From Paris to the Forbidden City, a power shift in global luxury culture

The U.S. imposed reciprocal tariffs, directly impacting the luxury industry that relies on global markets.

The world's largest luxury group, LVMH, was hit by a double whammy of weak earnings and the shadow of tariff wars, with its stock price plummeting over 20% in the past month.

In stark contrast, Lao Pu Gold, dubbed the "Hermès of gold," bucked the trend and achieved significant growth. Reuters analysis suggests that as a rising domestic luxury brand in China, Lao Pu Gold is capturing a large number of Chinese consumers who once chased Western luxury brands like Tiffany and Cartier.

The rise and fall of the luxury industry have always been a hidden footnote in the dialogue of civilizations. The aesthetic hegemony of "Eurocentrism," built over centuries by the West, is being deconstructed by the consumption choices of the new generation.

Amid the crisis of the luxury empire, Eastern high-end consumption quietly rises

As the global economic landscape shifts, the luxury market is gradually cooling, making it increasingly difficult for high-end luxury brands to sustain high growth under their lofty image.

LVMH's latest earnings report shows that in Q1 2025, the group's total revenue declined instead of growing, with core business revenue falling more than expected. Citigroup analysts noted in a recent report that this "bellwether of the luxury industry showed almost no bright spots," with sales "falling short of even the most conservative buyer expectations."

The current slump is compounded by a rocky road ahead. To counter tariff impacts, the globally supply-chain-dependent luxury industry has had to raise prices. LVMH CFO Cecile Cabanis stated in an earnings call that trade tensions are causing business to "change by the hour," and the group is considering price hikes to offset U.S. tariffs.

Similarly, Hermès' Q1 revenue growth slowed below expectations, and the group also plans across-the-board price increases to mitigate tariff costs.

This suggests luxury giants may face another tough year. Wall Street has already downgraded growth forecasts for the luxury sector. Citigroup emphasized that amid high economic uncertainty in the U.S. and Europe, LVMH—and the industry as a whole—is unlikely to see sequential improvement in Q2 and Q3. Bernstein predicts a 2% decline in luxury industry revenue for 2025 due to rising economic uncertainty and heightened global recession risks.

Weak earnings, tariffs, and bearish analyst reports have sent LVMH's stock into a downward spiral, prompting investors to seek new consumption hotspots for the next growth cycle.

Against this backdrop, Lao Pu Gold, specializing in ancient Chinese palace goldsmithing techniques, has emerged as the "chosen one" of the era.

Listed for less than a year, Lao Pu Gold became a phenomenon-level investment hotspot, with its stock price soaring from HKD 40/share to HKD 800/share—a wealth-creation myth.

The shift in capital markets reflects Chinese consumers' choices.

LVMH's Q1 sales in Asia (excluding Japan) plunged 11%, with shrinking Chinese consumer spending being the primary drag on global growth. Meanwhile, Lao Pu Gold posted triple-digit growth in both sales and profits last year. Third-party estimates suggest Lao Pu Gold's Q1 2025 revenue in multiple commercial districts outperformed most international luxury brands in China, reshaping the market dynamic between domestic and global brands.

While tariff wars strip LVMH of its last fig leaf, Lao Pu Gold's ascent as the "Hermès of gold" may seem unrelated at first glance, but it microscopically reflects the shifting power dynamics in global value chains.

LVMH's crisis and Lao Pu Gold's rise reveal the collapse of the old order: tariffs are merely the trigger, with deeper structural shifts in global consumption culture at play. Behind investors' votes with real money lie cultural confidence and industrial innovation resonating—an epic breakthrough where an ancient civilization reclaims narrative power in consumption.

The cultural shift in luxury: An East-rising, West-falling paradigm transition

The Eastern tide isn't a simple replacement of Western civilization but a paradigm revolution redefining "what constitutes sophistication."

Historically, luxury has symbolized status, with each brand representing a lifestyle—a symbolism that grants it unique value, deeply intertwined with social, cultural, and economic contexts.

As traditional Western luxury brands lose their luster, consumers are spontaneously "disenchanting" luxury culture. Bain data shows 50 million global luxury customers churned in 2024 (12.5% of high-end consumers), with younger demographics leading the exodus.

