Chinese Luxury Consumer Sentiment 2025: Trends and Future Outlook

Chinese luxury consumption in 2025 is entering a new phase of change. Insights drawn from CXG Group reveal that weaker economic confidence is pushing consumers to save more, spend cautiously and seek value through affordable alternatives and cross-border shopping. At the same time, domestic luxury brands are gaining strength through cultural resonance, younger generations are driving a shift towards experiences, and physical retail is re-emerging as a crucial touchpoint. Together, these trends highlight how China’s luxury market is being reshaped.

Economic Uncertainty Reshapes Behaviour

Consumer confidence in China’s recovery has fallen sharply. While more than 80% of consumers were optimistic in 2023, that figure has dropped to just 55% this year. Concerns over the property market are a central factor, with more than 70% of respondents saying they have adjusted their spending due to falling housing prices. Employment anxiety is also widespread, with over a third of households worried about job security.

As a result, consumers are adopting what can be described as a defensive mindset. Rather than pursuing short-term indulgence, many are prioritising savings and financial planning. Almost two-thirds of respondents say they are saving more than in the past two years, with health, retirement, children’s education and preparation for large future purchases topping the list of motivations. Spending behaviour is shifting away from the present moment and towards building security for the future.

Price Sensitivity and the Search for Value

Luxury consumption is becoming increasingly defined by price sensitivity. Half of surveyed consumers report buying luxury goods less often due to price increases, while more than half say they compare prices or seek discounts before making a purchase. This value-conscious mindset has given rise to budget substitutes— affordable alternatives to luxury items. Nearly half of consumers have already purchased such substitutes, and a similar proportion are open to doing so in future. Clothing and accessories are the categories most affected, suggesting that price considerations are reshaping even the most traditional luxury segments.

Cross-border shopping has also become a key strategy. Japan has surged as a preferred destination thanks to the weaker yen, with 40% of respondents choosing to buy luxury products there compared with only 8% in 2023. Price advantage is the main draw. At the same time, Hong Kong, Hainan and mainland China remain popular, each offering different blends of convenience, assortment and experience.

Domestic Luxury Brands Gain Ground

While international brands retain global prestige, Chinese luxury labels are increasingly commanding attention. Consumers see them as delivering both better value and more accessible pricing. Crucially, cultural identity has emerged as a defining strength. More than 70% of respondents appreciate the way domestic brands reinterpret Chinese heritage for modern audiences, demonstrating that cultural resonance is now a competitive advantage.

Generational differences are clear. Younger consumers tend to be motivated by affordability and convenience, while millennials are most strongly driven by cultural connection. Older generations, particularly those aged 40 and above, show the deepest loyalty to brands that express national identity. Geographic divides add further nuance: enthusiasm for local brands is significantly higher in second- and third-tier cities than in major urban centres, highlighting growth potential beyond traditional luxury hubs.

From Products to Experiences

The concept of luxury is broadening beyond possessions. Consumers, especially younger generations, are placing greater emphasis on experiences that enhance lifestyle and wellbeing. Health and wellness, luxury travel and entertainment are the categories expected to see the fastest growth.

Travel is especially important. More than 60% of respondents took a leisure trip in the past year, and almost half intend to spend more on travel in the year ahead. Japan appeals strongly to shoppers seeking superior service and leisure opportunities, while Hong Kong draws those interested in variety and integrated entertainment. Among Generation Z, this shift is most pronounced: they are prioritising wellness products, travel experiences and entertainment as expressions of their identity and aspirations.

The Future of Luxury in China

Despite current caution, the long-term outlook is positive. Over 80% of consumers plan to increase luxury spending once the economy improves, with watches and jewellery as top priorities. Motivations centre on self-reward, confidence and personal expression, while in smaller cities, luxury also signals social success — reinforcing the role of brand storytelling. Physical retail is regaining importance, especially for purchases above 15,000 RMB, where consumers value reassurance and immersive service. Yet performance is uneven: leading brands enjoy recommendation rates above 70%, while weaker players fall near 30%. This gap highlights both the challenge and the opportunity to win loyalty through stronger in-store experiences.

Conclusion

The Chinese luxury consumer of 2025 is cautious yet aspirational, pragmatic yet driven by meaning. They are saving more, spending with greater scrutiny, and demanding cultural relevance alongside value. Domestic brands are gaining traction, experiential consumption is accelerating, and physical retail is once again central to the purchasing journey.

Now is the time for luxury brands to re-evaluate their strategies, strengthen cultural storytelling, and elevate the customer experience. Contact us now!