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## China's Emerging "Attainable Luxury" Market China's consumer landscape is undergoing a significant transformation, with spending growth in smaller cities now outpacing that of their larger counterparts. A recent survey by consultancy MDRi revealed that while residents of first-tier cities reduced their luxury spending in 2024, expenditures increased in second- and third-tier cities. This phenomenon marks a "dual-engine growth" model for China's consumption market, according to Lisa Hu, partner and managing director at consulting firm AlixPartners, moving beyond a primary reliance on top-tier urban centers. Consumers in these smaller cities are increasingly embracing "attainable luxuries," referring to premium yet accessible goods. Brands such as **Arc'teryx** outdoor jackets, **Lululemon** yoga wear, and **Salomon** sports shoes have become commonplace in cities like Yongkang, Zhejiang province. This shift is also reflected in retail performance; a high-end shopping center in Nanjing, a second-tier city, generated over 24 billion yuan ($3.4 billion) in sales in 2024, surpassing even Beijing SKP to become the world's highest-grossing single-store shopping mall. Financially, households in smaller cities exhibit a higher propensity to consume. For instance, in the fourth-tier city of Yongzhou, Hunan province, households allocate 80% of their disposable income to consumer goods, compared to 60% in Shanghai. This elevated spending is partly underpinned by stronger consumer confidence; a McKinsey China survey indicated that 75% of millennials in lower-tier cities expressed confidence in China's economy, a figure 10 percentage points higher than their peers in higher-tier cities. Enhanced transport infrastructure and the expansion of e-commerce have further facilitated the spread of products and consumer tastes to these regions. ## Domestic Brands Capitalize on Shifting Preferences This evolving consumer behavior directly correlates with the strong performance of domestic Chinese brands. The 2025 Kantar BrandZ Most Valuable Chinese Brands Report highlights a robust resurgence, with the total value of China's Top 100 brands increasing by 25% over the past year, reaching a combined value of $1.2 trillion. A notable 68 brands within this top tier saw an increase in brand value, double the number from the previous year. Leading this growth are key players in the Chinese market. **Tencent** (**TCEHY**) maintained its position as China's most valuable brand for the fifth consecutive year, with a brand value of $198 billion, representing a 53% year-on-year growth driven by innovation across its consumer and B2B platforms. **Alibaba** (**BABA**) reclaimed the No. 2 spot, with its brand value rising 23% to $84.4 billion. Other significant performers include **Moutai** (**600519.SS**), valued at $80.0 billion, and **Douyin** (TikTok's Chinese version), which grew 34% to $76.2 billion. **Huawei** surged 56% to $64.2 billion, becoming the fourth fastest riser, while **Xiaomi** (**1810.HK**) soared 154% to $28.2 billion by aligning its product ecosystem with evolving consumer lifestyles. This surge underscores the "Guochao" trend, a growing preference among Chinese consumers for national brands. The report suggests that the success of these brands is deeply intertwined with strategic innovation, particularly in AI, and a proactive approach to overseas expansion. ## Divergent Trends in the Broader Luxury Landscape In contrast to the growth in attainable luxury and domestic brands, the broader traditional luxury market in mainland China experienced a significant downturn. According to Bain & Company's latest China Luxury Report, the market saw an 18-20% year-on-year decline in 2024, reverting to 2020 levels, and is expected to remain flat in 2025. Several factors contributed to this contraction, including subdued consumer confidence, economic uncertainty, and a decline in real estate values. Furthermore, a rebound in international tourism led to a shift in spending towards overseas markets, and consumers showed reluctance to accept frequent price increases without clearly justified value propositions. > "The market is going through an era of turbulence and uncertainty, where widespread underperformance may become the norm, with only a few brands emerging as winners," commented Bruno Lannes, a Greater China-based senior partner at Bain & Company. ## Investor Confidence Returns to Chinese Consumer IPOs Investor sentiment towards Chinese consumer stocks has shown a notable comeback, particularly in the Hong Kong IPO market. The market has seen a revival following a multi-year slump, with consumer companies playing a significant role. The IPO of fresh drinks chain **Mixue** attracted record orders of HK$1.8 trillion (US$231 billion) from retail investors. Other consumer sector debuts have also seen strong performance: cosmetics producer **Mao Geping** gained 153% since December, and jewelry maker **Laopu Gold** has risen over 1,000% since its June debut. Toymaker **Pop Mart** has soared 442% over the past 12 months, fueled by strong overseas sales momentum. > "Retail investors' enthusiasm is rooted in the fact that sizeable consumer companies with solid fundamentals and sector tailwinds have finally emerged after a lull," stated Richard Lin, chief consumer analyst at Shanghai-based investment bank SPDB International. He added, "If you're a market leader and your valuation is cheap enough, people are going to clamour for you." Overall, consumer stocks have gained 23% this year, according to a Hang Seng yardstick, signaling renewed investor confidence in the sector's underlying fundamentals and growth prospects. Funds raised from these IPOs are largely being directed towards product innovation and both domestic and international expansion efforts. ## Broader Economic Context and Outlook While specific consumer segments show dynamism, the broader economic context presents a mixed picture. The first half of 2025 saw strong retail sales growth, with double-digit increases across major high-value categories such as Electric Vehicles (EVs), appliances, sports, and outdoor goods, further evidenced by a robust 15.2% growth in gross merchandise value (GMV) during the 618 Shopping Festival. However, Chinese households continue to save aggressively. Total household deposits reached 163 trillion renminbi in H1 2025, with net new household savings deposits reaching 17.94 trillion renminbi in the same period, a sharp increase from 11.46 trillion renminbi in H1 2024. The personal savings rate has remained above 30% since 2020, reflecting ongoing uncertainty and a preference for financial security among consumers. Despite gradual recovery, China's Consumer Confidence Index (CCI) remains subdued near historic lows, with concerns about employment, economic stability, and the property market still prominent. Weiwei Xing, a Greater China-based partner at Bain & Company, anticipates a "downward trend through the first half of 2025, with a cautiously optimistic outlook emerging in the latter half of the year," leading to an overall flat performance for the luxury market. These trends suggest structural shifts in consumer behavior and capital allocation within China. Despite persistent challenges, the market reflects a dynamic and increasingly globally engaged China, with innovation and evolving consumer preferences propelling momentum in specific sectors.
