The report concludes that 2025 marked a year of recalibration for China's luxury market, as consumers became more selective and prioritized value-driven luxury items that balanced quality, exclusivity and practicality. Experience-based consumption, including travel and wellness, remained favored, reflecting a continued preference for emotional and sensory experiences over material goods.
“After the turbulence of 2024, the market began to stabilize in 2025, although consumer confidence remained fragile,” he said. Bruno Lannes, Senior Partner at Bain & Company. “What we are seeing is not a general rebound, but the beginning of a recalibration phase, with the first signs of recovery emerging in the second half of the year. This recalibration is also segment-specific, as Very Important Customers continue to represent a large part of the market, while younger consumers have delayed entry into the luxury category.”
Luxury market performance varied significantly by category. Beauty emerged as the top performer, rebounding to 4 to 7 percent growth, driven by continued demand for ultra-premium fragrances and skincare as consumers continued to seek emotional and sensory experiences even amid economic uncertainty. Other categories remained under pressure.
Fashion declined 5 to 8 percent, outpacing leather goods, which fell 8 to 11 percent, reflecting past and current price increases and limited innovation, which made it difficult for consumers to justify their purchases.
“In a more selective market, category dynamics and brand fundamentals are increasingly decisive,” he said. Priscilla Dell'Orto, partner at Bain & Company. “Brands that maintain broad appeal and offer clear value through innovation and targeted pricing strategies are proving more resilient.”
Unlike 2023 and 2024, the share of overseas luxury spending declined sharply in 2025. Bain estimates that 65 percent of Chinese luxury consumption occurred within mainland China, while 35 percent took place outside, reflecting a renewed degree of consumption repatriation.
This shift was driven in part by low currency and narrowing price gaps between mainland China and major luxury markets, largely resulting from exchange rate movements, which reduced the incentive for overseas purchases. Growth in domestic tourism and ongoing mall promotions further supported continental consumption, despite the continued recovery in overseas travel.
Daigou activity remained high in 2025, but showed signs of structural slowdown as brands stepped up efforts to curb gray market sales and protect prices in China. Sales among the top 45 brands tracked by Re-Hub grew 3 percent in 2025, up from 5 percent in 2024, reflecting tighter control over overseas supply chains and unofficial channels.
At the same time, China's secondhand luxury market continued to expand, growing by 15 to 20 percent in 2025, while remaining underpenetrated at less than 10 percent of the primary luxury market. The growth was supported by a greater supply of used goods, greater consumer acceptance (particularly among younger and more price-sensitive buyers), and the widespread adoption of live streaming as a trusted channel for product verification and engagement.
“The second-hand market is becoming a more established and complementary pillar of China's luxury ecosystem,” he said. Elle Yang, Partner at Bain & Company. “Its continued growth reflects changing consumer mindsets as well as the growing maturity of the overall market.”
The report also notes the continued growth of Chinese local luxury brands, especially in the beauty and select personal luxury segments. These players are gaining market share through culturally resonant designs, digital- and engagement-driven consumer strategies, and competitive pricing supported by strong local supply chains.
As competition intensifies in a low-growth environment, the gap between winners and laggards widens, and consumers consolidate their spending on a smaller number of preferred brands that offer perceived “true value.”
Looking ahead, Bain expects China's luxury personal goods market to see modest growth in 2026, albeit with continued volatility and uncertainty. A growing middle class, improving consumer confidence and favorable policies are expected to help drive greater luxury consumption back to the continent, while growth will continue to rely heavily on categories and brands.
Fiber2Fashion (RR) News Desk