The "Eurocentric" narrative underpinning traditional luxury is being challenged as these young consumers turn to local cultural expressions, opting for categories aligning with China's "harmony between heaven and humanity" philosophy. The 2024 China Gold Jewelry Retail Market Insight Report notes that 18–34-year-olds drove over one-third of gold jewelry sales.

The rise of Chinese brands like Lao Pu Gold amid the earnings winter of LVMH and Kering is no accident. Its foundation lies in a dual awakening of culture and commerce. Lao Pu Gold exemplifies how Chinese brands are redefining high-end consumption.

First, Lao Pu Gold's explosive growth stems from deconstructing gold's traditional attributes.

While Western luxury giants still treat gold as a material cost, Lao Pu Gold elevates gold products into "wearable cultural history" through intangible heritage craftsmanship + cultural premium storytelling: filigree inlays recreate Forbidden City motifs, cloisonné techniques revive Dunhuang fresco hues—each piece becomes a miniature museum of Eastern aesthetics.

Beyond this, Lao Pu Gold also reimagines luxury's consumer engagement model.

Despite focusing on high-end malls and standalone boutiques, Lao Pu Gold meticulously crafts exclusive experiences—e.g., Ming Dynasty-inspired store designs and private "black room" tea lounges for VIPs. Amid overwhelming demand, some stores enforce 30-minute time limits and 5-item purchase caps to preserve luxury ambiance.

As gold transitions from "value-preservation tool" to "cultural symbol," and as consumer experiences diverge, Lao Pu Gold challenges global luxury giants built on story, heritage, and design premiums—prompting affluent youth to vote with their wallets.

Broadly, Lao Pu Gold and the rise of Eastern aesthetics reflect not just Western narrative fatigue and Eastern aesthetic revival but also contemporary China's growing cultural confidence amid historical currents.

As Lao Pu Gold refines the artisan spirit of "Kaogong Ji" into modern luxury DNA, LVMH and peers must recognize: true luxury isn't logo-laden vanity or consumer indifference, but a civilization's cultural heartbeat—still pulsing through millennia, now syncing with modernity.

Undoubtedly, the national is global. Rooted in tradition, Chinese brands are spearheading a global consumption value chain reconstruction.

In the new tariff era, how will Chinese aesthetics carve a niche in global consumption trends?

History writes its turning points in civilization's creases.

Three centuries ago, the Age of Exploration saw East India Company ships carrying tea and porcelain shaping Western imaginations of the East. Today, as tariff wars batter Western luxury brands, Chinese gold brands like Lao Pu Gold are quietly transferring consumption's scepter from the Seine's banks to the Yangtze's shores.

As Lao Pu Gold's stock trajectory pierces capital market ceilings while LVMH's market cap crumbles in luxury's twilight, this isn't just corporate divergence but a fragment of global cultural-consumption order restructuring.

Recently, while deepening domestic roots, Chinese firms accelerated expansions into Europe, Africa, and Latin America.

"Black Myth: Wukong" sparked overseas "Journey to the West" fever; "Ne Zha: Birth of the Demon Child" embarked on a "European tour"; "Kayou Three Kingdoms" cards trended on eBay—seemingly isolated phenomena actually represent unprecedented cultural dialogues between Chinese products and global consumers.

Similarly, as a standard-bearer of Chinese high-end culture, Lao Pu Gold eyes overseas markets. Its earnings report revealed plans for a Singapore Marina Bay Sands flagship in mid-2025, following last year's Hong Kong debut.

A critical question for all cultural exports—from IPs to gold jewelry—is: how to sustain interest beyond novelty?

Truly ascendant brands must balance innovation with depth—after captivating global audiences with cultural storytelling, they should decode deeper philosophical cores (e.g., translating "harmony between heaven and humanity" into sustainable design).

Internally, they must embrace cultural adaptability. For instance, Lao Pu Gold's domestically popular "gourd (fortune)" and "vajra (warding off evil)" designs need localization, applying "harmony in diversity" wisdom to build global brand ethics.

With culture as bedrock, innovation and inclusivity can propel Chinese brands from "hit-makers" to "paradigm-definers," establishing Eastern aesthetic benchmarks and converting cultural confidence into commercial clout.

The winners of neo-globalization will be those fusing local DNA with global vision—disruptors who reshape value chains amid turbulence.

Source: HK Stock Research Society