Old Shop Gold Promotes "Wallet Shift" in the Luxury Goods Industry

On March 30th, Morgan Stanley released a research report on China’s luxury goods industry titled “Returning from China: Key Takeaways.” The report believes that domestic brand Lao Pu Gold (06181.HK) is driving the “wallet shift” in the luxury industry, and in the coming year, the top position in China’s luxury industry may be occupied by Chinese brands. Behind this is a long-term shift in Chinese luxury consumption: consumers are increasingly valuing the material and design behind products rather than just the logo.

According to the latest financial data, Lao Pu Gold’s sales revenue is projected to reach 31.37 billion yuan in 2025, with continued growth in the first quarter of 2026, reaching sales of 19 to 20 billion yuan. Lao Pu not only maintains rapid growth but also demonstrates an epic surpassing of Chinese brands.

According to data from Frost & Sullivan, based on the 2025 overall revenue ranking of luxury groups in mainland China, Lao Pu Gold has ranked second, surpassing French luxury brand Hermès and approaching the world’s largest luxury group LVMH. Meanwhile, Lao Pu Gold’s single-store performance is nearly 1 billion yuan, ranking first in both store efficiency and sales per square meter among global luxury brands in the Chinese mainland market. Based on relevant data estimates, in 2025, the revenue ranges for LVMH, Lao Pu Gold, and Hermès in mainland China are approximately 35 to 38 billion yuan, 26 to 28 billion yuan, and 23.5 to 26 billion yuan, respectively.

On February 28th, Lao Pu Gold announced its first price adjustment for 2026, with an increase of 20% to 30%. While February is usually a low season for business centers, Lao Pu Gold defied the trend and still achieved 3 billion yuan in sales. During the recent Qingming Festival, social media showed queues at multiple stores including Beijing SKP, Hangzhou Tower, Shanghai Yuyuan, and Shanghai Henglong. In contrast, even Hermès, which has been a leader in growth among international luxury brands, showed significantly slower growth in the first quarter compared to previous years.

Morgan Stanley cited Bain & Company data, stating that in 2025, Chinese consumers’ global personal luxury goods spending shrank by $7.5 billion (to $73.5 billion). However, this lost budget did not completely evaporate but instead “migrated.” The research report specifically mentions that domestic high-end jewelry brands represented by Lao Pu Gold achieved an “disproportionate” share of growth in the industry. Their customer base overlaps significantly with European giants like LV and Hermès (as evidenced by mall membership card data), indicating that Lao Pu Gold is not opening new customer segments but directly “poaching” core VIPs from top luxury brands. Morgan Stanley also noted in its research that, “Many Hermès customers may have spent a lot of money on Lao Pu’s jewelry in recent months.” Notably, Morgan Stanley predicts that LVMH’s brands will generate approximately $6.8 billion (about 42.2 billion yuan) in global sales from Chinese consumers in 2026 (including overseas sales), while Lao Pu Gold is expected to reach $6 billion (about 42.2 billion yuan) in 2026 and $7 billion (about 49.6 billion yuan) in 2027. This indicates that the top position in China’s luxury industry will be occupied by Chinese brands within the next year.