Global luxury “stays resilient” despite economic uncertainties and consumer shifts

Global luxury markets proved resilient into 2025, as consumers worldwide spending reached 1.44 trillion euros, to stand broadly flat compared with last year, with the luxury sector expected to improve in 2026, according to management consulting firm Bain & Company, in partnership with Altagamma, the Italian luxury goods manufacturers’ industry association.

The annual Bain-Altagamma Luxury Goods Worldwide Market Study revealed that overall luxury spending was “relative stable” this year, similar to last year, despite headwinds from economic and geopolitical uncertainties, and key consumer shifts as luxury consumers continue to prioritise experiences over possessions, with a pivot toward wellness, connection, and self-reward.

The global market for personal luxury goods is expected to remain broadly stable this year compared with last, with a forecast 2025 value of 358 billion euros, compared with 369 billion euros in 2023 and 364 billion euros in 2024, down about 2 percent this year, which Bain & Company states signals “maturity rather than renewed momentum in the wake of this market’s post-pandemic rebound”.

While ultra-wealthy buyers are continuing to sustain demand for high-end luxury goods, aspirational consumers have pulled back, adding to the pressure on traditional luxury, the report adds.

Claudia D’Arpizio, senior partner and leader of global fashion and luxury practice at Bain & Company, and the lead author of the study, said in a statement: “After the shopping spree era, experiences and emotions have become the true engine of luxury growth. The market remains resilient but not immune to macro-economic complexities, navigating a fragile global balance.

“Ahead lies a phase of quality-driven growth, fuelled by discipline, ethics and innovation. Expansion will Favor fewer, higher-impact locations, a shift toward a more discerning, experience-led model.”

Jewellery and eyewear to lead luxury revival

Leading the revival of the personal luxury goods market is jewellery, added the report, with the jewellery sector expected to expand 4 to 6 percent this year, powered by “resilient demand, emotional appeal, and a surge in customisable designs”. Eyewear is also continuing to “perform strongly,” with expected growth of 2 to 4 percent.

The market for watches is marked by “increased polarisation,” with high-end pieces thriving while tariffs and pricing pressures fuel the resale market, while apparel “holds steady,” driven by the strong performance of accessible players.

The report adds that the leather goods sector will most likely experience a “wobble” in the coming year, as the market is “lacking new hero bags,” but will be lifted by “playful, aspirational alternatives”. In addition, shoes lag, “hurt by price sensitivity and sportswear competition,” though the report notes that statement styles “hint at recovery”.

“Overall, accessible luxury fashion is rebounding, driven by brands’ success in engaging downtrading consumers, reactivating heritage clients, and attracting value-conscious Gen Z shoppers,” adds the report.

When it comes to physical retail, the Bain-Altagamma study advocates that brands must reimagine their retail strategy by reconsidering their footprint and opting instead for fewer, larger stores “that deliver emotion, immersion, and personalised connection”.

“Fresh markets” will fuel luxury’s next chapter

Bain-Altagamma adds that 2025 was marked by “uneven regional trajectories and shifting consumer dynamics,” and that luxury brands need to look beyond traditional hubs and consider a new wave of markets, such as the Middle East, Latin America, Southeast Asia, India, and Africa, which when combined represent a market value of around 45 billion euros in 2025, matching Mainland China in scale.

“From Gen Z’s embrace of accessible luxury in Southeast Asia to India’s surging middle class and Africa’s emerging local players, these regions signal growing luxury potential,” states Bain and Altagamma.

The report notes that spending in China is set to contract by between 3 and 5 percent this year, as the market pivots toward local, more accessible brands and experience-driven categories, while Japan’s market is decelerating after a strong 2024, due to cooling tourism.

In Europe, there is a softening trend, with its luxury market set to dip in 2025 by between 1 and 3 percent amid slowing tourists impacted by a strong euro and geopolitical tensions, while the Americas are set to hold “relatively firm,” with growth of between 0 and 2 percent, sustained by renewed domestic demand in the US and expanding luxury footprints in Mexico and Brazil.

In contrast, the Middle East stands out as luxury’s brightest performer, with expected growth of between 4 and 6 percent, which the report says is fuelled by robust tourism in Dubai and Abu Dhabi, and sustained demand in Saudi Arabia.

Shift in luxury customer base and spending patterns

The report also highlights that luxury’s consumer base continues to shrink and splinter, with the number of luxury consumers dropping from 400 million in 2022 to around 340 million in 2025. Between 2024 and 2025, new customer acquisition for luxury brands has declined by 5 percent.

Spending patterns within the luxury market are also “fracturing,” the report finds, with buyers making fewer purchases and favouring smaller indulgences and markdown channels. Spending is also shifting to experiences, affordable alternatives, and resale, signalling a reset in how consumers engage with luxury. Even big spenders are showing signs of fatigue, as the report found that while they account for roughly 46-47 percent of the 358-billion-euro personal luxury goods market, their spending has plateaued this year.

Federica Levato, senior partner at Bain & Company and leader of the firm’s EMEA fashion and luxury practice, who co-authored the report, commented: “Luxury brands are redefining their reach through adjacent and lower-entry categories, expanding beyond traditional lines like sneakers and small leather goods into areas such as food, dining, and wellness.

“As pricing structures elevate and customer interest surges, brands face two key challenges: re-engaging aspirational consumers and legitimizing their expansion while maintaining coherence. To future-proof the model, brands must evolve from reach to precision, from blending with trends to shaping them. Longevity will reward brands that weave ethics in their value proposition with intimacy and integrity in their dialogue with consumers.”

Looking ahead to 2035

Looking further ahead, the report concludes that growth for personal luxury goods of 4 to 6 percent per year “remains realistic,” due to continued consumer expansion and enduring demand. By 2035, the personal luxury goods market should reach between 525 and 625 billion euros, while overall luxury spending could range between 2.2 and 2.7 trillion euros, according to Bain and Altagamma forecasts.

D’Arpizio added: “Luxury stands at a crossroads: uneven regional growth paths, pricing pressure, and fragmented consumer personas are testing its core.

“Creativity is progressively coming back, but a broken price–value equation calls for integrity and renewed trust. This is luxury’s moment of truth: to rise through ethics, inclusivity, and authenticity, or retreat into elitism. The new formula is clear: entertainment, emotion, and ethics are the real sources of value. The winners will balance profit with purpose, creativity and conscience, turning recalibration into reinvention.”