Monday Briefing: Bain’s Forecast, the 618 Evolution, and Khaite’s Shanghai Debut

Start your week with sharp analysis and fresh insights into China’s latest cultural, luxury, and consumer trends. Monday Briefing connects the dots between local shifts and global repercussions, highlighting relevance to the luxury market, business strategies, and modern lifestyle trends shaping our world today.

With half of 2025 behind us, the global luxury sector stands at a critical juncture. A convergence of macroeconomic uncertainty, shifting consumer values, and rising generational divides is forcing brands to reassess not just how they grow, but why they matter. This week’s developments, from Bain’s recalibrated forecast to a reimagined 618 and Khaite’s tactile Shanghai debut, reveal that the winners in this new era won’t necessarily be the biggest or oldest, but will favor those with a strong identity, purpose, and execution.

Bain Forecasts Luxury Contraction as Brand Gap Widens

In its latest report, released in conjunction with Altagamma, Bain & Company warns that the personal luxury goods sector is facing its most disruptive year in over a decade. Amid economic fragility and cultural realignment, Bain outlines three scenarios for how the market could evolve in 2025.

The firm’s most likely scenario, which it calls a “Continued lip,” foresees a contraction of between two and five percent by year-end. A more optimistic “In-Year Rebound” sees the market ending the year somewhere between two percent smaller and two percent larger, while a more severe “Demand Dip” projects a prolonged downturn with the market shrinking by five to nine percent.

Still, not all brands are affected equally. In the first quarter of 2025, the performance gap between industry leaders and laggards widened to 1.5 times the size it was a year ago. Top-performing brands maintained growth through clear value propositions, strong product fundamentals, and considered pricing structures. In contrast, underperformers lost momentum as they struggled to connect with today’s more discerning consumers.

In China, Bain notes that while middle-class consumers remain cautious, interest in emerging local luxury brands is gradually rising, especially among younger demographics. At the same time, “essential” product categories and outdoor-driven experiences are outperforming the market average, signaling not just a demand shift, but a deeper value reset.

Amid volatility, clarity wins. Brands that re-anchor their value in distinct identities and consistent quality are more resilient and actively widen their lead.

“Value Over Volume” Defines China’s Longest-Ever 618 Festival

This year’s 618 Mid-Year Shopping Festival officially wrapped last week after more than a month of activity, but the event’s true significance lies not in its duration but in a shift in purpose. For the first time in years, China’s major e-commerce platforms downplayed absolute gross merchandise volume in favor of more nuanced success metrics such as user base growth, customer satisfaction, and trend-driven category development.

On Taobao and Tmall, the results were solid: 453 brands crossed the one-hundred-million-yuan mark, while the number of buyers grew at a double-digit pace year-on-year, reaching the highest participation level in 618 history. Streamlined mechanics (such as simplified promotional rules and an improved user experience) and expanded discount vouchers allowed brands to focus on operational efficiency and sustainable sales outcomes.

JD.com echoed this trend with record performance. The retail giant doubled its number of purchasing users year-over-year and reached a new all-time high in daily active users. While electronics and home appliances continued to anchor its strength, rapidly growing categories like beauty, fashion, and daily essentials surged in popularity. Importantly, over one million offline retail partners saw strong order growth, signaling a deepening integration between online and offline ecosystems.

The 618 festival’s evolution from a price war to a value race mirrors the broader recalibration in Chinese consumer culture. Brands that prioritized experience, convenience, and trust over deep discounting are poised to gain over the long run.

Khaite Makes Immersive China Debut at Réel Shanghai

As legacy brands reorient themselves, a new generation of design-driven labels is quietly redefining the landscape. New York-based fashion house Khaite opened its first retail presence in China, a store-in-store concept located in Réel Department Store in Shanghai’s glitzy Jing’an district.

Founded by creative director Catherine Holstein in 2016, Khaite has developed a cult following for its fusion of strength and sensuality, balancing architectural tailoring with intimate materiality. The Shanghai space, designed by longtime collaborator Griffin Frazen, features a circular structure that evokes a moody, almost subterranean sensory journey. The store’s physical language mirrors the brand’s worldview: one shaped by personal memory, emotional tension, and quiet defiance.

This debut marks Khaite’s strategic entry into Asia, targeting Chinese consumers increasingly drawn to emotional storytelling, tactile experiences, and brands with strong artistic direction. In a retail environment saturated with visual noise, the label’s restrained but immersive approach offers a powerful counterpoint for Shanghai and the surrounding region’s wealthy and discerning consumers.

Khaite’s launch underscores that in today’s China, space is narrative. Experiential retail—when executed with conviction—can deepen brand resonance far beyond product alone.

The Bottom Line

Luxury in 2025 is no longer about blanket growth. Those days are long gone. Today, precision and presence matter: knowing who your customer is, how they feel, and why they should care. Bain’s market contraction forecast is sobering, yet not definitive. As China’s digital commerce matures and consumers increasingly seek meaning over excess, the opportunity lies not in racing toward scale, but in refining the message, the experience, and the emotional logic behind the brand.