BONUS Episode: Jacques Roizen on China’s revival

In this special bonus episode of The Luxury Society Podcast, host Robin Swithinbank speaks with Jacques Roizen, Managing Director, China Consulting at DLG, about the state of the Chinese luxury market and why we may be entering a new paradigm.

From recovery signals to the realities of a maturing industry, Roizen shares why the days of double-digit growth are behind us, and why optimisation and innovation, not expansion, will define the next era for luxury brands.

Drawing on insights from dozens of leading brands, he explains how market share has become the new metric of success, what the "new normal" looks like and why lessons from industries such as beauty now apply to luxury worldwide.

Tune in for:
– Why Chinese luxury consumption is stabilising and what the "new normal" looks like
– How market share, not raw growth, will define brand success in the years ahead
– Why optimisation is as critical as innovation for luxury brands today

Brought to you by Digital Luxury Group. Produced by Juliet Fallowfield, 2025  fallowfieldmason.com

Transcript

[00:00:01] Robin Swithinbank: Hello, and welcome to a special bonus episode of the Luxury Society Podcast, brought to you by Digital Luxury Group. I'm your host, Robins Swithinbank Now we're about to head into a mid-season break, but before we do that, we're gonna take a quick trip out east into our man in Shanghai, Jaques Roizen.

[00:00:17] Robin Swithinbank: Jack has been on the pod a couple of times already, and each time we've come away from our conversation thinking, wouldn't it be great if we could spend a little bit more time inside Jack's? Brain

[00:00:26] Robin Swithinbank: jack is managing director of the DLG company, China Consulting, and he's become something of an oracle on the Chinese luxury market, reading the ruins, the air, the tea leaves, no doubt. It's a bit more technical than that, but Jack has his finger firmly on China's pulse. So we thought we'd put together a special bonus episode of the Luxury Society Podcast just so we could hear more from him, and that's what we did.

[00:00:47] Robin Swithinbank: He was in Tokyo when we spoke to him last week. Here's our conversation.

[00:00:51] 

[00:00:52] Robin Swithinbank: jack. Thanks so much for coming back on the pod. how are things in Tokyo where you are today?

[00:00:57] Jacques Roizen: Uh, very good. Tokyo is, an exciting [00:01:00] place, for all observers of the global luxury market, including the Chinese luxury market. You know, I was just in Ginza where I was. Explain that. many of the locals, referred to Ginza, which is the luxury, neighborhood of Tokyo as Chinatown.

[00:01:17] Robin Swithinbank: Well, there we are. Well, let's let, that moves us neatly into talking about China, which is, your special subject. last time you were on, which was now a month or so ago, you said you'd underestimated the pace of recovery in China and that the barren period for Chinese luxury had perhaps even bottomed out, and might be about to register an uptick.

[00:01:33] Robin Swithinbank: What's convinced you that this is the new market reality and that the line on the graph is about to trend upwards?

[00:01:39] Jacques Roizen: Well, first of all, you know, we've been talking to, Two dozen luxury brands, including the largest ones. And they're all telling us that they had the best performance they've had in the last three years in China in July and August, and September. Has been softer, but not disappointing. Still trending much better than the [00:02:00] past two years.

[00:02:01] Jacques Roizen: so you don't have, you know, this many data points pointing in one direction. Without the luxury market, obviously doing better. a lot of people are. Concern that to some extent that performance in July, August and September was boosted, by the fact that last year's performance was so disappointing, so low comparables is what we're talking about.

[00:02:23] Jacques Roizen: but at the end of the day it's so radically better than what we've experienced before that I think, What we just witnessed is a normalization of the market. in 2019, the market had reached its potential. In China, we weren't able to see it because COVID made. The domestic market look incredibly good.

[00:02:46] Jacques Roizen: And then the post COVID, disappearance of travel restrictions, further, complicated reading the data. But today it's very clear that we have a market that's very similar to 2019, when it comes to Chinese luxury [00:03:00] consumption. And what we're witnessing is a new normal.

[00:03:03] Robin Swithinbank: Well, we talked about new normal before, haven't we? And we, we sort of wondered if that might be in the immediate aftermath of the pandemic. And we're talking about recovery here by the sounds of things we're even talking about quite rapid growth if we're going back to 2019. is this recovery going to lead to stability or is it going to lead to a market that bounces up and down with frightening regularity?

[00:03:24] Jacques Roizen: So, so first of all, I'm talking about the growth versus 2019 and we're essentially flat versus 2019. And, and so what I'm saying is. We're done having a market where luxury consumption by Chinese consumer overseas is growing double digit and luxury consumption by Chinese consumer in China is decreasing double digit.

[00:03:48] Jacques Roizen: We're now seeing both of them are going to be flat for the foreseeable future. and that's what I call the new normal. what I'm saying is the luxury industry when it comes to Chinese consumers and probably [00:04:00] globally, is done growing at the pace it's been growing for the last 25 years.

[00:04:06] Jacques Roizen: I mean, if you think about it, 25 years ago, the luxury industry overall was a quarter of what it is globally today. And so obviously that's not sustainable growth and obviously at some point we're gonna hit the upper limit of that expansion. And I think the luxury industry is about to enter a brand new era, which is, an era where.

