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Executive summary
- Key issues in this Report
- Definitions
- What you need to know
- Market factors
- Market opportunities
- Trend outlook
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The market
- China’s economy is steady, but internal growth momentum needs reinforcing
- Consumer confidence relatively high, but has declined somewhat
- Graph 1: confidence index* for improved financial situation in the next three months, 2020-25
- Graph 2: confidence in an improving financial situation in the next three months, 2020-25
- The mainland Chinese luxury market is cooling, revenue performance among major luxury groups is diverging
- In 2025, overall consumer sentiment for luxury goods remains cautious
- Graph 3: attitude towards luxury consumption – “desire a lot”, 2024-25
- The focus of luxury consumption may shift to experiential consumption
- Graph 4: luxury goods/services purchases in the past 12 months and purchase plans for the next 12 months, 2025
- Jewellery with value retention and emotional value still has potential
- Brands need to strengthen ties with local culture and create an experience money can’t buy
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The consumer
- The evolution of luxury consumption: from being seen to focusing on personal enjoyment
- New definitions of luxury: personal satisfaction over conspicuous consumption
- Graph 5: definitions of luxury, 2025
- The understanding of luxury depends on the age bracket
- Graph 6: definition of luxury, by age, 2025
- Craftsmanship, pleasure and comfort still resonate; possibilities for diverse development
- Graph 7: definition of luxury goods, 2016-25
- Tier 1 cities emphasise product quality and emotional experience, Tier 2 cities take a sober and pragmatic approach, Tier 3 cities hold relatively traditional luxury values
- Graph 8: definition of luxury goods, by city tier, 2025
- Different city tiers have different interpretations of craftsmanship in luxury goods
- Luxury consumption is moving from an occasional or special reward into an everyday experience of heightened happiness
- Graph 9: definition of luxury goods, by budget for luxury spending in the next 12 months, 2025
- Consumers are rewarding themselves and want sustained happiness
- Brands focus on providing emotional value for everyday occasions
- The evolution of luxury consumption: moving away from a one-size-fits-all approach
- Luxury consumption is entering a diversified and inclusive era
- Graph 10: new ways of consuming luxury goods, by positive/negative attitudes, 2025
- Graph 11: new ways of consuming luxury goods, 2025
- Consumers want to shift from owning brand products to owning their own story
- Graph 12: new ways of consuming luxury goods – luxury item customisation/DIY, by living situation, 2025
- Luxury goods are no longer the one and only option
- Footwear brand Golden Goose offers customisation services
- Nearly half of respondents have purchased pre-owned luxury goods; women and high-income individuals are dissatisfied but are still the most interested in them
- Graph 13: new ways of consuming luxury goods – buying pre-owned luxury items, by gender, age and monthly household income, 2025
- Watches are pre-owned luxury goods most likely to experience growth
- Graph 14: categories planned to purchase in the next 12 months, by interest in purchasing pre-owned luxury goods, 2025
- Richard Mille opens first pre-owned boutique in Hong Kong
- Tier 1 city consumers more likely to accept new forms of consumption
- Graph 15: new ways of consuming luxury goods – “haven’t tried, but interested in trying”, by city tier, 2025
- A new standard in luxury: uniqueness and everyday pleasure
- Uniqueness and everyday happiness have become key values in luxury consumption
- Graph 16: reasons for the loss of luxury consumers, 2025
- Independent designers, affordable luxury and premium outdoor sports brands may capture the spending lost by luxury brands
- Independent designers, affordable luxury, and premium outdoor sports brands may capture the spending lost by luxury brands
- Premium outdoor brands provide tangible value and focus on creating cultural appeal to become luxury alternatives
- After breaking up with luxury brands, respondents from different city tiers go different ways
- Graph 17: alternative options after luxury brand attrition – by city tier, 2025
- Luxury brands should pay attention to exclusive member services and emotional value
- Louis Vuitton provides emotional boost to consumers on its packaging
- The winning strategy: from artisanal perfection to emotional perfection
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Issues and insights
- Decoding ‘down-to-earth’ marketing of luxury goods
- The vast majority of respondents have mixed feelings about ‘down-to-earth’ marketing approaches
- Graph 18: views on luxury brands attempting ‘down-to-earth’ marketing methods, 2025
- Strong prospective consumers can accept ‘down-to-earth’ marketing, but still expect quality and a sense of boundaries
- Graph 19: views on luxury brands trying ‘down-to-earth’ marketing – by luxury goods consumption budget in the coming year, 2025
- Consumers expect higher standards of craftsmanship from luxury goods
- Budget-reducing consumers and lower-tier city consumers may be more interested in traditional luxury narratives
- Luxury brands and maintaining distance: expand influence while still cultivating a sense of belonging
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Appendix – methodology, abbreviations, confidence index calculation and personal information of respondents from qualitative interviews
- Methodology
- Abbreviations
- “Confidence index” calculation
- Appendix of personal information of respondents in the qualitative interviews related to the report
Modes of luxury consumption are diversifying as the concept of luxury shifts in consumers' minds. Brands need to pay special attention to providing consumers with emotional value on a regular basis.
Blair Zhang, Senior Analyst, China Insights
Market Definitions
Luxury goods refer to products with high prices provided by recognised luxury brands, including fashion items and leather goods (eg bags, clothing, footwear, hats and belts), perfumes, fragrances, cosmetics, jewellery, watches and premium furniture and household items, excluding luxury cars.
Luxury services include fine dining (such as Michelin restaurants), premium travel (such as five-star hotel stays and first-class flights) and customisation services.
Luxury brands include Hermès, Louis Vuitton, Chanel, Prada, Gucci, Christian Dior, Cartier, Piaget and Bvlgari.
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