Brands ditch 20m buyers for 'Crazy Rich Asians'

About 20 million consumers exited the personal luxury goods market last year.

Luxury brands are leaning harder on Asia’s wealthiest shoppers as the global customer base shrank for a second straight year in 2025, forcing the industry to defend margins with fewer buyers.

About 20 million consumers exited the personal luxury goods market last year, reducing the global active client base to about 330 million, according to a Bain & Co. and Fondazione Altagamma report released in December.

Even so, high-end clients account for as much as 40% of global luxury spending, KPMG said in its Luxury in the Midst of Change report in October.

That concentration of spending is reshaping strategy. Brands are channeling resources toward invitation-only capsules, private salons, bespoke services and curated cultural events aimed at their most valuable customers, particularly in Asia.

“Top-tier Asian clients expect highly personalised clienteling, private and discreet engagement, and cultural or artistic immersion rather than transactional retail,” James Wilson, a partner and head of consumer and retail at KPMG in Singapore, told Retail Asia.

“Increasingly, exclusivity must extend beyond products into experiential, emotional, and heritage-based dimensions,” he said in an emailed reply to questions.

Price increases have underpinned growth. Luxury brands have lifted prices by 54% since 2019, according to KPMG. From 2019 to 2023, about 80% of market expansion came from higher prices, with only 20% driven by volume growth.

As demand softens, 42% of surveyed companies have kept prices unchanged, whilst 39% raised them further to reinforce premium positioning.

The emphasis remains on protecting margins rather than rebuilding scale.

The shift comes with trade-offs. “One of the biggest challenges is balancing democratisation with desirability,” Wilson said.

Gen Z is redefining exclusivity. Younger consumers place more weight on access and community than on scarcity alone.

About 63% of Gen Z consumers in Asia say social commerce shapes their buying decisions, according to KPMG.

“Gen Z tends to favour limited drops, phygital experiences and culturally resonant collaborations that are socially shareable while still preserving clear signals of scarcity,” Sharon Iles, senior apparel analyst at GlobalData Plc, said in an emailed reply to questions.

Brands are testing tiered models that preserve private, high-touch experiences for elite clients whilst offering curated entry points for younger buyers.

LVMH’s Xiamen Beach Boutique, Hermès’ Shanghai pop-up and Chanel’s digital collections blend limited access with social engagement.

Asia remains critical. GlobalData projects the region’s luxury apparel market will grow about 4% annually through 2029, outpacing the 2.8% global rate. With fewer buyers worldwide, brands are betting Asia’s affluent and aspirational consumers can sustain growth.

“The winners will be those that practise balanced exclusivity—protecting highly intimate, high-touch experiences for top-tier clients whilst creating curated, culturally relevant access points for aspirational and next-generation consumers,” Wilson said.