OTB's Strategic Patience in China's Evolving Luxury Market

In the shadow of China's volatile luxury market post-pandemic, OTB Group has emerged as a case study in strategic patience. While the market's 2024 slump-a 18–20% decline in domestic spending-tested the resolve of even the most established players, OTB's calculated investments and adaptive strategies underscore its commitment to long-term value creation. By balancing short-term resilience with forward-looking market positioning, the Italian fashion conglomerate is navigating a landscape defined by shifting consumer behaviors, pricing pressures, and the rise of digital-first engagement.

The Post-Pandemic Paradox: A Market in Flux

China's luxury sector, once a beacon of global recovery in 2023, has since faced headwinds. According to a Bain report, the market's 2025 flat trajectory reflects lingering economic uncertainties and the persistent pull of overseas shopping, with 40% of Chinese consumers redirecting spending to international destinations in 2024. This trend, fueled by price disparities (up to 30% in Japan) and the allure of grey-market arbitrage, has forced brands to rethink their value propositions.

OTB, however, has not retreated. Despite a 5.7% decline in Chinese sales in 2024, the group opened 28 new stores across the country, signaling confidence in the market's eventual rebound, according to a WWD report. This expansion aligns with its broader strategy to deepen physical and digital footprints in key cities, leveraging China's enduring role as a hub for high-net-worth individuals and its growing middle class.

Pricing, Digital, and Cultural Localization: OTB's Trifecta

A critical component of OTB's approach has been addressing pricing misalignments. As noted by BCG, global pricing strategies and purchase limits-implemented by OTB and peers-aim to close the gap between mainland China and international markets, according to OTB's financial statement. For instance, Diesel and Maison Margiela, OTB's flagship brands, have adopted tiered pricing models to mitigate arbitrage while preserving brand equity, as reported in an NSSmag article.

Simultaneously, the group has doubled down on digital transformation. Platforms like WeChat and Xiaohongshu now serve as critical touchpoints for engaging Gen Z and millennial consumers, who prioritize authenticity and community-driven content. Collaborations with Key Opinion Leaders (KOLs) have amplified OTB's reach, with influencer-driven campaigns driving a 20% increase in online conversions in 2024, WWD reported.

Cultural localization further strengthens OTB's position. By integrating Chinese zodiac motifs into collections and partnering with local artists for pop-up exhibitions, the group taps into the emotional resonance of heritage while maintaining its European design DNA. This duality-global sophistication with local relevance-has proven vital in retaining Very Important Customers (VICs), a demographic that Bain & Company identifies as a key driver of long-term resilience.

Diversification and DTC: Mitigating Risk, Capturing Growth

OTB's 57% DTC sales contribution in 2024 highlights its shift toward direct-to-consumer channels, a move that enhances margin stability and customer data insights, according to OTB's financial statement. This strategy contrasts with the volatility of wholesale, which saw a 5.7% decline in China in 2024, as reported by WWD. By prioritizing owned e-commerce platforms and flagship stores, OTB reduces reliance on third-party intermediaries and gains greater control over pricing and customer relationships.

Geographically, the group has also diversified its exposure. While China's slowdown posed challenges, growth in Japan (16.3% sales increase) and North America (13.3% growth) offset losses, per NSSmag's coverage. Additionally, OTB's foray into the Middle East and Mexico-markets with untapped luxury potential-positions it to capitalize on emerging demand centers, WWD observed.

The Road Ahead: Patience as a Competitive Advantage

OTB's approach in China is not without risks. The grey market remains a persistent threat, with grey sales accounting for up to 70% of official sales in some categories, OTB's financial statement indicates. However, the group's focus on premiumization-emphasizing timeless designs and ethical production-aligns with a broader industry shift toward sustainability and transparency.

Looking ahead, OTB's cautious optimism is grounded in market indicators. Bain & Company anticipates a modest recovery in China's luxury sector in the second half of 2025, driven by pent-up demand and policy tailwinds. OTB's continued investments in store openings, digital innovation, and pricing discipline position it to outperform in this environment.

For investors, OTB's strategic patience in China exemplifies a long-term mindset. By balancing short-term pragmatism with visionary market positioning, the group is not merely weathering the storm-it is laying the groundwork for a durable, value-driven presence in one of the world's most dynamic luxury markets.