China’s luxury goods market is poised for a return to growth as government policies and easing economic pressures boost demand. But this positive sentiment is not equally shared, and changing consumer preferences will continue to challenge luxury brands.

China’s luxury market returns to growth

Improving economic conditions are helping to put luxury retail back on a growth trajectory. Personal luxury retail sales growth in China declined 2.7% in 2025, a significant improvement compared with the 8.8% drop in 2024. The sector is forecast to grow 3.5% in 2026 as the property sector stabilizes and the stock market continues to rally. Growth is forecast to accelerate to 6.6% in 2028. Ecommerce will account for 22.3% of personal luxury retail sales in 2026, with its share remaining relatively stable through 2030.