[00:04:30] Jacques Roizen: It's not going to be about speed and about, you know, capturing new market shares in, uh, in new geographies. This is about competing in a mature market like so many other industries have to do.

[00:04:43] Robin Swithinbank: it's interesting to hear you talk about the market in these terms rather than the terms that have been banded about so much in the press and, and indeed on this podcast in the past few episodes where some of our guests have talked about this perfect storm.

[00:04:55] Robin Swithinbank: You know, are we in the eye of the storm at the moment or is what you are telling us that we're actually now moving [00:05:00] outta the eye of the storm? The eye of the storm was passed over the industry and we're moving into a season of, relative carbon stability, where perhaps, brands are gonna be, once again in a position to look ahead with a little bit more confidence and even to to growth.

[00:05:12] Jacques Roizen: Yeah, so first of all, I don't subscribe to this concept of a storm in my opinion, there was no storm. There was a lot of noise on the radar. That led people to think, oh my God, they we're growing like crazy in China during the pandemic, oh my God, we're decreasing like crazy in China when it reality, it was an adjustments to travel restrictions.

[00:05:33] Jacques Roizen: but I think far more consequential than the pressure that brands have been under for the last, three years as a result of this,travel restriction correction. We're now entering a phase where if you wanna perform, you're gonna have to outperform the market. And to a large extent in China at least, winners were winning.

[00:05:56] Jacques Roizen: So were losers. Like the brands that were losing market share, were [00:06:00] growing double digit positive because the market was expanding. In the last three years, it's been the opposite. The losers were losing. So were the winners. And, and so to a large extent, there was a lot of noise and lack of clarity and today there's gonna be an absolute clarity.

[00:06:17] Jacques Roizen: 'cause the market is essentially flat. And so now if you wanna win, you're gonna have to be a winner. If you're not a winner, you're gonna see your market share shrink. And so it's gonna be a lot easier, at least, in China and maybe globally, to spot who are the brands that are performing and who are the brands that are not.

[00:06:35] Robin Swithinbank: So does that mean that market share is the new metric of growth and the new metric of success?

[00:06:41] Jacques Roizen: absolutely. and that's always the case in mature industries. Right. In mature industries you don't compete by being at the right place at the right time. You compete by outperforming your competitors, and you do that with innovation, and you do that with [00:07:00] optimization, like for the luxury industry to a large extent.

[00:07:03] Jacques Roizen: This is a very new paradigm. This is a paradigm that's been existing for many other industries. I really like comparing it to the beauty industry, the beauty and cosmetics industry. this is an industry that, grew rapidly, fueled its growth through the market expansion in China and a few years ago, stopped benefiting from this new market.

[00:07:24] Jacques Roizen: And had to really compete with one another. and that's where you saw companies like L'Oreal, outperform their industry through a relentless investment in optimization and innovation. And at the risk of sounding harsh. That's where you've seen Este Ade not performing.

[00:07:44] Jacques Roizen: They haven't been relentless in their pursuit of optimization and innovation. And, for the luxury industry, this is a completely new paradigm where brands are gonna have to really focus on innovation and optimization, [00:08:00] which for, fashion collections, innovation is at the core of the DNA, but in everything else that they do.

[00:08:06] Jacques Roizen: It cannot just be about, market expansion and milking an existing DNA.

[00:08:13] Robin Swithinbank: The term innovation is one that luxury brands use all the time. most of 'em are very proud of the fact that they can innovate, create new products, perhaps tell the story in a new, in a fresh way. But optimization is a term that I hear used in the industry far less. What do luxury brands need to understand by the term optimization?

[00:08:30] Robin Swithinbank: I.

[00:08:30] Jacques Roizen: I think optimization is looking at all your existing processes and finding ways to drive more value to the consumer or, improve your, financial equation. You know, at Digital Luxury Group, the work that my team and I do. Is focused on helping brands optimize their digital operations, and we see vast opportunities to generate significant performance improvement in relatively rapid [00:09:00] periods of times.

[00:09:00] Jacques Roizen: and I think, it is just a sign of where many of the luxury brands have not had to focus on optimization because their growth. Was the forgiver of any, uh, inefficiencies in the system. and today when you cannot rely on growth, you're gonna have to rely on maximizing your profit margin.

[00:09:22] Jacques Roizen: And to do that, you're gonna have focus on optimization.

[00:09:25] Robin Swithinbank: That's quite interesting, not least because we had Audemars pIguet, CEO, Ilira Resta on the pod just last week, and she was talking about how, well, first of all, she talked about how opportunities came from a crisis and that the crisis gave an opportunity to restructure and to reposition. And she talked a lot about, well, I think optimization would be the word based on what you've just said and how you've described it.

[00:09:45] Robin Swithinbank: There's been a lot less of the sexy stuff as a consequence. but she would say that she's put the company on a firm footing. Now, of course, her background is in FMCG. She's worked in beauty and in fragrance and so on. So, in the immediate term, how do luxury executives need to be thinking in order [00:10:00] to maximize the opportunity that's now presented to them?

