Chinese luxury market: is the industry at a turning point?

By: Trademagazin Date: 2025. 02. 19. 11:17

Luxury giants LVMH and Kering are seeing significant declines in Asia, especially in the Chinese market. The country’s economic slowdown and high prices for luxury goods are increasingly deterring buyers, which could put an end to the sector’s previous boom, writes VG.

Luxury market shrinking

Consulting firm Bain estimates that the Chinese luxury market will shrink by 20% in 2024 compared to the previous year. The world’s leading luxury brands also reported significant sales declines:

Louis Vuitton: 11% decline in the Asian market (excluding Japan).
Gucci (Kering): 24% decline in China.

According to Bain partner Hsing Wei-wei, the era of hyper-exponential growth is over and the market will develop at a much more moderate pace in the future. The main question is whether the current decline is cyclical or a sign of a long-term trend change.

Why is luxury so expensive in China?

While Chinese buyers still make up a significant portion of the global luxury market, many are choosing to shop abroad, such as in Japan, where luxury goods are cheaper. Tiffany CEO Anthony Ledru said that luxury goods are priced higher in China than in the United States, Japan or Korea, which could also be contributing to the decline in demand.

Luxury industry response and vision

Big luxury companies such as LVMH and Kering remain confident in the Chinese market and see the downturn as temporary. Bernard Arnault (LVMH) and Francois-Henri Pinault (Kering) both believe that demand can recover over time, as China is still one of their largest consumers.