Global luxury market remains steady despite China slowdown, says Bain & Company
The global luxury sector has remained steady in 2025 according to the latest industry report from Bain & Company, despite economic uncertainties and a contraction in the key market of China.
The ‘Luxury Market Report’ for 2025, released by Bain & Company in partnership with Italian luxury brand association Altagamma, notes that worldwide spending remains steady from last year, at €1.44 trillion, but was down by as much as 5 percent in China.
The global luxury market is also undergoing a transition towards “experiential indulgence” over previous trends of “conspicuous consumption”, such as to high-end hospitality, cruises, fine dining, and wellness, in part driven by the values and desires of Gen Z consumers.
“After the shopping-spree era, experiences and emotions have become the true engine of luxury growth,” said Bain & Company’s Milan-based global fashion & luxury practice leader Claudia D’Arpizio. “Ahead lies a phase of quality-driven growth, while expansion will favour fewer, higher-impact locations and a shift towards a more discerning, experience-led model.”
While luxury personal items still account for around a quarter of the total spending at roughly €360 billion at constant rates, luxury hospitality (~€250 billion) and gourmet food and fine dining were up by respectively 5 percent and 7 percent, the latter having grown by 40 percent since 2019 to almost €75 billion, while top end cruises jumped last year by more than 10 percent.
As to personal luxury goods, jewellery was the stand out category for growth over the past year, up by as much as 6 percent on the back of a surge in customisable designs and emotional appeal, while fragrances, especially masculine scents, remain popular and eye-wear also saw its growth of up to 4 percent boosted by design innovation, versatility, and digital integration.
The key Chinese market – once projected pre-Covid to account for almost half of the world’s spending on luxury goods by this year, but down by between 3 percent and 5 percent – is also undergoing a structural shift, marked by an increasingly competitive landscape as local brands step into the ‘entry-to-luxury’ playing field with a better understanding of local tastes.
Elsewhere in Asia, Japan’s luxury market is also decelerating as a consequence of slowing tourism, although was steadied by local demand and a taste for limited editions. The country, together with the slowdown in China with its key middle-class markets in ‘wait-and-see’ mode, was offset by growing demand among the younger generations in some parts of Southeast Asia.
Indeed, Southeast Asia, together with India, Africa, and the strongest-performing region of the Middle East, now contribute around €45 billion combined to the luxury goods market, matching that of mainland China. Yet, the latter will be critical to global market performance next year, with Bain predicting a steady local recovery will see the global figures rise again by up to 5 percent.
The consultancy is even more optimistic for the longer-term, with ongoing gains pushing overall luxury spending out to as much as €2.7 trillion by 2035, including up to €625 billion on personal items. Bain believes the projection is realistic due to the industry’s demonstrated resilience, as well as the 300 million-plus new consumers expected to enter the market over the next five years.
“Luxury stands at a crossroads,” D’Arpizio concludes. “This is the industry’s moment of truth: to rise through ethics, inclusivity, and authenticity, or retreat into elitism. The new formula is clear: entertainment, emotion, and ethics are the real sources of value. The winners will balance profit with purpose, creativity and conscience, turning recalibration into reinvention.”
