Old Shop Gold's Rapid Surge Sparks Debate: Is it a New Luxury Powerhouse or a High-End Consumption Bubble?

Amid fluctuations in gold prices, the traditional gold market is undergoing a subtle transformation. Laopuhuang, a brand regarded as the “luxury product of the gold industry” by the market, is standing at the forefront. On one hand, its performance continues to soar, with revenue surpassing 27.3 billion yuan in 2025, quarterly net profit exceeding 70% of last year’s total, and store sales booming, leaving little time for restocking; on the other hand, market divergence is intensifying, with stock prices dropping nearly half from their peak, and investors, consumers, and even second-hand recyclers holding differing views on its future direction.

The rise of Laopuhuang cannot be separated from the dual assistance of favorable timing and geographic advantage. In the second half of last year, with gold prices running high, Laopuhuang successfully stimulated consumers’ psychology of “buying on the rise, not on the fall” through two price increase strategies, driving sales and a queue frenzy. At the same time, backed by high-end shopping centers like SKP and Hang Lung, and leveraging discounts during events like Double 11 and store anniversaries, performance was further boosted. A purchasing agent revealed that even without promotions from Laopuhuang, a 5% discount at the mall could attract a large number of customers.

However, Laopuhuang’s “surge” is not solely reliant on external factors; its internal “restraint” strategy is equally crucial. In terms of store openings, Laopuhuang maintains single-digit growth, adding 10 new stores in 2025, all located in high-end shopping malls, such as IFC, Hang Lung, and SKP. This restraint has led to improved store efficiency, with average annual revenue per store reaching 560 million yuan, and individual malls achieving nearly 1 billion yuan in annual sales. Regarding its customer base, Laopuhuang focuses on high-end users, with black card members spending over 500,000 yuan annually, contributing 70% of sales, and the number of members continues to grow. For this segment of high-net-worth clients, Laopuhuang has also established a high-client management department to provide targeted invitations and one-on-one services, enhancing the experience and encouraging repeat purchases.

In terms of product strategy, Laopuhuang similarly reflects “restraint” and “precision.” Its products are divided into three categories: wearable items under 100,000 yuan, collectible and practical items between 100,000 and 200,000 yuan, and collectible gold pieces over 200,000 yuan. For low-priced accessories, Laopuhuang iterates around classic elements, such as gourds and rose window designs, while increasing weight to raise prices; for high-priced gold pieces, it launches heavier, intricately crafted items, such as incense burners and dragon-phoenix plaques, showcasing intangible cultural heritage craftsmanship and reinforcing their collectible attributes. This strategy maintains brand tone while enhancing average transaction value and revenue.

Despite impressive performance, market divergence regarding Laopuhuang is intensifying. The capital market raises questions about its scarcity: can Laopuhuang truly break free from fluctuations in gold prices and consumer sentiment to become a genuine luxury brand? Some institutions believe that Laopuhuang’s model is difficult to replicate, as its positioning as a collector’s brand, luxury strategies, and timing of going public are unique. However, as Laopuhuang expands its reach, some issues are gradually surfacing. Black card members have reported a decline in membership experience, indicating a need for further classification of membership levels; on social media, an increasing number of consumers are exiting, citing reasons such as excessive price increases, rampant scalping, and unclear member rights. Laopuhuang’s executives also acknowledge the need to strengthen control over purchasing agents and stabilize the pricing system.

Laopuhuang’s founder, Xu Gaoming, has become another focal point of market attention. This low-profile leader serves both as the brand’s top figure and as the director of product development. His entrepreneurial journey spans the cultural tourism and gold sectors, from investing in Yueyang Hongqiao tourism to managing golden treasure Buddhist cultural products, and then to the rise of Laopuhuang, Xu Gaoming seems to have a deep understanding of the aesthetics and consumption psychology of China’s high-net-worth population. He suggests that “those selling gold should reflect on their strategies compared to those selling leather goods,” emphasizing that Laopuhuang’s growth does not rely on rising gold prices. This attitude leads some investors to believe that “investing in Laopuhuang is akin to investing in Xu Gaoming.”

The traditional gold sector is welcoming more players. Brands like Junpei, Linchao, and Baolan are opening offline stores to compete with Laopuhuang for the high-end market. Nanjing Deji Plaza has even gathered the “Four Sisters of Traditional Gold.” However, whether Laopuhuang can maintain its lead in the competition remains to be seen. The challenges it faces are not only to prove its capability to generate profit as a luxury brand but also to demonstrate its business acumen for long-term sustainability. This divergence regarding Laopuhuang may very well be a key proposition for Chinese brands challenging the hegemony of luxury goods.