al to acquire Kering’s beauty business, including the rights to develop Gucci Beauty once its existing license with Coty expires in 2028. ​The first green shoots in China – but are they real? ​After two years of sluggish recovery amid property market turmoil and consumer caution, brands are watching for any hint of a rebound. ​“The stock market’s recent uptick has likely played a role in improving consumer sentiment, especially luxury and prestige consumers, but its sustainability is questionable,” Jacques Roizen, managing director at Digital Luxury Group, told Inside Retail. “Historically, the stock market and real estate performance in China have been closely correlated.” ​“This time around, we’ve seen a divergence, with the stock market rising while the real estate sector continues to struggle. This raises concerns about whether this recovery is truly robust or simply temporary, as the stock market performance is far less influential than the real estate market when it comes to stimulating consumer confidence. We are not out of the woods yet, and consumer confidence is still fragile.” Last week, LVMH reported its first quarterly growth of the year, with Mainland China turning positive in the third quarter. In September, the group’s retail sales of luxury goods in mainland China ticked upward for the first time this year. Hermes’ finance chief Eric de Halgouet said the company has seen more stability in real estate in Tier 1 cities in China and strong and dynamic business during the Golden Week in China. Meanwhile, L’Oreal’s prestige beauty brands, including Lancôme, Helena Rubinstein and Valentino Beauty, saw demand tick upward. Hieronimus told analysts that China’s overall beauty market grew around 3 per cent during the quarter, ending a prolonged contraction. Still, that recovery remains fragile. “One quarter doesn’t make a trend,” he cautioned, echoing what many in the consumer sector quietly fear, that China’s growth story, particularly in discretionary categories like beauty and fashion, remains vulnerable to sudden reversals. A market of contradictions The beauty market’s rebound is being driven not just by consumer optimism, but by the mechanics of China’s powerful e-commerce ecosystem. Online sales remain the dominant growth channel, with platforms like Tmall, JD.com, and Douyin (TikTok’s Chinese counterpart) rolling out aggressive discount campaigns. “A key driver of the beauty category’s growth in China has been the online channel, fueled by heavy reliance on platform-sponsored coupons and discounts. These subsidies are effectively reducing the pricing gap between prestige and mass-market brands, benefiting the former,” Roizen said. However, he added that the model is not sustainable in the long term. According to the expert, the beauty giant risks becoming dependent on an artificial lift provided by tech platforms, whose own profitability is under pressure. Once subsidies taper off, as they inevitably must, demand could soften again. “It’s also worth noting that a portion of the revenue being recorded by beauty brands is actually financed by these platforms rather than fully paid by consumers,” Roizen said. Prestige shines, mass-market lags While L’Oreal has regained momentum in US makeup, its affordable lines in China, including L’Oreal Paris and Maybelline, remain under pressure. According to the expert, the company’s performance in China also reflects a growing bifurcation between prestige and mass-market segments. “L’Oréal’s overperformance in the prestige beauty market reflects a broader trend in China, where high-end international brands have been doing better than local or mass-market competitors since Q2,” Roizen said. “This is partially due to the pricing dynamics created by the coupons. However, the days when foreign brands could rely on their international prestige alone are over.” He added that Chinese consumers are more discerning than ever, and market performance is becoming increasingly polarized. Only brands like L’Oreal, with a clear and consistent strategy, a distinctive value proposition, a strong price-to-value equation, and genuine authenticity will emerge as winners. “The competition is fierce, and the ability to adapt to these shifts will determine whether brands like L’Oréal can sustain their momentum in the long run,” he concluded.