What's Happening?
According to Bain & Company's latest industry report, the global luxury market remained stable in 2025, despite economic uncertainties and a contraction in China's market. The report, in collaboration with Altagamma, highlights a shift towards 'experiential indulgence' over 'conspicuous consumption,' driven by Gen Z's preferences. While personal luxury items still account for a significant portion of spending, luxury hospitality and gourmet dining have seen notable growth. The Chinese market, once expected to dominate global luxury spending, has contracted by 3-5%, but local brands are gaining traction. Meanwhile, Southeast Asia, India, and the Middle East are emerging as strong contributors to the luxury market.
Why It's Important?
The report underscores a significant
transition in consumer behavior within the luxury sector, with experiences and emotions becoming key growth drivers. This shift reflects broader changes in consumer values, particularly among younger generations. The steady performance of the global luxury market, despite challenges in China, indicates resilience and adaptability. The rise of local brands in China and growth in other regions suggest a more diversified and competitive landscape, which could influence global luxury strategies and investments.
What's Next?
Bain & Company predicts a steady recovery in China's luxury market, potentially boosting global figures by up to 5% next year. The consultancy is optimistic about long-term growth, projecting luxury spending to reach €2.7 trillion by 2035. The industry faces a pivotal moment to balance profit with purpose, emphasizing ethics, inclusivity, and authenticity. Companies that successfully navigate these changes could redefine luxury and capture new consumer segments.
