London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

How luxury brands could suffer if Chinese students stay home and the ‘wake-up call’ for labels failing to penetrate China market

Wealthy Chinese students are huge spenders on luxury but far fewer first years are likely to take up new places overseas in the coming academic year. Smaller brands that have failed to penetrate the Chinese market will need to work much harder on it in the years ahead, one consultant says

Without the yearly influx of rich Chinese students, the department stores and high streets of Vancouver in Canada, Australia’s Melbourne and Boston in the United States would look desolate.

Even retailers in global hubs like London and New York are anxious about what damage an end to this much-needed cash-flow would do to their businesses.

More than 1.6 million Chinese are studying overseas, of whom at least 1.42 million remained abroad when countries closed their borders and airlines cancelled flights because of the growing pandemic. Some, stranded and concerned by rising incidents of xenophobic violence, initially regretted their decision to study abroad.

Earlier this week, the Trump administration announced that it would bar foreign students whose classes are online only from coming back to the US to resume their studies. Those already in the US will have to leave and take classes from their home countries. This recent development is likely to have an even larger impact on the decreasing number of international students from countries such as China who currently live in the US.

“The Chinese students who were stuck here [in London] tried really hard to get back home,” says Rocky Chi, the Britain-based head of planning for Emerging Communications, a marketing firm specialising in Chinese branding. “Some of them got on private planes, but the majority stayed and found that – after the initial panic – they enjoyed their quarantined life in Britain.”

Interestingly, initial statistics show that Chinese students based in Britain spent more in the last three months than they did in the same time period last year. “The numbers are really high,” says Chi. “We’re talking about a more than 50 per cent increase, all spent on online shopping for luxury goods.”

Much of this is because luxury stores in Europe and the US have been offering large discounts to lure in customers during the lockdown – and Chinese students, unable to go out, have been making the most of them. Even British property services and Michelin-starred restaurants doing takeouts have got in on the act, putting out messages in Mandarin to target them.

By September, things could look very different. Undergraduates already on the ground are likely to stay and finish their degrees, but far fewer first years will take up new places, particularly since most universities will be hosting lectures and tutorials online for the foreseeable future.

Global brands – while affected – will feel less of an impact from this change in affairs than local retailers. “If you are Balenciaga and you have fewer Chinese tourists shopping in London or New York or Brisbane, but more in Shanghai and Beijing, then that’s OK,” says luxury consultant Mario Ortelli. “But if I run a department store without a global footprint, then I am in trouble.”

But it is not only the actual purchases that count. While studying abroad, Chinese students are often introduced to new brands, ones that they then unwittingly advertise on social media to friends in China. Aspinal of London, a label with a very small presence in China but popular among Chinese students in Britain and experiencing rising sales in China, is an example of this.

Additionally, parents come to visit and spend extravagantly on local shopping trips, while students generally visit other cities in the country they’re studying in, propping up retail in a number of places.

“Young people who study abroad are more exposed to international brands and have a willingness to buy products that will help them fit in in their new environment,” Ortelli says. “On the other side, they are paying a lot on tuition and rent to live abroad, so by staying at home there will be more money to spend on fashion.”

Ultimately, the coronavirus has highlighted what we already knew – that outside London and Paris, domestic spending on luxury in Europe is weak, and that smaller brands that have failed to penetrate the Chinese market will need to work much harder on it in the years ahead.

“Demand driven by China is the heart of the entire fashion industry, whether it’s by students, tourists or at home,” Ortelli says. “This is a further wake-up call for brands – but to be honest, anyone who hasn’t heard it already should be out of business.”

For department stores and local boutiques in cities such as Vancouver, Melbourne, Brisbane, Austin and Boston – places where fashion retail would be the most affected by a drop in Chinese students – a focus on local customers and their needs is paramount, as is improving online portals for domestic customers.

However, it looks like this could be a short-term problem. While the number of Chinese students during the 2020/21 academic year will be significantly lower than usual, universities will be doing everything they can to lure international students back once the threat of the coronavirus is over – and given that studying abroad offers young people far more than just the course itself, it is likely they will return.

“To be honest, I think the current US-China relationship poses more problems than the coronavirus,” says Chi. “I believe that outside the US – which students will increasingly keep away from – the 2021 intake will see a record high number of Chinese students pouring in. Chinese parents start planning an elite education for their children from a very young age, and they aren’t going to let something like a virus derail it. In somewhere like London, families also buy second homes as an investment and somewhere their kids can live in. This is a long-term plan for them.”

Many Chinese students around the world are in a group on Chinese microblogging platform Weibo initiated and hosted by Chinese newspaper China Daily, which has triggered nearly 290 million discussions and 23 billion reads around studying abroad during the coronavirus.

“The whole of China is watching, and constantly comparing the conditions between different countries,” says Chi. “It will be a real factor on where students choose to go in 2021.”

It will also be a real factor in deciding which cities retain their department stores, glossy boutiques and Net-a-Porter next-day delivery options – and which don’t.




Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×