Story Highlight
– China’s luxury goods market contracted by 3%–5% in 2025.
– Early recovery signs emerged in late 2025.
– Beauty sector grew 4%–7%, while fashion declined.
– Secondhand luxury market expanded by 15%–20% year-on-year.
– Modest growth expected in 2026 with volatility.
Full Story
China’s market for personal luxury goods experienced a contraction of 3% to 5% in 2025, indicating a noteworthy slowdown from the steep decline observed in 2024, as detailed in Bain & Company’s latest analysis.
Despite persistent consumer caution throughout most of the year, the latter half of 2025 began to show early signs of recovery. This uptick was bolstered by more favorable year-on-year comparisons, a recovering stock market, and gradually improving consumer sentiment.
Bruno Lannes, a senior partner at Bain & Company, stated, “After the turbulence of 2024, the market in 2025 began to stabilise, although consumer confidence remained fragile. 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.”
Bain & Company has characterised 2025 as a pivotal year of adjustment, with consumers in China becoming increasingly discerning, prioritising value-oriented luxury that emphasises quality, exclusivity, and practicality. Spending on experiential services, including travel and wellness, outperformed expenditure on material goods.
The performance of various categories varied considerably. Notably, the beauty segment rebounded, registering growth of 4% to 7%, largely due to demand for high-end skincare and perfumes. In contrast, the fashion sector saw a decline of 5% to 8%, while leather goods fell by 8% to 11%, attributed to consumer fatigue regarding pricing and a lack of innovation in the sector.
Watches faced considerable challenges, with Bain & Company projecting a decline of 14% to 17% in 2025 as consumers adopted a more measured approach to spending, opting instead for alternative investments, secondhand items, and technology-centric devices like smartwatches. Meanwhile, the jewellery market showed some resilience, with its decline narrowing to between 0% and 5%, supported by the allure of value preservation and increasing gold prices.
Priscilla Dell’Orto, a partner at Bain & Company, remarked, “In a more selective market, category dynamics and brand fundamentals are becoming increasingly decisive.”
The report also indicates a dramatic decrease in luxury spending abroad, with around 65% of Chinese luxury consumption occurring within mainland China in 2025. This shift has been influenced by currency fluctuations, reduced price disparities, and robust domestic retail promotions.
Simultaneously, China’s secondhand luxury market demonstrated significant growth, expanding by 15% to 20% annually, although it still represents less than 10% of the primary luxury market.
Elle Yang, another partner at Bain & Company, commented, “The secondhand market is becoming a more established and complementary pillar of China’s luxury ecosystem.”
Looking forward, Bain & Company anticipates a return to modest growth for the personal luxury market in China by 2026. However, it underscores that future performance will remain highly variable, influenced by specific categories and brands as market volatility continues.
