China's Wealthy Are Shopping Luxury Again—But Not How You'd Expect

1% to 3%. That's how much luxury goods spending grew in mainland China during the fourth quarter of 2024, according to Bain & Company. The number might seem modest, but it represents something significant: China's luxury market has returned to positive growth after three challenging quarters.

When Stock Markets Lift Shopping Bags

Bain attributes this turnaround partly to China's "robust stock market," which boosted wealth among affluent consumers. As stock portfolios swelled, so did appetite for premium purchases. But there's a twist in this recovery story that luxury brands need to pay attention to.

The same survey reveals that China's wealthy are increasingly favoring experiences over products. Instead of splurging on handbags and watches, they're investing in premium travel, fine dining, and exclusive experiences. This shift suggests the luxury market isn't just recovering—it's evolving.

The Experience Economy Takes Hold

This preference for experiences over possessions reflects broader changes in Chinese consumer psychology. After years of rapid wealth accumulation, many affluent Chinese are moving beyond material status symbols toward more personal, experiential forms of luxury.

For global luxury brands, this creates both challenges and opportunities. Traditional product-focused strategies may need reimagining. Brands that can offer immersive experiences—whether through exclusive events, personalized services, or lifestyle ecosystems—are likely to capture more of this evolving market.

Reading the Market Signals

The 1-3% growth rate, while positive, remains well below the double-digit expansion China's luxury market enjoyed in previous boom periods. This suggests the recovery is cautious and selective, with consumers becoming more discerning about their luxury purchases.

Stock market performance clearly influences luxury spending patterns among China's wealthy. As equity markets strengthened in late 2024, confidence returned to high-end retail. But this correlation also means luxury sales could remain volatile, tied to broader market sentiment and economic conditions.

Global Implications

China represents roughly 20% of global luxury consumption, making these trends globally significant. If Chinese consumers' shift toward experiences spreads to other markets, it could reshape the entire luxury industry's approach to product development and marketing.

Retailers worldwide are watching these patterns closely. The preference for experiences over products could accelerate changes already underway in luxury retail, from showrooming concepts to subscription-based luxury services.