The Lunar New Year gives brands a chance to win back big spenders in China

Luxury brands from Harry Winston to Lowe’s are turning to Lunar New Year collections in a bid to attract Chinese customers.

Ahead of the Year of the Horse that 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 has released a capsule collection, ranging in price from $250 silk scarves to a $5,300 snakeskin tote and a leather shoulder bag with a horse’s head and tail attached by a horse chain. A slew of 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 mark the beginning of a resurgence in China’s luxury market.

Chinese consumers were once the main driver of the global luxury goods sector, but have declined sharply in recent years, hurt by the country’s economic slowdown and falling housing values.

The size of the Chinese luxury market will reach about 350 billion Chinese yuan in 2024, or about $50 billion, according to Bain estimates. While the consulting firm estimates the market will shrink by 3% to 5% in 2025, Bain analysts noted that the sector began showing signs of recovery in the second half of 2025 on the back of stronger stock market performance and consumer confidence.

Luca Solca, senior analyst at Bernstein, said he expects spending on luxury goods in China to stabilize, forecasting moderate-percentage growth in 2026. However, the market remains far more competitive than it was at its peak.

Before the Covid pandemic, Chinese consumers accounted for about a third of the global luxury goods market, according to Solca. He said that this percentage has since decreased to about 23%.

He added that the fortunes of the luxury market not only depend on the Lunar New Year, but it is an opportunity for Western brands to show respect for Chinese culture.

The annual holiday is associated with the colors red and gold, which symbolize good luck and wealth 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 to better appeal to the Chinese luxury consumer, brands need to go beyond the expected elements, Solca said.

“The Chinese are no longer intimidated by anything that comes from the West,” Solka said. “Routine interpretation of the Chinese yuan will not go away.”

Literal interpretations can come across as lazy or even disrespectful to Chinese consumers, said Veronique Yang, who leads BCG’s consumer practice in Greater China. Younger shoppers are also looking for new products, she said.

“Young Chinese respect ancient Chinese culture, but frankly, they don’t understand many parts of it, or want to reinterpret it in a modern way,” she 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, as Western brands were eager to tap into the fast-growing Chinese luxury consumer market, according to Daniel Langer, professor of luxury strategy at Pepperdine University. At the time, he said, newly wealthy Chinese consumers were keen to spend on designer goods, especially when they traveled abroad, as there were few luxury stores in China outside major cities such as Shanghai and Beijing.

Now, with broader reach and more choices, brands have to work harder to attract new customers.

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

“They’ve been to the best places in the world. They’ve dined at the best restaurants in the world. They’ve shopped in the best stores in the world. Their expectations of brands are much higher,” he said. “China has completely changed from a country where there was pent-up demand for luxury goods to a country with the highest level of development.”

They’ve also gotten used to spending less on Western brands between pandemic travel restrictions and the rise of high-end local brands, according to Langer.

Before the pandemic, Chinese consumers did most of their luxury shopping abroad. Pandemic travel restrictions have permanently changed that dynamic. According to Bain, two-thirds of Chinese luxury spending was spent overseas in 2019. Last year, overseas spending accounted for only a third.

The Year of the Horse provides a natural opportunity for a large number of Western brands to connect with the holiday. Langer said he prefers brands that take a less literal approach, such as Loewe, which decorates its signature bags with fringes and tassels for a cowboy aesthetic.

However, Yang pointed out that this year’s zodiac animal is only a symbol of good luck for people born in that year, making it dangerous to play too much with images of horses.

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

For example, Valentino held a three-day lantern festival in January at Tianhu Palace, a historic temple located along the Suzhou Creek in Shanghai. Burberry launched a large-scale Lunar New Year campaign in mid-December, with Chinese brand ambassadors, a pop-up store and an ice rink in Beijing.

“There are a lot of different cultural elements you can incorporate and build a story around,” Yang said. “It’s not just about the animals.”