Editor’s Note
Richemont’s latest financial report highlights ongoing challenges in the Chinese luxury market, with CEO Nicolas Bos acknowledging competitive pressures. The company’s remarks underscore the strategic importance of cultural resonance in capturing consumer loyalty.
Richemont, one of the world’s three major luxury goods giants, released its fiscal year 2025 performance report on May 16, covering the period up to March 31. Notably, Richemont CEO Nicolas Bos acknowledged the pressure in the current Chinese market. Regarding competitors who hold a strong position in this market, he stated:
Richemont’s report for the fiscal year ending March showed group revenue grew 4% at constant exchange rates to €21.4 billion; full-year operating profit was €3.76 billion, down 1% year-on-year, with the operating profit margin dropping to 20.9%, a decrease of 240 basis points compared to the previous year.
By region, the Asia-Pacific market, where China is located, saw a 13% decline in annual sales revenue, making it the only core market to record a double-digit drop, with the Chinese market falling by 23%. During the post-earnings conference call, when asked by analysts about the impact of Laopu Gold, Richemont CEO Nicolas Bos stated that the jewelry market remains a market with a low degree of branding, and the group’s main task is still to gain market share from the non-branded market. A healthy market is where new players emerge across different markets and cultures. Laopu Gold is rooted in Chinese culture, driving the desire and vitality of the jewelry market, and also keeps Richemont maintaining its creativity.
Founded in 2009, Laopu Gold is a brand that pioneered the promotion of the “ancient method gold” concept domestically. It is also China’s first professional brand for ancient-method handmade goldware, ushering in a new product era for China’s gold industry. Since 2023, it has been listed for three consecutive years in the “Fortune to Respect Excellence – China’s High-Value Population Brand Preference Report.”
Simultaneously, Morgan Stanley, a globally renowned investment bank, recently stated in a research report on Richemont that it believes the competitive threat posed by the Chinese gold jewelry brand Laopu Gold to Cartier is still expanding and requires a high level of scrutiny. Cartier contributes over half of Richemont’s sales revenue and over 70% of its profit. The brand’s pressure in the Chinese market is considered by the market to be a main reason for the group’s weakness in the Asia-Pacific market.
Analysis of the report indicates that Laopu Gold’s single-store sales reached $45.5 million in 2024, surpassing Cartier, Van Cleef & Arpels, and Bulgari (the latter at $28-35 million), and may even be higher than LVMH’s level in China in 2024. As a domestic Chinese brand, Laopu Gold is sufficient to enter the competitive landscape of international first-tier luxury brands.
The report believes that Laopu Gold’s outstanding performance is enough to overshadow the perception that European luxury brands were once thought to have a solid moat, and it will not be affected by the perception that any local competitor in China poses a threat globally.
Analysis of the report suggests that Laopu Gold’s precise positioning in creating high-end brands, and factors such as product cultural heritage, are the main reasons for achieving explosive growth. “Precision has captured the rising ‘national tide’ cultural pride of local consumers amid soaring daily expenses.” Furthermore, compared to European jewelry brands that use K-gold as material, with products being pure gold or containing gold material (such as gold-set gemstones), Laopu Gold is more attractive to Chinese consumers.
According to Visible Alpha consensus forecasts cited in the report, Laopu Gold’s sales in 2026 may reach $3.3 billion, an 18-fold increase over five years.
