LSN : Markets : Guochao Wellness

Drivers: what's happening

Fuchun Resort, Hangzhou, China

Breaking the ‘made in China’ stereotype, a new era of premium goods and services made by Chinese brands for Chinese consumers has been conquering the local fashion industry and is now expanding to new markets.

According to Dao Insights, the term Guochao became popular in 2018 after Li-Ning, a major Chinese sportswear brand, made waves at New York Fashion Week with a collection that imagined streetwear through a Chinese lens. But it’s not just brands fuelling this rising sense of national pride among Chinese citizens. The pandemic and a draconian zero-Covid policy restricting all travel for nearly three years pushed Chinese consumers to look inwards for tourism, with rising destinations such as Hainan, as well as culture and consumption.

Beneath the surface of Guochao also lies China’s rise to be the world’s second-largest economy. Government propaganda has further fuelled a strong sense of national pride across all facets of life. Chinese individuals who previously embraced Westernisation without question have now become more culturally aware, and are seeking to reconnect with their own unique Chinese identity rooted in their culture and heritage.

Market snapshot

: Guochao (国潮), which translates as ‘national wave’ or ‘national trend’, refers to the rise of products that incorporate elements of traditional Chinese culture and style, refreshed with a modern twist

: Since 2021, this nationalist sentiment has resulted in a sustained consumer move away from Western brands such as Nike and Adidas in the Chinese market (source: Bloomberg)

: Brands active in the Guochao market have seen a growth rate three times higher than ordinary competitors. One brand estimates the market for Guochao fashion alone is worth £3.8bn (Rmb35bn, $4.8bn, €4.5bn) (source: 2022 China New Consumer Brand Development Trend Report via Jing Daily)

Guochao has propelled more domestic brands to gain market share and pushed international brands to integrate more Chinese cultural elements and aesthetics into their product design – not just with occasional Lunar New Year product drops but also with long-term investment in retail and experiences celebrating Chinese culture.

Gary Bowerman, founder of Asia Travel Re:Set, a travel and tourism consultancy, says the Guochao trend will become even hotter, and more creative and collaborative in 2024 by expanding across the travel, technology, luxury, beauty and wellness segments. He tells LS:N Global: ‘The recent wave of experimental collaborations between Chinese brands that seem non-complementary will continue. This will encourage international luxury brands to be more daring and innovative when working with Chinese brand partners.’

From hotels to spas and beauty brands, the Guochao wave has begun its wellness chapter and aims to bake Chinese heritage into its offer to reach local high-net-worth individuals (HNWIs) and, ultimately, the rest of the world.

Chinese individuals who previously embraced Westernisation without question have now become more culturally aware, and are seeking to reconnect with their own unique Chinese identity rooted in their culture and heritage

Grace Mou, Shanghai-based trend and culture forecaster

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LS:N Global’s Methodology

Market shifts: what’s new

Amandayan Spa, Lijiang, China

Heritage Spa Treatments

Catering for the discerning tastes of HNWIs seeking authentic cultural experiences, the luxury wellness hospitality sector in regions like Beijing in the north and Yunnan in the southwest is using these regions’ rich know-how and local resources to attract visitors.

In the capital, Rosewood Beijing’s Sense Spa offers treatments inspired by the Forbidden City’s lost remedies. These treatments combine historical practices – the Empress Dowager Cixi was famous for her longevity and beauty rituals – with modern therapies for rejuvenating skin. Techniques such as tui na, acupuncture and cupping are used in massages, while traditional Chinese herbs like chrysanthemum powder enhance hair treatments.

In Yunnan, the Bolian Resort & Spa Jingmai provides a tranquil escape amid the region’s signature Pu’er tea gardens, offering luxurious accommodation and authentic experiences like tea-picking and processing.

Other establishments draw on Chinese cultural elements, such as traditional Chinese medicine (TCM) and Tai Chi, to provide holistic wellness experiences. In the southwest, for instance, Amandayan Spa incorporates TCM principles into its therapies, including seasonal baths, heated bamboo aromatherapy and traditional foot reflexology. Guests can also participate in Tai Chi sessions led by experienced masters, fostering a deeper connection with Chinese culture and philosophy.

Bei TeaHouse at Amanyangyun hotel, Shanghai, China

Architectural Fusion

In addition to treatments and services, the Chinese wellness sector is also embracing Guochao in architecture and interior design. Aman Resorts moved a historic 2,000-year-old forest and houses 800km to create its Amanyangyun luxury wellness temple on the outskirts of Shanghai. Architects from the Singapore-based firm Kerry Hill Architects preserved several antique buildings from the Ming and Qing dynasties that were salvaged from their original site to avoid demolition.

‘The antique houses as well as the camphor trees had to be woven into the masterplan,’ Tanuj Goenka, director of Kerry Hill Architects, told Dezeen. ‘Amanyangyun is a living museum, not just because of the antique houses but also because of the guest experience,’ says Goenka.

