","27":"tag-destfun","28":"tag-destg","29":"tag-destocabsm","30":"tag-destousbsm","31":"tag-destpsc","32":"tag-destrbn","33":"tag-destseabs","34":"tag-destseatp","35":"tag-destu","36":"tag-destucdptest","37":"tag-destz","38":"tag-easia","39":"tag-economy","40":"tag-eire","41":"tag-emea","42":"tag-emrg","43":"tag-erep","44":"tag-europ","45":"tag-ezc","46":"tag-fobe","47":"tag-fr","48":"tag-gb","49":"tag-handlg","50":"tag-hsehld","51":"tag-ie","52":"tag-ireland","53":"tag-liqs","54":"tag-lux","55":"tag-mtpix","56":"tag-namer","57":"tag-ncyc","58":"tag-news1","59":"tag-psnpr","60":"tag-psnpr1","61":"tag-publ","62":"tag-ret","63":"tag-shop","64":"tag-shopal","65":"tag-spcret","66":"tag-tex","67":"tag-topicworld-china-slug","68":"tag-us","69":"tag-wear","70":"tag-wear1","71":"tag-weu"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/309113","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=309113"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/309113\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/309114"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=309113"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=309113"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=309113"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}