Research insights and popular online discussions shed light on why Chinese brands are gradually surpassing international companies, with their retail outlets closing frequently making news.

The leading global jewelry company in terms of sales volume is experiencing a series of shop shutdowns throughout China — an action that highlights a larger trend of international brands withdrawing as customers increasingly favor items that provide better cost-effectiveness.

The Danish jewelry company Pandora, recognized for its rapid introduction of new products and annual worldwide sales exceeding 100 million items, revealed in its second-quarter financial statement released on August 15 that it intends to increase its initial target of closing 50 stores in China this year to 100 locations.

As per Pandora’s yearly financial statements, its sales in China reached their highest point in 2019 with 1.97 billion Danish krone (approximately $305.73 million). However, following the onset of the worldwide virus outbreak, sales within the Chinese market have consistently decreased, falling to 1.126 billion krone in 2021, 737 million krone in 2022, and 564.2 million krone in 2023. In the previous year, Pandora’s income from China dropped sharply to only 416 million krone, which is under one-fourth of what was recorded in 2019.

Are you curious about the major issues and developments happening globally? Find out more here:
SCMP Knowledge
Our latest platform featuring carefully selected content including explanations, frequently asked questions, analysis, and visual graphics, presented by our acclaimed team.

“For me, Pandora focuses more on style and flexibility; it’s not something I purchase with an eye toward maintaining its value,” said Vicky Wang, a Pandora fan from Jiangsu Province.

In the last three months, she has spent 7,500 yuan (US$1,044) on a handful of charm bracelets and is currently attempting to resell items she views as “spur-of-the-moment buys” through China’s used goods marketplace Xianyu.

Pandora’s shutdowns, which have yet to provide a response to an email inquiry for statement, are part of broader challenges faced by international brands operating in China.

As outlined in the 2025 China Shopper Report published in June by Bain & Company and Worldpanel, homegrown Chinese brands have consistently reduced the dominance of international competitors, reaching a 76% market presence by 2024. This marks an increase from 75% in 2023, 74% in 2022, and 73% in 2021. In contrast, this figure stood at 66% back in 2012.

Multinational companies shutting down their outlets in China consist of rapid fashion retailers like GU, which belongs to the Japanese global firm Fast Retailing Group, and Zara, based in Spain. Additionally, cosmetic and skin care providers including Aesop from Australia and Decorte from Japan are part of this trend. Supermarket chains like Walmart from the United States and Aeon from Japan have also declared exits from specific local areas.

Experts suggest that such retreats may be partially attributed to weak consumer expenditure under inflationary pressures, along with concerns about China’s economic future.

In the coming ten years or even more, we’ll enter an age of low-cost retail; this is a significant trend,” stated Chen Liping, a professor from Capital University of Economics and Business, in remarks shared earlier this month on the social media profile of a Chinese retail sector platform. “For certain businesses, it’s not merely about overcoming operational difficulties anymore, but rather about their very survival.

China’s
consumer price index for July
remained stagnant compared to the previous year, with ongoing producer price declines, signaling sustained low demand within the world’s second-largest economy against the backdrop of trade disturbances.

Wang mentioned that she was first attracted to Pandora’s charm bracelets because of their advertising idea of “one bead, one story,” which enabled her to make personalized memories. Nevertheless, her interest, similar to that of many younger shoppers, has been
shifting to safe-haven investments
.

Wang explained, ‘I began losing interest because, when compared to gold, Pandora does not retain its value [when reselling].’ ‘Many people around me also failed to grasp why I invested so much in silver jewelry.’

In the meantime, the widely recognized Japanese lifestyle company Muji, known for promoting a simple way of living among the middle-class population, has attracted attention due to its series of shop shutdowns in China. According to the Shanghai-based China Business Network, several Muji outlets across Beijing, Shanghai, Suzhou, and Changsha, along with those in Zhejiang Province, have closed down over the past few months.

At Rednote, a widely used Chinese social media site, the tag “#MujiPitfalls” has accumulated 1,800 entries and received 334,100 views within recent years. Users on this platform have expressed dissatisfaction with the brand’s offerings, pointing out that they do not live up to expected standards of quality and are often seen as excessively priced without providing sufficient utility for everyday situations.

A post made in May received over 1,000 likes, expressing disappointment about the 68 yuan (US$9.50) fee for a card holder, suggesting the price was better suited for a backpack. “For this amount, I’d prefer buying two cat dishes — they would be much more practical,” the user stated.

Muji didn’t respond right away to an email asking for comments, but it was cited by the China Business Network earlier this month as stating that certain store closings are regular steps taken to enhance operating efficiency.

More Articles from SCMP

Hong Kong ought to investigate opportunities for accessible tourism tailored to individuals with visual impairments.

PostMag this week features delicacies from the Tanka cuisine and humorists from Asia.

High-end residence on Redhill Peninsula in Hong Kong was robbed, with goods valued at HK$400,000 stolen

High-end villa developments proposed for Indonesia’s Komodo National Park face criticism as ‘a threat to tourism’

The piece was first published in the South China Morning Post (www.scmp.com), a top-tier news outlet covering stories about China and Asia.

© 2025. South China Morning Post Publishers Ltd. All rights reserved.