THE luxury goods market is in a deep funk. Euro at four-year low! Greek debt crisis! Bailout! Consumers from Reykjavik to Moscow are getting the heebie-jeebies just looking at the headlines. No one is the mood to spend like it is 2008.

In the three “mature” consumer markets — the US, Japan and Europe — few customers are walking out of stores with RM15,000 bags or crystal-studded cashmere tops.

What is a purveyor of luxury goods to do in such circumstances? Business clearly could not go on as usual and required some radical tweaking, such as finding a thirsty new market.

That was why on a balmy May weekend, Christian Dior came to Shanghai with its head designer, John Galliano, in tow to launch its Cruise 2011 collection.

A massive tent was erected along the city’s famous Bund and 500 guests ooh-ed and ah-ed over a collection inspired by the French New Wave cinema movement.

In the streets, abuzz with Shanghai Expo, you can almost taste a kind of giddy consumerism in the air. On the Saturday morning of the Dior show, UniQlo, the Japanese retailer of casual clothing, opened its flagship store in Nanjing West Road.

The queue stretched five-deep all the way to the road — and this was just to pay. All over the city, shops were packed with young and old buying sneakers, toys, watches, Expo souvenirs, cameras and more.

How could anyone ignore such a need to shop? Galliano had said he wanted to give the Chinese a taste of contemporary Parisian savoir faire and chic and he presented a decidedly youthful collection.

The 17-year-old American model, Karlie Kloss, styled in a bouffant Brigitte Bardot hairdo, opened the show in a rose pink tulip-shaped leather dress. In the background, a mini orchestra accompanied the 1960s soundtrack.

Capris, shorts, blazers and trenches in gingham and marine stripes evoked images of Jean Seberg, Jeanne Moreau and Romy Schneider up to mischief in the streets and salons of Paris. Cocktail dresses accented with frills and bows were designed for girls with slender waists.

Other Parisian references included the iconic “Bar” jacket — updated with fringed details and Prince of Wales check — topped by a moped helmet. Girls wearing such an ensemble should be skipping jauntily along the Left Bank, a Dior sac in one hand and an even cuter boy dangling from the other arm.

For the finale, a series of silk, lace and organza gowns in a palette of peach, lilac, mint, sherbet and pastel blue floated down the runway.

Earlier, Dior premiered a 10-minute short, Lady Blue Shanghai, directed by David Lynch. It featured Marion Cotillard, in a grey Dior suit and sky-high heels, running in the alleyways of Shanghai looking for a mysterious blue handbag.

Cotillard, in a pale yellow chiffon dress, sat on the front row with Dior “face” Charlize Theron, LVMH chairman Bernard Arnault, footballer Hidetoshi Nakata, actress Maggie Cheung, R&B singer Kelis as did Chinese celebrities such as Li Bingbing and Tang Wei.

For a week, the Dior logo dominated Shanghai. Its ads plastered buildings and on the Bund, a convoy of limousines ferried Dior “types” to and from the Hyatt hotels to the show venue and store.

On the Friday evening, Dior reopened its revamped boutique, designed by architect Peter Marino, in the luxury shopping mall Plaza 66.

All the Dior touches — a ceiling featuring the lily of the valley, which is associated with Dior, Louis-style gilded furniture and a curved staircase with wrought-iron balustrade — were designed to give shoppers a sense that they had entered a boudoir, albeit one stocked with fine jewellery, watches and a delicious selection of leather goods.

At the mall, a giant Lady Dior handbag was mounted at the entrance to remind the Shanghainese that Dior had taken the trouble to design a handbag just for them.

Inside, a retrospective exhibition showcasing some of the house’s greatest designs from the 1950s New Look to red-carpet ball gowns was a celebration of its couture history. How will the collection go down with Dior’s Chinese clients?

Shanghai girls — lanky and blessed with strawberries and cream complexion — can certainly carry off the pastels, frills and bows. But the tai tai and women of a certain age need to be more judicious, perhaps a jacket here or a blouse there with a muted skirt might work better.

As for Dior, whether the collection sells or not mattered little. More important was that the blue Lady Dior Shanghai purses and bags were flying out the store.