This time last year, Shanghai, China’s fashion and luxury capital, was under a brutal and ruthless COVID-19 lockdown. Glitzy high-end shopping malls and streets lined with brand flagship storesAlmost empty.

Today the situation is very different. On a recent weekend, crowds of people flocked to the upscale shopping venues in and around Nanjing Road, which has been China’s epicenter of glamour since the country’s first major department store opened there in 1917.

“The spending has become more aggressive,” said 24-year-old Suni Zhang, waiting in line to enter the Chanel store at Shanghai’s Plaza 66, a shopping mall filled with the world’s most expensive clothing brands. Ms. Zhang works for a consulting firm. In the past, she would buy six handbags a year. Now, she buys up to five handbags a month.

“I switch back and forth every day,” Ms. Zhang added. “When Shanghai was locked down, I felt it was meaningless and should just enjoy life as it is.”

Many Western fashion and luxury brands have benefited from consumers’ renewed willingness to spend. Last month, LVMH, the world’s largest luxury goods giant by sales, reported a 17% year-on-year increase in first-quarter revenue. The group owns brands such as Louis Vuitton, Tiffany and Dior. The French company’s largest division (fashion and leather goods) saw first-quarter revenue increase by 18% year-on-year, largely driven by a rebound in the Chinese consumer market.

Last week, LVMH shares surged to a record high, making it the first European company to have a market value of more than $500 billion. French rival Hermès said sales in Asia (excluding Japan) rose 23% in the first quarter, “mainly driven by very good sales in China during the spring period.”

Brunello Cucinelli, which sells $4,000 blazers and “understated luxury” trends, saw its first-quarter sales surge 56%. Luca Lisandroni, co-CEO of the Italian brand, said 2023 would be a “golden year” for the Chinese market.

Luxury consumption in China is rebounding even faster than the country’s overall economy. According to China’s National Bureau of Statistics, retail sales of jewelry, gold and silver surged 37.4% year-on-year in March, more than three times the rebound in overall retail sales. Jewelry sales in March set a record for the same period in China’s history; in fact, jewelry sales in March this year were second only to the gift-giving season before the Spring Festival.

“We expect China to be the main growth engine for the luxury goods industry this year, especially given slightly slower sales in other major markets such as the U.S. and South Korea,” Edward Aubin, an equity analyst at Morgan Stanley, said on a conference call last week.

He also said big brands with status symbol value “at the top of the price pyramid” such as Chanel, Hermès and Louis Vuitton were outperforming rivals such as Gucci and Burberry, both of which recently changed designers.

“Much of the early-morning consumption driving the rebound right now has less to do with middle-class Chinese and more to do with wealthy people spending,” Obin said, noting that he expectsMiddle class spendingIt will restart later this year.

Chinese desire for big-name luxury goods is nothing new. For more than a decade, the country of 1.4 billion consumers has been a major market for Western luxury goods, accounting for as much as a third of their revenues, two-thirds of which occurs outside mainland China as Chinese tourists flock to Hong Kong, Tokyo, Paris and elsewhere to avoid high import tariffs and consumption taxes at home.

But the luxury goods industry suffered its worst year on record in 2020 as China closed its borders to curb the coronavirus pandemic. Now, after three years of mostly online shopping, many shoppers in China are delighted to be able to touch fabrics, try on handbags and sunglasses, and share their shopping experiences with others.

In Shanghai’s Zhangyuan, a preserved and restored Shikumen building with polished wooden door frames and elegant stone columns, crowds gathered outside the Dior store waiting for celebrities to appear. The onlookers didn’t have to wait long before Yi Nengjing, a famous Taiwanese singer, walked out of the store accompanied by a young woman carrying a white Dior bag big enough to fit a flat-screen TV.

Zoe Zhou, who was searching for handbags used by members of the South Korean pop group Blackpink at a Dior store, said she had seen a rush of luxury goods in her hometown of Nanjing, with people lining up outside stores in the city center.

“After the epidemic was eased, I bought a lot of bags,” said Ms. Zhou, who was disappointed that the bag she wanted was sold out. “Now that we can go abroad, the price difference between China and abroad is quite big.”

Many luxury brands have raised prices in recent months, particularly in China, but traveling abroad remains much more difficult than before the coronavirus pandemic.

Tickets are more expensive now, and there are significantly fewer routes to overseas. The Chinese government’s efforts to strengthen national security have also made it more difficult for people to obtain or renew passports.

The trend of Chinese shoppers turning to domestic consumption is expected to continue as domestic destinations like duty-free zones on the tropical island of Hainan continue to gain popularity and retail hotspots such as Chengdu and Hangzhou continue to emerge. Posts about out-of-stocks and long queues are common on social media.

“The rebound in domestic luxury consumption may be well underway, but overseas travel is still far from pre-COVID levels and we don’t think Chinese tourists will return to Europe in previous numbers anytime soon,” said Thomas Chauvet, head of luxury goods research at Citigroup. He added that short-haul destinations such as Hong Kong, Macau and, given the current weakness of the yen, possibly Japan could see the return of Chinese consumers more quickly.

Not every luxury brand is seeing sales growth. Last week, lackluster quarterly results from Kering, the parent company of Gucci and Balenciaga, reminded investors that a rising tide in China’s luxury market does not necessarily lift all boats. Paris-based Kering’s revenue in the first three months of 2023 was only $2.3 billion.Increased by 1%due to a slowdown in its U.S. business and wholesale business, a decline in Gucci’s popularity, and the launch of the Balenciaga brand at the end of last year.AdvertisingmoveControversyStill fermenting.

“Strong brands with huge brand appeal are becoming more powerful,” said Antwin Berger, an analyst at BNP Paribas Exane.

“It helps to have a bigger brand,” he added.

The same is true for the luxury goods market. Claudia Dalpizio, a senior partner at Bain & Company, estimates that by 2030, the number of middle- and high-income consumers in mainland China will double to 500 million. She predicts that Chinese people will purchase about 40% of the world’s luxury goods by then.

“While African and Southeast Asian countries may be emerging markets for luxury goods,” Dalpizio said, “the sheer size of the Chinese luxury market makes it unique and strategically important.”