The personal luxury goods market in mainland China contracted by 3–5 percent in 2025, according to the latest findings from Bain & Company’s report. This represents a significant moderation compared to the drastic decline experienced in 2024. While consumer confidence remained cautious throughout most of the year, there were promising signs of recovery in the third quarter, aided by favorable comparisons to the same period in 2024, alongside a strengthening stock market and improved consumer sentiment.
Bain’s report indicates that 2025 was a year of recalibration for China’s luxury market, as consumers became more discerning, prioritizing value-driven luxury items that blend quality, exclusivity, and practicality. The preference for experience-based consumption—such as travel and wellness—persisted, further underscoring a desire for emotional and sensory engagements over purely material possessions.
“After the turbulence of 2024, the market in 2025 began to stabilize, although consumer confidence remained fragile,” stated Bruno Lannes, senior partner at Bain & Company. “What we are seeing is not a broad-based rebound, but the start of a recalibration phase, with early signs of recovery emerging in the second half of the year. This recalibration is also segment-specific, with the Very Important Clients continuing to represent a large share of the market, while younger aspiring consumers have delayed entry into the luxury category.”
Performance across various luxury categories showed significant variation. The beauty segment emerged as the standout performer, exhibiting a rebound of 4–7 percent growth, primarily fueled by consistent demand for ultra-premium skincare and fragrances. Consumers continue seeking emotional and sensory experiences, even amidst economic uncertainty, while other categories experienced continued pressure.
Fashion saw a decline of 5–8 percent, while leather goods fared worse with a drop of 8–11 percent. These downturns can be attributed to previous and ongoing price increases along with a lack of innovation, which made it challenging for consumers to justify new purchases.
“In a more selective market, category dynamics and brand fundamentals are becoming increasingly decisive,” remarked Priscilla Dell’Orto, partner at Bain & Company. “Brands that maintain strong desirability and offer clear value through innovation and targeted pricing strategies are proving to be more resilient.”
Contrary to trends witnessed in 2023 and 2024, luxury spending abroad significantly declined in 2025. Bain estimates that 65 percent of luxury consumption by Chinese consumers now occurs within mainland China, while 35 percent takes place overseas, pointing to a resurgence of domestic consumption.
This shift is partly attributed to favorable currency exchange rates and reduced price discrepancies between mainland China and key luxury markets, which diminished the motivation for overseas shopping. Additionally, the growth of domestic tourism and ongoing shopping mall promotions reinforced spending within the country, even as outbound travel continues to recover.
While daigou activity remains significant in 2025, there are signs of a structural slowdown as brands intensify efforts to curb gray-market sales and protect their pricing strategies in China. Sales among the top 45 brands monitored by Re-Hub saw a modest growth of 3 percent in 2025, a decline from the 5 percent growth observed in 2024, reflecting increased control over supply chains and unofficial distribution channels.
Meanwhile, the second-hand luxury market in China has continued its impressive growth, expanding by 15–20 percent in 2025, although it still accounts for less than 10 percent of the primary luxury market. This surge is fueled by an increase in pre-owned product availability, heightened consumer acceptance especially among younger, more price-sensitive buyers and the widespread adoption of live-streaming as an effective method for product verification and engagement.
“The second-hand market is becoming a more established and complementary pillar of China’s luxury ecosystem,” noted Elle Yang, partner at Bain & Company. “Its continued growth reflects changing consumer mindsets as well as the increasing maturity of the overall market.”
The report also highlights the ongoing rise of local Chinese luxury brands, particularly in beauty and select personal luxury segments. These brands are gaining market traction through culturally resonant designs, digital-first consumer engagement strategies, and competitive pricing backed by robust local supply chains.
As competition intensifies in a low-growth environment, the disparity between successful and struggling brands is widening. Consumers are increasingly consolidating their spending on a smaller selection of preferred brands that offer perceived ‘true value.’
Looking ahead, Bain anticipates that China’s luxury market will witness modest growth in 2026, albeit amidst ongoing volatility and uncertainty. A burgeoning middle class, improved consumer confidence, and favorable policies are expected to facilitate a shift in luxury consumption back to the mainland, while growth will remain highly dependent on specific categories and brands.