China’s luxury market “failed to maintain its previous growth trajectory” in 2024 following a “unexpected and sharp deceleration that worsened throughout the year,” according to a recent analysis by Bain & Company. The mainland luxury market declined by 18 to 20 per cent in 2024, returning to 2020 levels, according to the research “2024 China Luxury Goods Market,” which Bain said was caused by “low consumer confidence and increased overseas spending.”
In contrast to leather goods, which saw a growth decline of 20 to 25 per cent due to “limited investment into seasonal items and higher unit prices,” fashion’s seasonality was cited as one of the category’s strong points, with growth declining 15 to 20 percent compared to a 15 to 20 percent increase in 2023.
According to Bain, brands should put an emphasis on increasing desirability and providing value through experiences, events, and new product breakthroughs. Additionally, it stated that China ought to look for international cooperation on pricing, especially when it comes to international wholesale operations.
The study emphasised the opportunities and problems associated with macroeconomic situations and demographic changes, particularly among younger generations, for whom a slowdown in luxury buying has been observed when compared to their forebears. According to Bain, this has been impacted by a decline in spending power that has been driven by rising unemployment rates; conversely, people with greater purchasing power were diversifying their brand preferences.