## Trip.com Group (TCOM) Experiences Golden Cross Amidst Bullish Sentiment **Trip.com Group Limited Sponsored ADR (TCOM)** recently registered a "golden cross" technical pattern, a widely recognized bullish signal indicating potential upward price momentum. This development follows a period of robust performance, with TCOM shares advancing by 22% over the past four weeks leading up to September 10, 2025. ## Technical Indicators and Market Response The "golden cross" is characterized by a stock's 50-day simple moving average (SMA) ascending above its 200-day SMA. This pattern typically unfolds in three stages: an initial downtrend bottoming out, the shorter moving average crossing the longer one, and a subsequent phase of sustained price appreciation. As of recent data, TCOM's 50-day SMA stood at **$68.93**, surpassing its 200-day SMA of **$63.51**. The stock closed recently at **$74.12**, contributing to a market capitalization of **$48.42 billion**. This technical formation coincides with a favorable shift in market sentiment towards **Trip.com**. The company currently holds a **Zacks Rank #2 (Buy)**, reinforced by a positive earnings outlook. Notably, no earnings estimates have been lowered over the past two months, while three revisions have moved higher, contributing to an increased Zacks Consensus Estimate. ## Earnings Projections and Valuation Metrics For the current quarter, analysts project **Trip.com** to report earnings of **$1.15 per share**, representing an 8% year-over-year decline. However, net sales are estimated to reach **$2.54 billion**, marking a 12.35% increase from the prior year. For the full fiscal year, earnings are anticipated to rise by 2.79% to **$3.69 per share**, with revenue expected to increase by 15.15% to **$8.54 billion**. The upward trajectory in full-year estimates underscores growing analyst confidence in the company's future performance. From a valuation perspective, **TCOM** exhibits compelling metrics when compared to its industry peers. Its Forward Price-to-Earnings (P/E) ratio of **16.78** is notably below rivals such as **Booking Holdings (BKNG)**, which stands at 32.74, and comfortably under the travel sector's median P/E of 23.39. Furthermore, the company's Price-to-Earnings Growth (PEG) ratio of **0.95**, calculated using its 5-year EBITDA growth rate of 24.4%, suggests potential undervaluation, as it is lower than the Travel & Leisure industry's median of 1.09. A PEG ratio below 1 often indicates a bargain, positioning **TCOM** favorably against over 55% of its industry counterparts. The company also demonstrates sound financial health, reporting a current ratio of 1.33, a quick ratio of 1.33, and a low debt-to-equity ratio of 0.07, alongside total cash of **$11.17 billion** in its most recent quarter. ## Broader Market Context and Institutional Activity **Trip.com's** recent performance is situated within a broader post-pandemic resurgence in the travel sector. Over the past 12 months, the stock has appreciated by **61.90%**, with a year-to-date return of **10.33%**. The recent monthly gain of **21.46%** highlights significant investor interest. Institutional investors maintain a substantial presence, collectively accounting for **35.41%** of the company's stock. Notable institutional activity includes **Strs Ohio's** acquisition of 128,834 shares valued at approximately **$8.19 million** and **Mirae Asset Global Investments Co. Ltd.'s** substantial increase in holdings by 1,609.6%, now owning 12,920,955 shares valued at **$821.51 million**. ## Expert Commentary and Future Outlook Analyst sentiment surrounding **Trip.com** is predominantly bullish. **Zacks Research** recently upgraded **TCOM** from a "hold" to a "strong-buy" rating. Firms including **Mizuho**, **Barclays**, and **Sanford C. Bernstein** have also raised their price targets and issued "outperform" or "overweight" ratings. The consensus rating for **TCOM** is "Buy," with an average target price of **$76.98**. Specific price targets from prominent firms include **Jefferies** reiterating an **$85.00** target, **JPMorgan** raising its target to **$90.00**, **Barclays** to **$85.00**, and **Benchmark** maintaining an **$80.00** target. Looking ahead, analysts emphasize **Trip.com's** position as a "one-stop travel platform focusing on excellent service" and underscore travel as a "secular growth story." The integration of artificial intelligence is expected to further enhance user experience and drive cost efficiencies. Additionally, the significant growth potential in inbound travel to China, which currently represents less than 0.5% of the nation's GDP, positions **Trip.com** for sustained expansion. Investors will likely monitor upcoming earnings reports and further developments in global travel trends as key indicators for **TCOM's** trajectory.