China's economy is slowing and luxury retailers are struggling to find their footing, although overall retail sales seem to be not only holding their own but barreling forward.
Luxury brand Louis Vuitton, for example, has closed a number of its China outlets over the past couple of months, including in the upscale Guangzhou shopping centre La Perle as well as stores in Harbin and, further west, in Urumqi.
"We may be closing down a couple of stores in China, where we have two stores in second-tier cities," said Jean-Jacques Guinoy, chief financial officer of parent company LVMH, said during a sales call in November.
In a media release, the company said it will "continue investing" in its current store network. New stores, however, are unlikely.
LMVH is hardly alone. British fashion house Burberry said sales in China are weak.
Italian brand Prada blamed China for a 28 per cent drop in profits earlier in 2015, the first in four years. Imports of luxury watches to China have plummeted, with drops of 40 per cent in some months.
Consultancy firm Bain & Company expects China's luxury market to decline by 2 to 4 per cent in real terms this year. This is largely due to ongoing restrictions on spending as a result of the government's austerity campaign and more price-sensitive shoppers - two factors that benefit off-price sales and drive purchases abroad.
Bain & Company said the Chinese market has arrived at its "moment of truth" with all key luxury players struggling to revitalise the market. This is likely to have an impact on Christmas sales, with luxury brands giving way to more affordable consumer brands even as retail sales as a whole rise.
With Christmas just around the corner, fewer Chinese shoppers are likely to be found buying up expensive watches or purses at home. This contrasts with companies in other sectors, which are expanding, and with the tremendous success that online retailers have been enjoying.
As LVMH was closing outlets, Apple opened its fifth store in Beijing and 27th across China at the end of November. Less than two weeks later, the US tech giant opened its 28th outlet in Nanning, capital of South China's Guangxi Zhuang autonomous region.
Apple's store openings underscored the statistics for November, suggesting consumption in China may yet prove to be more than many suspect.
Retail sales during the month jumped 11.2 per cent year-on-year to 27.23 trillion yuan (US$4.2 trillion or S$5.9 trillion), according to the National Bureau of Statistics.
The number was higher than anticipated and was generally seen as a hopeful sign amid the slowing Chinese economy and the gloomy fortunes of luxury goods makers.
"Luxury brands in China have been hit by the government's austerity campaign, which has had a big impact on the culture of gift-giving," said Tom Rafferty, Asia economist at The Economist Intelligence Unit.
"There are early signs that luxury sales may now be normalizing after around three years into the campaign, and most brands in the industry have made efforts to shift their appeal away from the types of consumers they targeted in the past."
Rafferty added that another major factor has been the growing numbers of Chinese traveling overseas, where they can purchase luxury items at much cheaper prices than at home, where taxes on luxury goods are high.
"With income growth holding up steadily in China, demand for luxury goods will still grow but not at the rates recorded in the past," he said.
Another factor impacting sales this season is the growing trend of shoppers from the Chinese mainland capitalizing on the relatively cheap value of currencies in markets like Japan and South Korea, as opposed to the more traditional shopping destinations of Hong Kong and Singapore.
Over the past few years, Chinese outbound tourist flows have guided the performance of Asian retail markets, supporting Japan, South Korea and parts of Southeast Asia at the expense of China, according to Bain.
As traditional retailing looks to redefine itself and luxury companies struggle to find solid footing, e-commerce has been the big winner.
As a major driver of sales, e-commerce is rapidly taking pride of place in the Chinese retail landscape.
Perhaps ironically, the sheer success of online shopping may be clouding the outlook for traditional bricks-and-mortar retailers this season.
Internet-driven shopping events throughout November, most notably Singles Day on Nov 11, were so successful that they prompted questions about whether they would take the wind out of traditional retail's sails.
Online retailers are claiming their rightful spot in the holiday shopping universe for the first time this year. During this Christmas season, online shopping in China has not been restricted to electronic products or esoteric items not to be found anywhere else.
Rather, shoppers are now taking to their computers, tablets or smartphones for their everyday shopping as well.
For example, China's online grocery market is now the largest in the world and is set to increase fivefold to US$180 billion by 2020. This is US$70 billion more than the other top nine online grocery markets combined, according to the latest research on global grocery trends by IGD, which specializes in the food and grocery markets.
Shoppers are more open to online shopping than ever before, thanks in large part to the spread of mobile networks and the increasing popularity of digital shopping festivals. E-commerce now accounts for about 10 per cent of all consumer retail in China.
"The two things that can power the e-commerce market are consumption upgrades and consumption sinking," said Yolanda Zhang, research manager at market intelligence firm IDC.
"On one hand, retailers need to work on better-quality imported overseas products. On the other hand, retailers need to make e-commerce accessible to tier-four or -five cities and rural areas."
And pre-Christmas shopping events have done well, even while remaining China-focused.
"It is likely that Singles Day, being so close to Black Friday - which seems to be the choice for international retailers to use as their big sales day - will remain a China-specific event for now," said Michael Yeo, a Singapore-based senior market analyst at IDC.
Black Friday is a major shopping day in the United States which has become popular beyond the US in recent years.
"There really isn't much going on for Singles Day outside of China yet. It remains very much a mainland-focused event."
Despite the clouds on China's economic horizon, shopping is likely to continue unabated, not only during Christmas but through 2016.
Retail sales in China added up to about US$1.38 trillion in 2009 and had more than doubled to more than US$4.1 trillion by 2014.
The growth of retail sales in November, which followed rises of 11 per cent in October and 10.9 per cent in September, suggests the future is not all bad. There has not been a single month this year when retail sales in China did not grow by more than 10 per cent.
"We expect further improvements in the data over the coming quarters, which ought to quash any lingering concerns that China may be about to enter a deeper downturn," said Julian Evans-Pritchard of research firm Capital Economics in a note.
Even for luxury retailers, the outlook may be clearing up, particularly as the anti-corruption campaign in China shifts gears, wrote Chang Liu, also of Capital Economics.
"The campaign is no longer causing additional cutbacks in spending," he said.