In 2024, global sales of luxury goods are expected to slow down due to several key factors. Bain & Company’s report, published on June 18, forecasts that sales of personal luxury goods will grow at the slowest rate since 2020. The decline in growth could be tied to a decline in China, where outbound tourism and economic uncertainties have impacted local demand for luxury items.
China’s economic uncertainties and a rise in outbound tourism are cited as contributors to the predicted slowdown. The report also mentions the phenomenon of “luxury shaming” as a possible cause for sluggish sales growth. Luxury shaming is when individuals hesitant to showcase their wealth through luxury purchases due to fear of being judged or criticized by others.
The rise in outbound tourism among wealthy Chinese citizens has diverted spending away from luxury goods, impacting sales in the Chinese market. In addition, economic uncertainties in China have led to “luxury shame,” with some individuals hesitant to showcase their wealth through luxury purchases. This phenomenon has also been observed in other countries during times of economic hardship.
Bain & Company partner Claudia D’Arpizio highlighted that luxury goods companies may also be contributing to the slowdown in sales. Some companies have increased prices without introducing enough innovative products, leading to consumer dissatisfaction and confusion. These factors combined could lead to a significant slowdown in the growth of global luxury goods sales in 2024.
The projected slowdown in luxury goods sales marks a potential end to the recent spike in global sales.
