China’s luxury market stabilises after sharp 2024 drop

Kearney reported China luxury market down 3–5% in 2025 with early recovery emerging.

China’s personal luxury goods market is showing signs of a cautious recovery, but growth remains uneven and slower than historical trends, according to Kearney’s “China luxury market: the ridge path toward a cautious recovery” insight published in late January 2026.

The mainland market has moved past the steep contractions seen in 2024, when luxury demand declined sharply, and into a phase of modest improvement.

Broader industry data shows that China’s luxury market shrank by an estimated 3% to 5% in 2025, marking a smaller decline than the 17% to 19% drop recorded in 2024, signaling early stabilisation.

Recovery patterns vary by category and channel with segments such as beauty and everyday luxury have shown resilience, whilst higher‑ticket categories including watches and leather goods remain under pressure as discretionary spend is reprioritised.

The second‑hand luxury market has also expanded, reflecting consumer interest in value and affordability.

The shift in Chinese luxury consumption reflects strong domestic demand for value‑led purchases, the repatriation of spending from overseas, and growing market share for affordable and ultra‑premium brands, according to industry analysis.

This trend has coincided with broader shifts in spending habits as consumers rebalance between domestic and international purchases.

Kearney’s proprietary research draws on surveys of Chinese aspirational luxury shoppers and market data to chart this transition.

Kearney’s analysis underscores that China’s luxury recovery is not uniform and relies on how brands adapt to changing spending patterns, pricing expectations, and a competitive domestic landscape.