A subdued outlook for 2025 in the global luxury market

Altagamma-Bain Monitor – 2025 Update: Global instability is impacting consumer confidence, leading to downward revision of forecasts for the personal luxury goods sector. The United States and China have shown signs of weakness, while the EU and Japan remain stable. The outlook is positive in the Middle East, Latin America and Southeast Asia. An estimated 300 million new consumers are expected by 2030.

The update of the Altagamma-Bain Monitor on the Global Personal Luxury Goods Market, produced by Bain & Company in collaboration with Altagamma, highlights how the current climate of geopolitical, trade and financial market instability is negatively impacting consumer confidence and demand for luxury personal goods. Compared to pre-Trump era forecasts, the 2025 projections have inevitably been revised downward. What was initially a broadly positive outlook has shifted to a decline of between -1% and -3% in the first quarter, with year-end figures expected to fall between -2% and -5%. However, when these contractions are viewed in the context of the 2019-2024 period, during which the sector experienced an overall growth of around 28%, the results remain significantly above pre-pandemic levels.

Geographical markets: US and China are the worst

While some mature markets are experiencing a decline, others continue to demonstrate strong dynamism. The U.S. market is currently facing the most significant challenges, with spending affected by tariff-related volatility. However, interest in affordable luxury remains, offering hope for a medium- to long-term recovery. High-spending consumers, by contrast, continue to show a certain stability in their purchasing behaviour. China is also suffering, with its middle class at a standstill. However, the country retains considerable high growth potential. Europe and Japan remain more stable, although both are beginning to show signs of a slowdown, primarily due to a decline in tourism and related consumer spending.

The Middle East, Latin America and Southeast Asia are performing more strongly, confirming the positive trend seen in recent months.

Generations and consumption behaviour

Generational data is essential for accurately analysing trends within the sector. Generation Z approaches consumption with a desire for creativity, seeking a dynamic balance between individual expression and social conformity. Millennials appear more cautious in their purchasing behaviour but are more open to embracing innovative proposals. Baby Boomers tend to prioritise spending on experiences rather than tangible goods. In general, consumer engagement with luxury goods is declining. Interest in brands is waning, growth in social media followers is slowing, and interactions are down, mainly due to high prices and a perceived lack of creative innovation. Since 2022, over 40% of brands have seen a drop in the volume of online searches, follower growth on social platforms has declined by 90%, and engagement rates have fallen by 40%. However, the long-term outlook for the industry remains positive. With global wealth on the rise and a projected 20% increase in High Net Worth Individuals (HNWIs), the market is expected to gain over 300 million new consumers over the next five years, half of whom will be Gen Z and Alpha, sustaining demand for high-end goods.

Returning to the essence

“2025 marks a turning point for global luxury: for the first time in 15 years, the industry is slowing, constrained by economic instability, geopolitical tensions and profound cultural shifts. The outlook for the rest of the year remains uncertain, yet the sector’s fundamentals are solid,” said Claudia D'Arpizio and Federica Levato, Senior Partners at Bain & Company and authors of the study. “For brands, this is the moment to take a bold step: to return to their essence.”

They must forge genuine bonds, speak the language of values, offer experiences that go beyond the product, and cultivate deep, lasting relationships with consumers. The future of luxury lies not in volume, but in meaning. That is to say: fewer, yet more loyal customers. Less quantity, but greater value. In essence, the most discerning luxury consumers seek less intrusion and more personalisation. According to the Boston Consulting Group's True-Luxury Global Consumer Insight study, 60% of consumers feel overwhelmed by excessive marketing, 80% seek exclusive spaces rather than standardised experiences, and 90% consider product quality to be essential.

The top-tier: clients of choice

The study identifies the top-tier customer (0.1% of the population, yet responsible for 37% of the sector's total spending), as the key driver of the luxury market’s recovery.  This elite segment sits at the very top of the pyramid and holds 100% of market value in categories such as yachts and jets, 71% in design and art, 66% in wines and spirits, and 34% in jewellery and watches. These clients show a strong preference for experiential luxury and embrace the growing “health as wealth” trend, which encompasses wellness, aesthetics and care of personal spaces. This segment is expected to grow by around 10% over the next 18 months. Their relevance is closely linked to an ever-expanding demographic: High Net Worth Individuals (HNWIs). In 2024, the global population of HNWIs exceeded 940,000, and by 2030, it is expected to grow at a compound annual growth rate (CAGR) of 9% in terms of population and 8% in terms of assets (from €68 trillion to €103 trillion).

North America remains at the forefront, accounting for 46% of the global HNWI population, yet new wealth hubs are emerging. Regions such as India and Southeast Asia are experiencing a strong momentum in wealth creation. India particularly stands out, with its HNWI population expected to grow at an estimated CAGR of 11-15% through 2034.