Luxury consumer behavior in 2025 reveals a stark divergence: cautious spending prevails across Mainland China amid economic pressures, while Hong Kong luxury buyers exhibit renewed confidence. MDRi surveys conducted in May 2025 with N = 1,000 luxury Mainland China luxury consumer and N = 300 in Hong Kong uncover how these contrasting sentiments shape opportunities and challenges for luxury brands heading into 2026.
In this analysis, MDRi covers the following:
- Overall in Mainland China, Challenges Persist Due to Economic Headwinds
- In Hong Kong, There Is Renewed Demand for Luxury Purchase
- Distinct Consumer Segments (Gen Z, Millennials and Mature) Present Both Challenges and Opportunities
- Traditional Luxury Categories Face Mounting Pressure While Experiential Luxury Gathers Momentum
- Reasons Why the Shift towards Experiential Luxury
1. Overall in Mainland China, Challenges Persist Due to Economic Headwinds
Mainland China: Economic Pressure Fuels Pragmatism
Luxury spending among Mainland Chinese consumers in the past 12 months recorded a pronounced decline of 10%, primarily due to intensifying economic headwinds (see Figure 1). Consumer sentiment towards the economy weakened markedly, with a 10% drop in strong economic confidence and an 8% decrease in positive outlook toward the future. Heightened geopolitical tensions, most notably U.S. trade tariffs—cited negatively by 45% of respondents—further eroded spending willingness and triggered widespread financial caution (see Figure 2).
Traditional motivators for luxury purchases are shifting away from logo or explicit display of the brand. Chinese buyers now favor exclusivity, personal satisfaction, and luxury experiences such as travel and dining over brand prestige and conspicuous consumption (see Figure 3). As a result, demand for conventional luxury goods has weakened, with a clear move towards more selective buying and experiential categories.
2. In Hong Kong, There Is Renewed Demand for Luxury Purchase
Hong Kong: Stabilizing Sentiment and Renewed Optimism
In contrast to the Mainland, Hong Kong’s luxury market, while not immune to the pressures of economic volatility, has demonstrated greater resilience. Although spending contracted by 12% in 2024, MDRi’s research highlights a noteworthy 2% increase in consumers’ willingness to spend on luxury in 2025. Unlike the pragmatism prevailing on the Mainland, Hong Kong luxury buyers exhibit growing optimism, underpinned by an 8% rise in economic confidence and a return to steady financial conditions (see Figure 1 and Figure 2).
Luxury in Hong Kong is increasingly seen as a lifestyle enhancer and reward—a means of cultivating aspiration and personal fulfillment and personal expression with exclusive products/ offerings. Emotional value takes precedence, driving purchases that reflect both pleasure and the pursuit of an elevated way of life (see Figure 3).
3. Distinct Consumer Segments (Gen Z, Millennials and Mature) Present Both Challenges and Opportunities
Millennials and Mature Consumers Fuel Current Demand
More than half of Chinese millennial and mature luxury consumers are poised to increase their luxury spending over the next 12 months (see Figure 4). Mature consumers, in particular, seek exclusive, branded products as markers of social achievement and prestige (see Figure 5), reinforcing their status within society.
Gen Z: Hesitant for Now, But Poised for Future Growth
Gen Z stands out as the most cautious segment, with few planning to increase luxury purchases in the near term (see Figure 4). Their reluctance is linked closely to their concerns about global uncertainty (see Figure 5).
However, this group feels less pressure from rising living costs than older peers, and a notable fraction (66%) believe their financial situation will get better —higher than other groups. Though most are saving more now, their underlying optimism hints at a strong rebound in luxury spending once macroeconomic confidence returns. (See Figure 6)
4. Traditional Luxury Categories Face Mounting Pressure While Experiential Luxury Gathers Momentum
Declining Appetite for Traditional Luxury Goods
The steadiest warning comes from big-ticket categories. Watches, jewelry, and handbags—all once symbols of status—are seeing a pronounced drop in sentiment (see Figure 7 & Figure 8):
- 18% of luxury consumers plan to spend less on watches
- 10% anticipate further reductions in jewelry purchases
- Handbags are also under scrutiny, with 9% planning cutbacks
Given the historical importance of these segments, their decline signals a significant challenge for luxury brands across Greater China. Bain & Company’s research[1] corroborates that jewelry and watch sales are among the most severely affected, highlighting a challenging environment for luxury brands.
[1] Bain & Company, Bain-Altagamma 2024 Worldwide Luxury Market Monitor
The Rise of Experiential Luxury: Travel and Dining
As spending on goods wanes, luxury experiences are flourishing—most notably in travel and fine dining:
- Fine dining expenditure has surged by 21% (see Figure 7)
- Travel spending remains resilient facet of luxury consumption with 44% of wanting to spend more and only 8% wanting to spend less in this category (see Figure 8)
This shift reflects a broader redefinition of what luxury means to Chinese and Hong Kong consumers. Instead of overt displays of wealth, shoppers now prioritize exploring new cultures, traveling well, and enjoying diverse culinary journeys. Experiences, rather than objects, are the new status symbol, offering lasting memories and personal enrichment.
5. Reasons Why the Shift towards Experiential Luxury
Underlying Drivers of Changing Preferences from Traditional Luxury Goods to Experience
Several key factors drive this transition away from goods and toward experiences (see Figure 9):
- Evolving lifestyle preferences (41%): A growing desire for personal growth and new adventures
- A focus on savings and investments (36%): Economic caution encourages consumers to rethink discretionary spending
- Concerns over economic stability (33%): Uncertainty about China’s future prompts shoppers to seek value in experiences over material acquisitions
These trends not only challenge legacy brands but also signal substantial opportunities for luxury travel, hospitality, and dining providers.
Conclusion
The divergence between Mainland China and Hong Kong’s luxury markets shaped by distinct economic realities and consumer drivers will continue to be challenging for luxury brands.
In 2025, meaningful growth hinges on luxury brand ability to adapt quickly to shifting preferences, leverage emotional branding, and seize market-specific opportunities. The demand for genuine value, exclusivity, and authenticity from Mainland Chines and Hong Kong consumers required luxury brands/ houses to continue to evolve and elevate their customer engagement strategy with innovative and exciting product offerings.