What's Happening?
China's luxury goods market is projected to return to growth in 2026, according to Bain & Company. The market, which had contracted by 3 to 5 percent in 2025, is expected to stabilize due to a stronger stock market and improved consumer confidence. The report
highlights that brands focusing on affordable luxury and ultra-premium segments are performing well, as they offer perceived 'true value' to consumers. The luxury market's recovery is anticipated to be uneven, with beauty products showing growth, while fashion and leather goods face declines. The rise of local Chinese brands is also noted as a significant trend, capturing consumer interest with innovative and culturally relevant offerings.
Why It's Important?
The anticipated rebound in China's luxury market is significant for global luxury brands, as China accounts for a substantial portion of luxury spending. The shift towards domestic spending, driven by a weaker currency and narrowing global price gaps, suggests a changing landscape for international luxury brands. This could impact U.S. luxury companies that rely on Chinese consumers for a significant portion of their sales. The focus on affordable luxury and the rise of local brands may also influence global market strategies, as companies adapt to changing consumer preferences and economic conditions in China.
