China’s Personal Luxury Goods Market May Recover in 2026

The year 2026 could bring the much anticipated growth in China’s personal luxury goods market, even as consumers spend with caution. In 2025, the mainland showed some signs of improvement as the luxury market declined -3% to -5%, which is a much smaller contraction than -17% to -19%, recorded in 2024, according to a recent study by Bain & Co.

Discretionary spending was restrained in early 2025, however, the second half of the year showed signs of improvement catalysed by strong stock market performance and positive but cautious consumer sentiments.

Luxury market results varied by categories. Beauty performed the best, rebounding +4% to +7% showing sustained demand for ultra premium skin care and fragrances as consumers desired emotional and sensory experiences. Jewellery sales also showed improvements with decline narrowing to -5%, as compared to -25% to -30% in 2024. Jewellery did well because consumers sought value preservation as metal prices continued their upward rally.

In contrast, sales of leather goods were weak with an estimated -8% to -11% decrease, hampered by steep price increases and a lack of innovation. Watches faced the harshest decline at -14% to -17%. due to a shift towards rational purchasing; consumers opting for secondhand pieces or alternative investment assets.

Fashion noted a decline too in 2025 but much less than 2024. Shorter product life cycles boosted ready-to-wear sales. The report states that the fashion segment showed a higher degree of innovation and stronger engagement with both elite and aspirational consumers.

Overall, innovation and asset-value were the primary drivers for the categories that managed to withstand the broader economic uncertainty in mainland China and these trends will continue to shape the luxury market in 2026.

Notably, mainland China's secondhand luxury market grew by +15% to +20% in 2025, even though it accounts for less than 10% of total luxury sales. While the primary luxury market struggled, soaring prices pushed shoppers toward these affordable alternatives.

Another significant trend seen in 2025 that will continue to shape China’s luxury market in 2026 is the role of local Chinese brands that are raising their status from being just small competitors into major market shapers. By blending global quality with authentic cultural identity, they are redefining luxury for modern shoppers in the mainland. These players compete with international rivals playing on their localisation strengths; using designs that match local tastes, by acing digital-first marketing on apps like WeChat, and by offering luxury shoppers value for money with lower prices thanks to local supply chains. While already dominant in beauty, domestic brands are now successfully expanding into fashion and other personal luxury categories as well.

Other factors that could shape the 2026 luxury market in China are encouraging domestic policies, and volatile geopolitical situations that are likely to shift consumption back to the mainland. Conclusively, as shoppers get smarter and cautious, the growth will be slow but sustainable.