During the end of April, Prada quietly debuted its first standalone restaurant in China, housed in the storied Rong Zhai villa in Shanghai. The name of the space, Mi Shang, which roughly translates from Chinese to mean enamor, speaks to the ambience presented. Conceived by legendary Hong Kong filmmaker Wong Kar-wai, the restaurant’s interior carries the unmistakable cinematic language of In the Mood for Love. Step into one of the velvet booths and it’s easy to imagine Maggie Cheung and Tony Leung sharing a silent glance across the table.
Heading the kitchen is Italian chef Lorenzo Lunghi, whose menu is a deliberate blend of Chinese and Italian traditions. Think tortellini stuffed with Chinese dumpling fillings, Chinese cabbage paired with a creamy cacio e pepe sauce, or Chinese mushrooms dressed with salsa. The idea, as Wong has put it, is a “mirror image between Italy and China, Milan and Shanghai, each reflecting the other.” That mirrored sensibility is something of a signature in Wong’s films, where visual symmetry often holds emotional weight.
Open daily from 10 a.m. to 10 p.m, the restaurant serves coffee, lunch, afternoon tea, and dinner. Reservations are required via a mini program on WeChat, with a RMB 300 (USD 42) deposit, and meal durations are capped at either 90 or 120 minutes.
This isn’t the first time a luxury brand has dabbled in dining in China. Before the pandemic, brands like Gucci, Chanel, and Tiffany had already tested pop-up cafes and boutique coffee counters in China’s major cities, with Beijing, Shanghai, Shenzhen, and Hong Kong being the usual suspects. But those ventures were often fleeting and heavily branded, more marketing installations than hospitality businesses, typically tied to the launch of a new store or product.
“Cafes don’t need a full kitchen or exhaust system,” Wang Zhendong, chairman of Shanghai Feiyue Investment Management, told Jiemian News. “The lighter setup integrates more easily with fashion retail spaces and keeps overhead low. It’s a natural extension for lifestyle branding.”
A bigger shift came in 2022 when Louis Vuitton launched The Hall, its first full-service restaurant in Asia, inside a restored Qing dynasty guildhall in Chengdu’s Taikoo Li. A representative from Swire Properties told 36Kr that acquiring a restaurant license for a heritage site was no small feat, requiring months of negotiation and planning.
Still, with the brand halo shining bright, luxury names can turn food and drink into profit. According to Swire Properties, Maison Margiela’s global flagship cafe in Chengdu pulled in up to RMB 40,000 (USD 5,600) per day when its foot traffic peaked.
Yet luxury brands know their strengths, and running a restaurant usually isn’t one of them. Most outsource operations to seasoned partners. The Hall’s kitchen is managed by Yunmi Group, which also runs several high-end concepts across China, including the buzzy Da Vittorio in Shanghai.
Whether it’s a sit-down restaurant or a walk-up cafe, these ventures are all about delivering an experience that complements the product. Several luxury executives say that in a retail environment where foot traffic is everything, the primary goal is simply to get people in the door.
Once inside, the theory goes, customers get a taste—literally and figuratively—of the lifestyle a brand wants to project. That coffee? Just RMB 40 (USD 5.6). Maybe that nudges you toward buying a fragrance. That RMB 4,000 (USD 560) tasting menu? Maybe it softens you up for a new handbag. For many labels, it’s a subtle but strategic upsell.
This linkage between lifestyle and luxury is also visible in the shifting tenant mixes of commercial real estate.
“People used to associate Wynn only with hotels and resorts. In the future, we hope it becomes known as a destination for global cuisine,” Chen Zhiling, president of Wynn Macau, told 36Kr in a recent interview. On April 11, Wynn held the second edition of its wine competition, drawing more than 200 local wineries that presented over 900 Chinese wines. Guests could sample them across Wynn’s restaurants and bars.
Wynn now operates dozens of dining outlets, from Michelin-starred restaurants to upscale bars and casual cafes. On April 28, its Cotai resort, Wynn Resorts, debuted Leela, a new concept that merges formal dining with a gourmet food hall. The venue features Southeast Asian, South Asian, and Japanese cuisines, alongside popular mainland Chinese chains like Tanyu Grilled Fish and Xita Laotaitai. It’s an eclectic, surprisingly down-to-earth mix.
“Today’s consumers are more focused on experience than shopping alone. We need to be ready to welcome guests of all ages and budgets,” Chen said. One of the biggest challenges, she noted, is in staffing, particularly transitioning teams between fine dining and more casual service styles.
The other challenge? Balancing the original brand image while embracing business diversification.
Retail rental income at Wynn Resorts dropped 8% quarter-on-quarter last year, falling to just 74% of 2019 levels. Many of Wynn’s tenants are European luxury brands, and their rents are sometimes tied to sales performance, making this a barometer for the broader decline in luxury consumption. To keep brands from leaving, Wynn may lower rents.
Zoom out, and the decline in luxury spending across Macau is undeniable.
According to Macau’s statistics bureau, tourist arrivals surged 30.1% year-on-year (YoY) in the first three quarters of 2024. Total tourist spending (excluding gambling) rose 8% to MOP 56.21 billion (USD 6.9 billion). Yet per-capita spending dropped 17% to MOP 2,168 (USD 268), with Chinese mainland tourists spending 21.7% less on average.
“The golden age of luxury may never return,” said Li Jiaxiang, a retail property investor. “Forget about 2013 or 2014 levels. We’ll be lucky if we get back to where we were in 2018 or 2019 in the next four or five years.”
This isn’t just a story of consumers trading down. The deeper truth may be that European luxury brands never really cracked the cultural code in China.
A decade ago, GQ ran a video series documenting China’s luxury boom. In one early episode, a French yacht broker stood along the lit-up Bund in Shanghai and said, with a sincerity hard to judge: “We need to teach the Chinese how to enjoy themselves.”
That era coincided with China’s transition from an emerging to a mature luxury market. The country’s newly wealthy elite, shaped by economic liberalization and armed with global aspirations, sought to project taste through high-end goods. “Taste used to signify class. Now it signifies brand,” someone once remarked.
But that era is over. LVMH’s most recent quarterly report showed a 2% drop in revenue and a 5% fall in fashion and leather goods sales, missing expectations. Sales in China remain weak. Japan also showed a YoY decline, an alarming sign that the brands may have finally lost their edge in exploiting regional price gaps.
Curiously, Chinese consumers haven’t stopped spending. They are just spending elsewhere. The runaway success of homegrown brands like Laopu Gold has sent ripples through the industry. After decades of trying to shape—or tame—the Chinese taste for luxury, the West’s grip may finally be slipping.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by He Zhexin for 36Kr.