Luxury Goods in China

Luxury goods in 2025: The big picture

In 2025, retail value sales of luxury goods in China saw a solid increase in current value terms, despite consumer sentiment being cautious owing to ongoing macroeconomic uncertainties, including slower GDP growth and sustained pressure on household incomes. Demand for luxury goods remained robust, driven by consumers' continued interest in meaningful experiences and their increasing perception of luxury goods as an investment. However, this was partially offset by some consumers reducing their discretionary spending in response to broader economic concerns and an uneven labour market.

2025 key trends

In 2025, luxury goods in China was significantly influenced by the trends of sustainability and personalisation, as well as the increasing integration of artificial intelligence in customer engagement and product development. Companies responded to growing consumer demand for environmentally responsible products by prioritising eco-friendly sourcing and transparent supply chains. Personalisation emerged as a critical differentiator, particularly in personal luxury, where bespoke options and AI-driven customisation experiences substantially enhanced customer loyalty and satisfaction. Furthermore, AI technologies were leveraged to analyse consumer preferences and optimise inventory management, resulting in more efficient luxury retail operations in China.

Competitive landscape

In 2024, luxury goods in China continued to be dominated by established international players, with companies in premium and luxury cars holding the top five positions due to the strength of this category within luxury goods. Daimler, Tesla, Volkswagen, Bayerische Motoren Werke, and Toyota Motor Corp together accounted for more than half of value sales in 2024. The emphasis on electric vehicles (EVs) was instrumental in maintaining consumer interest and driving value growth. Nevertheless, various Chinese companies saw rising shares of sales, such as Kweichow Moutai in fine wines/champagne and luxury spirits, as its luxury Moutai is often purchased as a gift. Meanwhile, in premium and luxury cars, although rising from a low base, domestic brands such as BYD and Hongqi are making their presence felt in the luxury segment with EVs. In addition, although Geely Automobile Holdings saw a slight value decline in 2024, this was after unprecedented growth in 2023, and it did well to maintain most of the growth seen the previous year. Its success was driven by innovative technological advancements, such as the world's first AI-powered car designed for precise drifting on snow and ice. This technological breakthrough underscored Geely's growing influence and the increasing competition from domestic companies and state-owned enterprises.

Retail developments

In 2025, sales of luxury goods in China continued to be characterised by a robust blend of physical stores and retail e-commerce, reflecting the evolving preferences of affluent consumers. Despite the significant growth of digital platforms, physical stores, particularly luxury department stores and high-end shopping districts in major cities such as Shanghai, Beijing, and Shenzhen, remained prominent. These locations drew luxury shoppers by offering immersive in-store experiences, including personalised concierge services, private shopping appointments, and exclusive styling consultations, which catered to the tactile engagement desired for high-end purchases of luxury leather goods, designer apparel and footwear, luxury jewellery, and luxury timepieces. The value share of physical stores in personal luxury stood at 87% in 2025, indicating there has been only a gradual shift online.

What next for luxury goods?

Luxury goods in China is anticipated to experience steady growth through to 2030, with a projected compound annual growth rate (CAGR) of 4% in current value terms (2% at constant 2025 prices). All categories are anticipated to see current value growth, although luxury jewellery and super premium beauty and personal care are expected to see particularly strong increases. Although premium and luxury cars will maintain its dominance, its lead will be eroded by the better performance of personal luxury.