How can luxury brands overcome the impact of ‘luxury shame' in China?

China's market is pressured by rising outbound tourism and declining local demand.

Luxury brands are facing difficulties in China, partly due to 'luxury shame,' where consumers are increasingly hesitant to splurge on high-end items. To counter this, brands need to rethink their value propositions and diversify their customer base to stay competitive.

The country’s market is under strain from two key factors, including the revival in outbound tourism that’s pulling consumers away from domestic spending, and economic uncertainties that are weakening local demand, according to Bain & Company’s Luxury Goods Worldwide Market Study, conducted in collaboration with Altagamma.

‘Luxury shame’

The middle class, once a robust driver of luxury consumption in China, is now facing financial strain, leading to more cautious spending behaviours. This shift is similar to the "luxury shame" seen during the 2008-09 financial crisis in the Americas.

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