Chinese Luxury Buyers Pivot to Experiences, Value and Homegrown Brands

A new reality for Chinese luxury shoppers

In a quiet corner of a Paris boutique run by a Swiss watchmaker, a Chinese customer stood on the phone with her bank, trying to push through a card payment for a 25,000 euro watch. The transaction finally cleared after several attempts. Staff said scenes like this were rare a few years ago when Chinese luxury buying felt effortless and exuberant. Today, they notice Chinese clients visiting to browse, then choosing more accessible brands nearby or opting for more modest models instead of showpiece items. Salespeople also report that buyers from the United States and the Middle East often outspend Chinese tourists in their stores.

What plays out at the till lines up with a much larger story. Chinese shoppers once powered growth across European luxury, from watches and jewelry to leather goods. Now the market is adjusting to a new phase marked by slower growth, price fatigue, and sharper value judgments by consumers. Households are navigating a shakier economy and a weaker property backdrop, and more buyers are prioritizing trips, culture, and wellness over another status bag. Brands that had scaled rapidly are learning to do more with fewer stores, stronger clienteling, and experience led touchpoints that create desire without relying only on logos.

Why spending cooled, and what 2025 looks like

After a strong rebound in early 2023, luxury demand on the Chinese mainland fell back in 2024. Consultancies tracking the market estimate an 18 to 20 percent drop in domestic luxury sales, pulling spending roughly back to 2020 levels. The slide reflects low consumer confidence, frequent price increases, and a revival of overseas shopping as travel restarted and currency shifts widened price gaps with China. The base case for 2025 is a flat year, with a softer first half and a better second half if stimulus and sentiment improve.

2024 slump by the numbers

All major categories felt the pressure. Beauty held up best because it offers emotional rewards at lower ticket sizes, while jewelry and watches were the hardest hit as buyers redirected cash to experiences or other stores of value. Hainan’s duty free market shrank by about 29 percent in 2024 amid weaker traffic, lower basket values, and competition from global tourism and domestic ecommerce. Chinese tourist spending outside the mainland picked up again. In 2024, overseas purchases accounted for roughly 40 percent of total Chinese luxury spending, with Europe back to about half of 2019 levels and Asia Pacific exceeding 2019 in some places, especially Japan where exchange rates were favorable.

What flat growth in 2025 means

A flat year does not imply inactivity. Most brands are focusing on performance, not expansion. Efforts include price harmonization across markets, tighter control of wholesale to curb discounting, closer customer relationship management, and stronger aftersales. The aim is to rebuild desirability while protecting margins. Industry figures say the challenge is to live with smaller growth and still deliver innovation and client service. Pascal Morand, executive president of the Federation de la Haute Couture et de la Mode, has framed it as a test of discipline rather than a crisis in demand.

Introducing his view, Morand pointed to the need to manage a slowdown without losing perspective on mid single digit economic growth.

“A main challenge is to manage the macroeconomic and revenue effects of the smaller growth rate, although the current stabilisation at around five per cent remains appreciable compared to many other parts of the world.”

Experiences outshine logos for the wealthy traveler

China’s wealthy are pivoting away from trophy goods toward travel and culture rich experiences. The latest surveys of high net worth individuals show a clear preference for longer and more frequent overseas trips, often to destinations like Dubai and Japan. These travelers seek history, architecture, and art, with itineraries that favor meaning over shopping sprees. Spending is shifting to restaurants, local activities, and wellness retreats. Even for those who still buy, purchases are more selective and often reserved for items that feel special or useful.

Consumer sentiment helps explain the move. A leading index tracking high income households fell to 69 in May 2025 from 81 in late 2022. Confidence that the near term economy would improve did not fully return after the pandemic, so families save more and think harder before making big discretionary purchases. Travel demand remains resilient, just more careful. Domestic trips are strong, and international travel is rebuilding with a tilt to closer destinations that are easier to reach and cheaper to shop, thanks to currency moves. Younger travelers, especially in top cities, show a clear preference for experiences that feel personal and grounded in local culture.

Inside the new experiential luxury

Luxury houses are responding with retail that feels like a destination. In Shanghai, Louis Vuitton opened a ship shaped flagship that combines shopping with an exhibition space and a cafe. Dior and Prada are adding cafes and restaurants to entice visitors. Some brands host ticketed shows, private salons for very important clients, and pop up museums that turn a visit into an event. This is not simply a marketing stunt. Spending on experiential luxury, from bespoke travel and fine dining to wellness, grew in 2024 even as personal luxury goods contracted.

Shanghai resident Natalie Chen, 31, captures how some urban professionals now think about luxury consumption.

“Truthfully speaking, I do not feel that buying another bag will improve my life,” she said, adding that she has shifted more of her budget to trying new restaurants and exploring travel experiences with friends.

From the property side, Zino Helmlinger, who leads China retail at CBRE, noted that a moderation was due after years of rapid growth.

“If you look at the megastars, they almost tripled their profit within five years. At some point, there is some counterbalancing, there is only so much you can grow, only so much you can generate.”

Patrice Nordey, CEO of the Shanghai innovation consultancy Trajectry, argues the purpose of these new flagships and cultural spaces goes beyond selling a product on the spot.

“If your purpose is not only to feed your client with consumer products, but more than that, you might actually resonate more strongly with them.”