[00:10:02] Jacques Roizen: I think it's, it's going to be a radical shift in terms of talent management. I think you're gonna have a lot more people that come in with expertise and capabilities and a lot less, hiring around experience and background. for a long time the luxury industry. Has recruited as if it was a private members club.

[00:10:23] Jacques Roizen: And, and I think, we're, we're entering a, a phase where you're seeing, you know, more and more luxury brands, branch outside of the luxury ecosystem to bring talent. the CEO of caring, the CEO of Chanel, were not luxury executives before they joined their current roles. and I think this is a trend that's only going to accelerate as the industry recognize the need for.

[00:10:48] Jacques Roizen: Very talented people with expertise and capabilities. That's valued far more than the fact that, someone has spent 15 or 20 years in the luxury industry. 

[00:10:59] Robin Swithinbank: [00:11:00] Yeah, there seems to be a bit of a mindset shift. we had francois henry bennahmis on, a couple of weeks before, aria talking about his. New group, the Honorable Merchants Group, and he was very keen on the mantra that the post-war growth model is in rapid decline if it isn't already dead. and his approach therefore has been transformed by his own admission over the past 18 months to two years in the time he's been planning this group.

[00:11:24] Robin Swithinbank: And I suppose that becomes another example of what you're describing. He is talking about better rather than more. and I suspect he means that, first of all, in, in terms of the products itself and the brands, as they enter the group. But, maybe it's more than that. Maybe it's about the way that the brand is actually run behind the scenes.

[00:11:39] Robin Swithinbank: and the way it optimizes itself. Perhaps we should say.

[00:11:41] Jacques Roizen: Absolutely. we're gonna be talking about it, like it's something new, but it's only new to the luxury industry. It's not new to fast fashion. It's not new to sportswear industry. It's not new to the beauty industry. there's a stage of development that luxury is entering now, and [00:12:00] the brands that are the, the fastest to, really an inventory of the capabilities they have and the capabilities they need to reinforce.

[00:12:08] Jacques Roizen: That are acting accordingly are gonna be the ones that outperform the rest of the industry

[00:12:13] Jacques Roizen: at the end of the day operating a business when you've got a super popular hot products that people are getting on waiting list for, that's a very easy job. The hard job is when you're competing and demand and revenue growth cannot,delete , the potential, operational mistakes you may be making.

[00:12:36] Jacques Roizen: And so now's the time for luxury executives and the luxury industry overall To basically, enter a paradigm that is much more similar to what every other industry,goes through and the way they operate as a result.

[00:12:51] Robin Swithinbank: Yeah, well, I can feel myself as a luxury journalist being swept up in it. I mean, I've been reporting on the luxury industry for many years, and I don't think I've had a [00:13:00] conversation with the CEO about optimization at any point during that time. maybe this is the beginning, therefore of a new paradigm for me too, which, well, it'll be fascinating to watch and to see how the brands respond and indeed to see how the consumer responds and the market responds with it.

[00:13:12] Robin Swithinbank: just a, a final thought really. We started out talking about China, and I feel like we're talking about the whole world. We're talking about, the entirety of the luxury market. it felt not even that long ago really. as though there was one set of rules for China and another for the mature global luxury market.

[00:13:28] Robin Swithinbank: Is that still the case or are we now moving into a, another new paradigm where China is actually behaving in the same way as the mature established markets?

[00:13:36] Jacques Roizen: I think business rules and common sense are the same around the world and when it comes to running a business. two plus two equals four in every country, including China. And so, you know, as the beauty industry is discovering, when you discount by 50% your product eight times a year, at some [00:14:00] point you're gonna hurt brand desirability and value perception, including in China.

[00:14:05] Jacques Roizen: and like. A big part of what we do when we help brands is help headquarters understand that all their golden rules all their key principles apply in China too. And to a large extent, for the last 10, 15 years, there's been a narrative around it doesn't work like that in China. It's different here.

[00:14:28] Jacques Roizen: You can do this or you can do that. And, most of the time, , I come to the conclusion that that's not the case.

[00:14:34] Robin Swithinbank: Fascinating. Jack. once again, I, I feel like I've been schooled, on this occasion in, in the art of. Optimization And no doubt we're gonna be talking a lot more, and um, I shall enjoy being swept up in this new paradigm. Thanks so much for coming on and talking to us and sharing all that with us.

[00:14:46] Robin Swithinbank: I do hope you'll come on again sometime.

[00:14:48] Jacques Roizen: I look forward to it. Robin, thank you very much.

[00:14:50] Robin Swithinbank: Cool. Thanks Jack. Thanks so much for listening to the Luxury Society Podcast. We are going on a mid-season break, and we'll be back with more insider [00:15:00] conversations that help us unpick the glorious world of luxury in a few weeks time. In the meanwhile, if you've just discovered the pod and want to hear more, can we invite you to cast an ear back over the 20 or so episodes?

[00:15:10] Robin Swithinbank: We've now recorded some illuminating stuff in there from some of the luxury sector's, finest minds. For now, this has been The Luxury Society Podcast, brought to you by Digital Luxury Group, produced by Fallow Field and Mason, and hosted by me Robins within bank. .