When Bernard Arnault, one of the world’s richest men and the chairman of LVMH, visited Shanghai in 2025, his shopping trip sent a resounding message. Instead of touring his own luxury boutiques, he stepped into Songmont, a minimalist premium Chinese leather label and bought two handbags. Arnault’s small detour stands testament to the drastic competitive changes in the Eastern luxury world, made clear with commercial numbers: LVMH is down 30% from its 2023 peak, and Kering, which owns Gucci and Saint Laurent, has plunged 60% from its 2021 high; meanwhile, Chinese luxury domestic labels are rising in popularity.
That shift is mapped in detail in Totem’s 2026 report, produced with Rakuten Insight Global. The study surveyed 3,500 consumers across seven markets (Japan, South Korea, Indonesia, Malaysia, India, USA, UK) and examined 447 Chinese brands to assess global receptivity and brand performance.
70% drones, 51% AR, No.1 EVs: China’s brands tighten their global grip
The data shows a market moving in two clear rungs. The hardware and technology brands were the first to cement strong positions around the world. Examples where Chinese brands are leading market share and control:
- DJI controls more than 70% of the global drone market.
- Xreal holds 51% of global AR glasses.
- BYD overtook Tesla in global EV sales in 2025 — the first non-Western brand to lead the category.
- Bambu Lab entered Totem’s top 20 at #19 in a single product cycle.
Insta360 has become the default camera for professional filmmakers globally, chosen over pricier Western alternatives for performance. Bambu Lab, largely unknown outside maker circles three years ago, has altered the desktop 3D printing market with products that are both cheaper and technically ahead of incumbents.
Chris Baker, founder of Totem, is direct about why: “Engineering opened the door, and it’s a genuine technical advantage at a price point that forced the category to pay attention. But what's kept them ahead is a combination of product quality that holds up at scale, service standards that build repeat trust, and brand investment that has steadily closed the perception gap with Western competitors.”
Where brands falter is in trying to scale too broadly, too quickly. Many pursue what Baker describes as a “grand ambition to capture many geographies globally,” spreading limited budgets across dozens of markets and relying heavily on performance marketing. The result is shallow presence and weak brand equity.
ZTE’s RedMagic offers a counterpoint. Rather than chasing mass appeal, it focused tightly on the global gaming community of digitally native, high-spending audience and aligned product, content, and community around that group with localised support, niche KOL and KOC partnerships, and collaborations.
The payoff is tangible: RedMagic is the only Chinese brand ranked in the top five across YouTube, Facebook, Instagram, and TikTok, with a score of 98.2 out of 100 on Totem’s cross-platform index.
“The advice is to look at clusters of geography, right, so portions of continents or language groups that they can really be effective within, generally speaking, like a cluster of three to five countries within a region, right, is the most effective way," Baker adds.
A new wave: Culture-led brands rise in fashion and lifestyle
The second shift is newer and more complex: the rise of culture-led brands in fashion, beauty, and lifestyle. Chinese brands have historically carried a cheap and cheerful image, peddling low-end, endless products that compete on price. That is beginning to change as a new generation leans into identity rather than diluting it.
Case in point: Pop Mart’s ugly-cute Labubu, which became a global phenomenon without traditional Western marketing, driven instead by organic demand. C-beauty major, Florasis has taken a different route and has embedded enamel packaging, ink-painting motifs, and imperial design language in its aesthetics. It earns international attention precisely because it refuses to dilute its identity. Footwear label PANE applies a classic luxury model: no discounts, controlled distribution, and deliberate scarcity.
Totem says: “These brands aren't softening their origins for Western audiences. They're building on them — and winning editorial, community, and consumer trust in markets where Chinese brands have historically struggled to earn any of the three.”
The pricing and geographical trap
Despite improving product quality, many Chinese brands continue to underprice. Baker argues this is less about capability than strategy. “What most people get wrong… is the notion that they have to charge less,” he says, pointing instead to fragmented marketing and overreliance on performance channels. Many brands enter markets without a defined strategy, operating on marketing budgets as thin as 3-5%, and defaulting to price as the primary lever.
This creates a cycle: discounting erodes margins, which limits brand investment, reinforcing the need to discount. The problem is compounded by benchmarking against other Chinese brands rather than global incumbents. “Chinese brands still view their competitors as other Chinese brands… when they should be setting their targets on competing with the incumbent or global brand per market.”
Geographic overreach sits at the root of the issue. Brands often attempt to enter 30 to 80 markets simultaneously, fearing they will be locked out. In practice, this spreads resources too thin to build a meaningful presence. Baker’s recommendation is to concentrate: “Overspend in one cluster, light test-market level spending in some others.”
China outbound: Amazon is the primary launchpad
At the same time, global expansion continues to be powered by large e-commerce platforms.
Amazon is the number one gateway for Chinese brands going global. In fact, Amazon runs on 50% of Chinese sellers and 57% of all the top global sellers are Chinese.
- Amazon dominates the English-speaking West. Chinese sellers make up 50% of its global seller base and 57% of its top million-dollar sellers.
- AliExpress controls much of Russia and the Global South. It is moving upmarket with its Brand+ program, featuring over 1,500 verified brands, offering a more brand-friendly model than Amazon while avoiding private-label competition.
- Temu leads in Europe. Operating in 90+ markets with 416 million monthly active users, it generated over $15 billion in European GMV in 2025, powered by small Chinese factories. In March 2026, parent Pinduoduo launched Xinpinmu, a brand incubator to move beyond white-label goods.
- JD: Through its Ceconomy acquisition, JD is developing physical retail infrastructure in Europe with a goal of bring 1,000 Chinese brands abroad. “Everything we do takes 10 to 20 years,” says JD. “Only then will Western consumers accept Chinese brands and trust a Chinese retail platform.”
But these platforms come with constraints. They reward price competition and promotion, not storytelling or brand-building. Brands that scale on Amazon often struggle to transition beyond it. “The goal is to build hero products… special editions… brand collaborations,” Baker says, alongside investing in direct-to-consumer infrastructure—owned websites, social channels, and independent review ecosystems— to gradually move pricing above “survival” levels.
M&A’s accelarates the gap-closing and Chinamaxxing
Organic brand-building is one path to global relevance. M&A is faster, and Chinese companies are doing both at once.
Mainland firms announced 272 outbound M&A deals in 2025, up 88% year-on-year. The most prominent: Anta’s €1.5 billion investment for a 29% stake in Puma, making the Chinese sportswear group the German brand’s largest shareholder. Anta already owns Arc’teryx and Salomon. At a smaller scale, Youngor’s acquisition of Bonpoint, the high-end French children's wear label, reflects the same strategy. For Chinese companies confident in their operational strength, the missing piece is established Western brand equity and buying it is the quickest way to close the gap.
At the same time, younger consumers are more receptive. Survey data shows Gen Z scoring 10-20 points higher in openness to Chinese brands than older cohorts — a generation shaped by TikTok and RedNote, and increasingly comfortable with what China makes.