Price gaps, daigou and the pull of shopping abroad

Price differences between China and overseas markets have become a major driver of where Chinese consumers make purchases. The weak yen made Japan a favorite for bargain hunters in 2024. Some brands are moving to global pricing to narrow gaps, and several imposed purchase limits or adjusted launch prices outside China to reduce arbitrage. Those steps take time to filter through. With overseas spending back to a large share of the Chinese total, onshore stores face a double squeeze from weaker foot traffic and heavier comparisons.

Another factor is the rebound of daigou, the gray market in which shoppers buy abroad to resell at home. Revenues linked to daigou grew by about 5 percent in 2024, especially in fashion and leather goods. The practice erodes the exclusivity that luxury houses work to build, dilutes margins, and complicates demand planning. Policymakers in places like South Korea have tightened oversight, and brands are revamping wholesale and tightening distribution. Expect more action on this front in 2025 as companies strive to protect brand equity while keeping loyal clients happy with fair access and service.

Domestic labels and discreet status rise

Chinese consumers are rewarding brands that speak to identity and heritage. Designers with a strong local point of view, such as Shang Xia or emerging names like Shu Shu Tong, are winning attention for craftsmanship and cultural storytelling. Affluent buyers also embrace experiences that signal taste rather than spending power, including art fairs, museum memberships, and private gallery tours. This is a shift from overt logos to quieter markers of status.

Consultants track a rise in what some call luxury shame. It does not mean an end to buying, more a change in how people choose and display. Many wealthy shoppers prefer understated lines, discreet logos, and limited items that do not shout for attention. The second hand luxury market continues to expand, helped by authentication platforms and a younger audience that sees pre owned as smart and sustainable. Large warehouse style stores filled with pre owned bags and shoes let twentysomethings keep up appearances at a lower cost while testing favorites before committing to a full price purchase later.

Gen Z and Millennials are reshaping the market

Younger consumers now account for a large majority of luxury spending in China, and their preferences are changing the game. They value experiences over status symbols and want brands to tell a story that connects with their lives. Technology is central to that expectation. From augmented try on tools to livestreamed shows and interactive games, the best campaigns fuse online and offline. Many are open to paying a premium for products that feel innovative.

Wellness is a new status marker. Surveys show a significant share of young luxury consumers plan to increase spending on health, fitness, and recovery. That might mean choosing a wellness resort or a training program over a new leather good. Sustainability also matters. Interest in pre owned goods remains strong, and transparency about sourcing and repair services adds perceived value. These buyers are pragmatic. They still purchase jewelry, watches, handbags, and premium beauty, yet they do so less often, with a sharper focus on value, quality, and service.

How brands are resetting in China

Rather than chase store count, global houses are rebalancing networks and investing in flagship concepts that can anchor a city. Several have closed weaker locations while building larger flagships or cultural venues in strategic districts. The aim is to create scarcity, raise service levels, and protect brand heat. Training sales teams to deliver personalized service is now a priority. For Hong Kong, the opportunity lies in sharpening service standards and exclusivity to stay relevant for travelers from lower tier mainland cities.

Growth also depends on more precise targeting across China. Tier 2 and Tier 3 cities offer pockets of resilience with different tastes and budget limits. Brands are tailoring assortments, stepping up digital content on platforms like Douyin, and integrating ecommerce with store service so clients move smoothly between channels. Supply discipline is part of the equation. Tighter stock controls and reserving the best assortments for top doors can limit discounting and protect a premium image. Companies are also harmonizing prices, investing in clienteling tools, and upgrading aftersales so ownership feels better in China than abroad.

Risks and signals to track in 2025

Consumer confidence remains fragile. The property market still weighs on household wealth, and younger urban consumers face a tough job market. Currency swings can quickly reopen price gaps with other markets. Travel capacity and visa policies shape where and how Chinese tourists spend. Pricing decisions need care. Aggressive price hikes risk alienating clients who are already more price aware, while deep discounting can hurt long term brand value.

Policy moves could help in the second half. Any meaningful stimulus, clearer timelines for the Hainan Free Trade Port, or improvements to the duty free experience could tilt more spending back onshore. Brands that keep investing in creativity and service, while aligning price and product to Chinese preferences, will be best placed to capture the next upswing when sentiment turns.

Key Points

• Domestic luxury sales on the Chinese mainland fell an estimated 18 to 20 percent in 2024, returning to 2020 levels
• Most forecasts point to a flat China luxury market in 2025, with a better outlook in the second half
• Chinese high net worth individuals now prioritize travel and culture rich experiences over goods
• Experiential luxury spending rose in 2024 while personal luxury goods contracted
• Overseas purchases accounted for about 40 percent of Chinese luxury spending in 2024, helped by currency gaps
• Hainan’s duty free sales dropped about 29 percent in 2024 amid weaker traffic and competition
• Daigou activity grew about 5 percent in 2024, pressuring margins and brand control
• Domestic brands rooted in Chinese culture are gaining favor as shoppers seek identity and craftsmanship
• Gen Z and Millennials, who drive most luxury spending, value wellness, authenticity, and innovative experiences
• Brands are consolidating stores, harmonizing prices, upgrading service, and targeting Tier 2 and Tier 3 cities