What: MDRi's China Luxury Consumer Forecast 2025 reveals five transformative trends reshaping China's luxury sector, highlighting a shift towards experiential luxury, sustainability, and digital integration across emerging urban markets.

Why it is important: This comprehensive analysis provides crucial insights into China's evolving luxury landscape, where the convergence of experiential retail, sustainability concerns, and technological integration is reshaping consumer behavior and market dynamics across different city tiers.

China's luxury market continues to evolve with significant shifts in consumer behavior and preferences. According to Bain & Company, the sector is expected to maintain mid-single-digit growth in 2024, following a robust 12% year-on-year growth in 2023. The forecast reveals that 56% of surveyed consumers plan to increase their luxury spending, with Tier 2 and 3 cities emerging as key growth drivers. The research identifies five major trends: the rise of experiential luxury, with 68% of consumers increasing wellness-related spending; Sanya's emergence as a strong competitor to Shanghai in luxury retail; growing national pride driving domestic brand preferences; sustainability becoming a cornerstone with 85% of consumers prioritising it; and the integration of technology, where 90% of consumers value AI-driven personalisation. These trends reflect a broader transformation in luxury consumption, particularly among younger generations, with Gen Z focusing on wellness and self-care while Millennials seek indulgent experiences. The market's evolution demands innovative responses from brands, balancing traditional luxury values with emerging consumer priorities in technology and sustainability.

IADS Notes: Recent market developments support MDRi's forecast findings. In April 2024, Savills reported major Chinese cities allocating 16% of retail space to entertainment zones , while March 2024 saw the second-hand luxury market reach USD 8 billion . The transformation of consumer behavior is evident in November 2024 data showing 95% of Chinese travelers integrating shopping into their journeys . PwC's September 2024 forecast suggests China could become the world's largest luxury market by 2030, reaching USD 148 billion .

This evolution is further demonstrated by Coresight's January 2024 identification of "meaningful consumption" as a key trend , with consumers increasingly seeking purposeful purchases and sustainable practices. The market's digital transformation is particularly noteworthy, with December 2024 data showing 230 million users engaging with retail AI applications , indicating a significant shift towards technology-enhanced luxury experiences.

Navigating change: Insights into China’s luxury market trends for 2025