China is more connected to the world than in the past and is also feeling the global chill, with double-digit economic growth falling to 9 percent in the third quarter. A growing number of factory closures and increasing unemployment are further curbing growth.

The super-wealthy, the main consumers of luxury goods in China, have seen their fortunes shrink due to losses in stocks and other investments. "They won't splurge like before," Sun says.

According to the US publication Forbes, the number of billionaires in China this year was just 24 compared with 66 in 2007. "The combined net worth of the 400 richest (people in China) dropped to $173 billion from $288 billion," said the magazine in late October.

Young office workers are another growing but vulnerable group of luxury goods buyers in China. Sun calls them "margin consumers," who might scrimp for months to buy an LV handbag but immediately stop buying when times are tight.

Rising living costs, lower incomes and even the risk of job losses will cut their consumption, Sun says.

Daisy, 29, from Chengdu, capital of Sichuan province, is having to curb her enthusiasm for Chanel, as her foreign-funded company cut her salary by 25 percent in October.

"I know the company's R&D progress, marketing and sales have all been affected by the financial crisis but to cut salaries is really annoying," she says. "I can no longer buy whatever I like, since I have to consider the mortgage, meals, transport and phone bills first."

Daisy is thinking of reselling some of her 10 luxury handbags to cover her visits to beauty parlors, hairdressers and trips home, as the company gives extended leave to her and others due to sagging business.

She isn't even sure her job will be there after the involuntary vacation.

Likewise, prospects are unclear for Zhang Yu and his "Milan Stop."

"Although more have come to sell us their luxury collections, not as many are willing to buy," says Chen Jiapin, a "Milan Stop" sales assistant.

"Two sales assistants from a Hermes store near the West Lake developed a craving for luxury after serving well-heeled customers," Chen says. "They looked at the bags but didn't buy. They said their own store's sales were down drastically, so they had to be more careful."

Chen says most visitors these days were also window-shoppers.

Some analysts have suggested a cut in consumption taxes on luxury products as a way to spur sales. The Ministry of Commerce has previously forecast China will become the leader in luxury spending by 2014, comprising an estimated 23 percent of the world market. It is now the third-biggest luxury goods consumer after Japan and the US, with a market value of $8 billion last year.

"It's hard to say what 2009 will be like," says Huang Bingjun, who sells imported luxury products online. So far, his business hasn't been hit - in fact, it has actually seen orders jump more than 20 percent since October, as the rising yuan made European luxury brands cheaper.

Huang started xiaobuyer.com two years ago and things are still good enough for him to be planning a two-week trip to Europe during the post-Christmas sales season. "I will look for classic items and base my purchases on customer orders," he said. "Small businessmen like me have no experience of financial turmoil and we must remain cautious."