With consumers tightening their belts in China, the battle between global fast fashion brands and local high street giants has intensified.

Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.

The French beauty giant’s two latest deals are part of a wider M&A push by global players to capture a larger slice of the China market, targeting buzzy high-end brands that offer products with distinctive Chinese elements.

Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.

While travel to Europe remains muted, Chinese shoppers are flocking to Singapore, Thailand and other Southeast Asian destinations where fashion retailers are hoping Lunar New Year marketing investments will pay off.

Local fashion designers experimenting with puffers and other down clothing have scored collaborations with outerwear companies like Moncler and attracted the attention of prominent international retailers like H.Lorenzo.

Despite the country’s protracted property crisis, deflationary pressures and other economic headwinds, its domestic luxury market is expected to grow 4 to 6 percent in 2024, outpacing both Europe and the US.

Wholesalers and online platforms like Dewu have taken a larger share of China’s growing grey-market for luxury goods — formerly dominated by individual sellers.