What: In China, customers are increasingly wary of displaying signs of wealth, following a government crackdown.

Why it is important: While it will, without a doubt, impact the national market, what about international luxury consumption by Chinese nationals?

In China, there has been a noticeable shift among consumers towards more discreet luxury goods, influenced by a decrease in local demand and a growing sense of "luxury shame." This sentiment is detailed in the latest Luxury Goods Worldwide Market Study by Bain & Company and Altagamma. Federica Levato of Bain & Company highlighted that Chinese customers are now favoring private shopping experiences and understated items over flashy luxury products. Similarly, Alex Anton from the luxury online retailer 2-Times noted a shift in consumer behavior, with an increased interest in independent and local designers, as well as a higher frequency of purchases despite a greater sensitivity to pricing compared to Western consumers.

Anton also mentioned that Chinese consumers are moving towards an "anti-discounting mentality," particularly following the market exits of Farfetch and Matches, which diluted their brand salience with constant discounts. In contrast, 2-Times focuses on early access to exclusive brands and maintains a strong stance against discount-driven sales, emphasizing personalized selling and sophisticated technology. Furthermore, the crackdown on public displays of wealth by China’s cyberspace administration is reinforcing this trend towards discreet luxury. Anton suggests that in 2024, luxury brands should educate their communities on avoiding ostentatious displays of wealth and instead promote healthier, more candid lifestyles to maintain consumer trust and connection.

Luxury fatigue is taking off in China