Model child: A young girl has her hair done ahead of a fashion show. There is a growing demand for high-end children's fashion. Photo provided to Shanghai Star

Luxury brands are looking to cash in on China's "little emperors and empresses", Matt Hodges and Yu Ran discover.

Christmas has come early to the Ralph Lauren kids' clothing store at Plaza 66 on Nanjing West Road. By mid-November, it is already decked out in white, red and green as it prepares to cash in on two emerging trends: gift-giving at Yuletide and increased spending on kids' luxury fashionwear.

Inside, Chen Fang, a housewife from Hubei province in her early 30s, is sifting through embroidered velvet and flutter-sleeve dresses for her four-year-old while her husband guards some shopping bags from Chanel.

"We fly to Shanghai to shop because we can't get these brands where we live," says Chen.

"I don't have a specific budget for my daughter, but I spend as much on her as I do on myself," she adds "I buy new clothes and shoes each season, mostly from luxury branded stores, to keep her looking different from the other kids."

Baby Dior set down tent poles in Shanghai in 2010 – four years after Zara opened its first kids' clothing store in the city — and a slew of top-end foreign brands have followed suit in the last year alone. At Dior's outlet in Plaza 66, two shrunken but fancy-looking chairs in the changing room add to its Alice-in-Wonderland, doll-house vibe.