Luxury Goods in Malaysia

Luxury goods in 2025: The big picture

Luxury goods in Malaysia rebounded to solid retail current value growth in 2025, driven by rising domestic consumer confidence and robust tourism growth. The positive performance reflected the favourable impact of an increasing number of high-net-worth individuals and stable macroeconomic conditions, including low inflation and steady GDP growth. The industry benefited from increased discretionary spending, particularly after the high-value goods tax (HVGT), slated to take effect in May, was abolished. This tax had been expected to dampen sales in categories such as luxury timepieces, luxury jewellery, and premium and luxury cars. The supportive environment contributed to heightened demand across all luxury goods categories, enhancing overall performance and value sales. Initiatives like the Malaysia Super Sale Campaign 2025 also attracted global shoppers, boosting the appeal of luxury retail experiences in cities such as Kuala Lumpur, Johor Bahru, and Melaka. However, challenges persisted. The government did not abandon luxury-related taxation, but instead changed its strategy. The introduction of a 5-10% sales and service tax (SST) on luxury goods, effective 1 July 2025, increased prices for high-end fashion items, although this primarily affects local consumers, as tourists remain exempt from this tax, continuing to encourage inbound luxury shopping.

2025 key trends

In 2025, luxury goods in Malaysia continued to evolve, driven by key trends such as sustainability, personalisation, and the integration of artificial intelligence (AI) technologies. The emphasis on sustainability had a profound impact on product development and marketing strategies across various luxury categories, including personal luxury and experiential luxury, as consumers increasingly sought eco-friendly and ethically sourced products and services. Personalisation remained a significant driver of consumer engagement, with luxury brands enhancing customisation options to cater to individual tastes and preferences. The growing incorporation of AI further transformed the retail experience, enabling more sophisticated virtual try-ons, personalised recommendations, and seamless e-commerce interactions, which particularly appealed to tech-savvy buyers.

Competitive landscape

In 2024, luxury goods in Malaysia continued to be led by players in premium and luxury cars in value terms. This was attributed to high sales and significant concentration within this category. In terms of brand performance, BMW and Mercedes-Benz maintained their leading positions in premium and luxury cars, as well as overall luxury goods. Their success was driven by the introduction of innovative technologies and the expansion of their electric vehicle lineups, which aligned with the growing trend towards sustainable luxury among affluent consumers. Porsche, ranked third, also maintained its position, albeit at a distance, due to its adoption of electric and hybrid models. In 2025, Porsche implemented a mid-cycle refresh of the Taycan lineup, underscoring its commitment to innovation, which is expected to sustain its strong position.

Retail developments

In 2025, offline retail continued to lead the distribution of personal luxury goods in Malaysia, owing to its capacity to deliver immersive and personalised shopping experiences that resonated with affluent consumers. Physical retail channels such as standalone specialist stores and department stores held a substantial value share in 2025, even increasing slightly from 2024. The ongoing expansion of luxury retail space within established high-end shopping districts and newer developments reinforced this trend, allowing luxury brands to showcase their products in prestigious locations. By incorporating exclusive in-store features such as personalised customer service, private shopping lounges, and bespoke product customisation, these stores effectively catered to the preferences of wealthy shoppers seeking experiential and tailored engagements. Major retailers focused on key urban hubs, including Kuala Lumpur's city centre and upscale suburban areas, to ensure accessibility and visibility for Malaysia's luxury market clientele.

What next for luxury goods?

Value sales of luxury goods in Malaysia are expected to experience steady growth between 2025 and 2030, driven primarily by the expanding population of affluent consumers and shifting consumer preferences. According to forecasts by Euromonitor, the number of affluent adults, HNWIs, and ultra-HNWIs in Malaysia is projected to rise, thereby bolstering demand for luxury categories including luxury hotels, designer apparel and footwear, and premium beauty and personal care. Growth is anticipated to be underpinned by economic improvements and increasing wealth generation, which will continue to broaden the luxury consumer base, including a significant proportion of aspirational consumers eager to enter the luxury market. As a result, this demographic shift is likely to fuel sustained growth in value sales, as more consumers seek high-quality, exclusive products and experiences. However, the introduction of a luxury tax in 2025 is a factor that could dampen sales momentum among local consumers.