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Dream market -

China is a massive market that many brands want to be part of. Currently, however, the Chinese economic landscape is changing, and with the economy slowing down, so are the purchasing habits in China.

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Domestic competition -

One of the main issues that international brands face in China is the homegrown competition. Chinese brands dominate a great part of the market, so how can big brands compete with domestic ones?

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Geopolitical tensions -

Geopolitical tensions between China and the West, most notably aggravated by the sanctions recently imposed by the US, are another issue brands have to navigate if they want to do business in China. 

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Geopolitical tensions -

President Trump has applied new tariffs on all Chinese exports to the country, and China retaliated, making it more difficult for businesses based in the US to expand.

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Guochao -

Young Chinese consumers are jumping on the bandwagon of a trend known as Guochao, which translates to "national wave or tide.”

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Guochao -

Guochao reflects a preference for Chinese brands and culture as opposed to international ones. Also called “China Chic,” Guochao is having an impact, particularly on luxury brands. Now, let's take a look at some big brands struggling in China. 

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Samsung -

The South Korean brand is the current world leader when it comes to smartphones. They do face fierce competition in, and from, China. Brands like Huawei and Vivo dominate the domestic market. The Chinese government subsidizes electronics purchases, but the high costs of Samsung make it less competitive.

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Quantas -

Western airlines are also experiencing difficulties in the Chinese market. Australia’s Quantas is dropping its only flight from Sydney to Shanghai. The reasons include a decrease in ticket sales.

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Virgin -

In July 2024, Virgin followed Qantas' footsteps and cancelled their flight from London to Shanghai. The reason was “significant challenges and complexities.” Like many Western brands, Virgin can’t fly through Russian airspace, which makes the routes to China longer and more expensive. Chinese airlines don’t have such problems.

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Estée Lauder -

Beauty brands such as Estée Lauder have been losing ground to Chinese competitors, which offer cheaper alternatives. The country is the second largest beauty market after the US, but over the last couple of years several overseas cosmetics brands have left the country because demand was not high enough. These include Maybelline and Innisfree. 

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Shiseido -

The Japanese beauty brand is also struggling in the Chinese market with sales steadily decreasing. It didn’t help that in 2023 China boycotted Japanese products, after the country released treated radioactive water from the Fukushima plant. 

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Starbucks -

Starbucks has over 7,000 outlets in China, which is pretty impressive for a tea-drinking nation. Sales were down by 8% in 2024. This doesn’t seem like much, but China is in fact the brand’s biggest market after the US. Chinese coffee company Luckin Coffee is their fiercest competitor and they're growing fast.

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Pandora -

The Danish jewelry brand was thriving in the Chinese market before the Covid-19 pandemic, but sales have been falling ever since and they are closing stores. Chinese consumers, especially younger ones, are favoring high-carat gold instead of sterling-silver charm bracelets.

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Nike -

Nike is a well established brand in China, but competition from local brands such as Anta and Li-Ning are becoming a threat. According to an analysis by Swiss bank UBS, Nike will probably experience "slow growth with little margin rebound over the next couple years.”

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Esprit -

The brand has been struggling worldwide. Esprit has filed for bankruptcy in Europe and is now struggling in the Chinese market as well. Esprit is losing business to cheaper domestic alternatives such as Taobao and Shein.

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ASOS -

The British online fashion retailer tried its luck in the Chinese market, but by 2016, it had pulled its operations out of the country. Competition, mainly from Alibaba at the time, dictated its end. While ASOS is no longer in China, it still faces fierce competition internationally from Chinese retailers such as Shein, especially amongst Gen Z consumers.

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Louis Vuitton -

A prestigious high-end brand, Louis Vuitton is also struggling in a country that is spending less on luxury items. And to make matters worse, Chinese consumers are turning to pingti products, which are essentially items inspired by top luxury brands, but at a much lower price tag.

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Gucci -

Gucci is yet another high-end brand suffering the impact of the pingti trend in China. In 2024, Gucci parent Kering, which includes brands such as Yves Saint Laurent and Balenciaga, had a drop of 62% in profits.

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Burberry -

In 2024, the luxury British brand saw profits fall by 19% compared to the previous year. The brand has also been accused of being overpriced, with a US$460 hot water bottle going viral on the local social media site Weibo.

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Hugo Boss -

The German fashion house is also experiencing a decline in demand in China. Hugo Boss reported that they won’t meet their sales targets for 2025 and that their quarterly Asia-Pacific sales figures were down by 7%.

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Exceptions -

Though many big luxury brands are losing their market share in China, this is not the case for every single one of them. Hermès, Prada, and Ralph Lauren have been betting on quiet luxury and reaping the rewards in the Chinese market.

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Omega -

The watch brand is also struggling in the Chinese market. Flashy, expensive wristwatches are not attracting a lot of consumers in the country. In the second semester of 2024 the Swatch Group, which owns Omega, reported a 30% drop in sales in the region.

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Tesla -

China is the carmaker’s second-biggest market. The numbers are however declining sharply in 2025. In February alone, Tesla delivered 50% fewer vehicles than the same period in the past year. A slower economy, competition of local car manufacturers like BYD, and now trade sanctions, are having a great impact on Tesla in China.

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Volkswagen -

China represents a third of Volkswagen Group sales, making it the largest market for the German automaker. In 2024, Volkswagen saw a drop of 10% in sales, losing ground to local brands. VW is trying to revitalize the brand by partnering up with Chinese battery maker CATL.

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General Motors -

GM partnered up with local SAIC, but the joint venture resulted in a loss. The car manufacturer is restructuring their operation in China and will focus on the sale of luxury brands such as Cadillac and Buick.

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Toyota -

In 2024, Toyota saw a 6.9% drop in sales in their biggest market after the US. The Chinese consumer boycott of Japanese products in 2023 and cheaper local cars played a role in this drop.

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Intel -

In 2024, China banned overseas-made semiconductors from its PCs and servers, so chipmakers such as Intel were hit hard. Nearly 30% of the company’s total global revenue comes from China.

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AMD -

AMD is also a big chipmaker that was affected by the Chinese government measures. The tech company is also struggling amid the US-China trade war.

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Apple -

The American tech giant also experienced a drop in sales in China. Apple faces competition from brands such as Huawei, as well as issues with the government ban on their AI features. As a result, Apple announced a partnership with tech giant Alibaba to roll out AI for iPhones in China.

Sources: (Love Money)

See also: Report predicts the strongest economies in 2038

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