China’s luxury market in 2024 faced a significant slowdown driven by economic stagnation, a real estate crisis, and rising outbound shopping.The year 2024 presented an inflection point for China’s luxury market as economic pressures, shifting consumer behaviors, and growing arbitrage dynamics highlighted structural weaknesses in what was once the most promising growth engine for global luxury brands.
Price sensitivity among Chinese consumers drove a resurgence in outbound shopping, as favorable exchange rates and tax-free opportunities in destinations like Japan and Hainan made luxury purchases significantly cheaper. Japan’s weak yen reduced prices for luxury goods by 30 to 40 percent, attracting a steady stream of Chinese shoppers.in sales, benefiting from its competitive pricing and accessibility.
The changing tastes of China’s younger generations further reshaped the luxury landscape. Millennials and Gen Z gravitated toward brands with cultural relevance, authenticity, and sustainability while rejecting overt displays of wealth. This shift in consumer behavior aligns with Xi Jinping’s ongoing campaign against “luxury shame,” which discourages ostentatious consumption and curbs the prominence of wealth influencers on social media.