Nestled near Hangzhou, The Fuchun Resort was designed by architect Jean-Michel Gathy to adhere to Feng Shui principles. The resort features a mix of Eastern and Western services, a renowned spa offering Himalayan yoga, Asian-inspired spa treatments and an 18-hole golf course.

Located in ‘the Venice of Shanghai’, Ahn Luh Zhujiajiao is a luxury resort built around Wu Feng Lou (the Court of Five Phoenixes), an ancient courthouse distinguished by its Huizhou architecture. The resort has a Chinese medicine centre, a Tai Chi room, a state-of-the-art spa and 35 villas, each with contemporary interiors designed by Malaysian architect Nicholas Fung.

su:m37 campaign, China

Premiumising C-beauty

As Chinese beauty brands (C-beauty) premiumised themselves while betting on Chinese ingredients, remedies, rituals and aesthetics, more and more affluent Chinese consumers started to switch – leaving international names like Estée Lauder, La Mer and La Prairie in favour of Chinese luxury beauty brands. Among China’s top 20 brands in skincare and colour cosmetics, C-beauty’s share doubled to 28% in 2022, from 14% in 2017 (source: Euromonitor International).

In July 2023, fashion and homeware label Shang Xia joined forces with C-beauty giant Florasis, known locally as Hua Xizi, on a limited-edition set inspired by the traditional Chinese tea ceremony. The collector’s set, shaped like Shang Xia’s classic circular gift box, comes with its best-selling setting powder, a pressed powder, a setting spray, a cushion foundation and a pair of white ceramic teacups.

LVMH-owned Cha Ling, which ‘proposes eco-designed beauty products formulated from detoxifying and regenerating Pu’er tea’, is gaining more loyal fans in China than ever before. Muihood, a beauty brand founded by British-born Chinese entrepreneur Charlotte Yau, adopts TCM philosophy and routines in its skincare offer to appeal to both Chinese and Western audiences.

Premium beauty infused with Guochao is increasingly going global. In March 2023, a premium K-beauty brand, su:m37, collaborated with Chinese haute couture designer Guo Pei to bring her Chinese craftsmanship and style to two skincare gift box designs released for International Women’s Day.

Analysis: what this means

The Blushing House by Documents, China

‘Proya, Florasis, Maogeping and many more have developed a significant following that is not easily replicated by international brands,’ Thomas Piachaud, head of strategy at Re-Hub, a consultancy using big data and AI for market research in Shanghai, tells LS:N Global. ‘As the rise of local brands increases, we should also see international brands either looking to react through product innovation to cater more for local needs or through the acquisition of local brands and operations to capture a similar trend.’

The next battlefield for luxury Guochao will be the perfume sector. According to various sources aggregated by Statista, China's fragrance product market has been growing exponentially and should grow from £1.5bn (Rmb14.1bn, $1.9bn, €1.8bn) in 2021 to £4bn (Rmb37.1bn, $5.1bn, €4.7bn) in 2026.

As Guochao further affects consumer sentiment, Chinese fragrance players like To Summer, Melt Season and Documents could become the most distinguished disruptors thanks to their understanding of unique Chinese scents related to history, culture, philosophy and aesthetics.

Expect more C-brands to set global ambitions, predicts Gary Bowerman of Asia Travel Re:Set. ‘Already, digital ad boards across Southeast Asia promote BYD cars,’ he says. ‘Heytea is very active in overseas markets. Trip.com sponsors all the aircraft bridges at Bangkok’s Suvarnabhumi Airport. [Food delivery service] Meituan and Tongcheng Travel are expanding their international supply chains. Luckin Coffee and [spirits brand] Luzhou Laojiao were official sponsors at the 2024 Australian Open tennis tournament, and [payment platform] Alipay+ sponsored women’s singles finalist Zheng Qinwen.'

Bowerman predicts that many more ambitious Chinese brands across athleisure, food and beverages, and technology will be inspired by the luxury sector’s embracing of Guochao and will follow this path to engage with international consumers.

As the Chinese economy experiences a spiral downturn, amid high unemployment among youngsters, for instance, it is too early to predict that Guochao will embody a Chinese cultural renaissance as more uncertainty is under way

Grace Mou, Shanghai-based trend and culture forecaster

Strategic opportunities

: China is home to a wide variety of local cultures and brands should not use Guochao as a generic cultural trend. To better understand the concept for your business, consider distilling the specific culture codes, features and elements instead of oversimplifying

: In the wellness tourism sector, consider how to develop authentic cultural experiences and treatments inspired by Chinese heritage, such as spa treatments that use local know-how and resources

: Guochao can be a fusion of West and East, and a blend of tradition and innovation. Adopt a bold approach and delight consumers with the unexpected, like Ahn Luh Zhujiajiao’s ancient courthouse-turned-modern wellness haven

: Guochao is not a solution fit for all marketing strategies in China – sluggish economic growth could dampen national pride and confidence. Be cautiously optimistic while tapping the growing momentum of this direction