Global luxury market trends 2025‑2027: generational and regional analysis

Executive summary

The luxury market is entering a phase of moderate growth after several years of rapid expansion. Global luxury revenues should grow at a rate of 2 %–4 % per year between 2025 and 2027. Leather goods and jewellery will be the fastest‑growing categories (4 %–6 % per year), while high‑spending clients will generate 65 %–80 % of the growth. 2024 marked a turning point: the market remained practically flat (≈ €1.48 trillion) and personal goods declined by 2 %, while experiences (hotels, dining, travel and yachts) were the only categories to grow. China’s slowdown – where luxury sales fell 18 %–20 % in 2024 and 2025 is expected to be flat – and macro headwinds in Europe are dampening growth, although recovery could arrive in the second half of 2025.

At the same time, a profound generational shift is underway. A Luxonomy study estimates that millennials will account for 40 % of the global personal luxury goods market in 2025 and that Generations Y and Z together will reach 45 % of the market. Younger buyers are increasingly shopping through digital channels: 70 % of luxury purchases are influenced by online interactions and 14 % of 18‑24‑year‑olds make their first luxury purchase online. Despite this digital boom, we anticipate that online and mono‑brand stores will be the two leading channels in 2025, each with around 25 % of sales, while 75 % of spending will still take place in physical stores.

This report delves into the figures and global trends to provide a structured analysis by segment, region and generation, as well as a review of the leading brands and companies in the sector.

1 Overview of the luxury market 2024‑2027

1.1 Size and growth

Luxonomy calculates that the luxury market (nine segments: automobiles, personal goods, hospitality, wines & spirits, gourmet food, furniture, art, jets/yachts and cruises) reached ≈ €1.48 trillion in 2024. Sales were almost flat (–1 % to +1 % versus 2023), signalling the end of the double‑digit growth phase that characterised 2019‑2023. The personal goods segment – the heart of the industry – contracted by 2 %, the first real decline in 15 years (excluding the pandemic). In contrast, experiences (luxury hotels, cruises, gourmet dining and travel) grew strongly; for example, high‑end dining increased 8 % and luxury cruises rose 30 %.

Luxonomy projects that the global luxury market will return to growth, with increases of 2 %–4 % per year between 2025 and 2027. This forecast is supported by the resilience of high‑spending clients and the expansion of emerging markets such as the Middle East and India, although they will not fully offset the slowdown in China and Europe. For the personal goods segment, Luxonomy expects moderate growth between 0 % and 4 % in 2025 and thereafter annual growth of 4 %–6 % until 2030, bringing the segment’s value to €460 billion–€500 billion.

1.2 Drivers and challenges

• Macroeconomy: High interest rates and the Chinese slowdown have dampened demand. The Chinese market, which accounts for about one third of global sales, fell 18 %–20 % in 2024 and is expected to be flat in 2025. Weak consumer confidence and the property crisis weigh on spending.
• Shift towards experiences: High‑net‑worth consumers prioritise travel, hotels and dining over physical products. In 2024, experiences grew 5 %, while luxury goods fell 2 %. Luxury hospitality grew 4 %, driven by digital personalisation and early bookings.
• Price versus volume: The boom of 2019‑2023 was mainly due to price increases, which explained more than 80 % of growth. That strategy has reached its limit: consumers now demand greater creativity and quality and will not tolerate unlimited hikes.
• Customer diversity: The luxury audience is becoming more heterogeneous. Brands must attract younger consumers without alienating mature clients.

1.3 Growth forecast

The following chart summarises the growth forecast for the personal luxury goods segment based on Luxonomy’s estimates (intervals converted to midpoint values):

The chart shows that 2024 was practically stagnant (–1 % to +1 %), 2025 would grow around 2 % (0 %–4 %), and the 2026‑2030 period should stabilise at about 5 % per year (4 %–6 %).

2 Composition and evolution by segments

2.1 Key segments

2.2 Shift towards experiences

In 2024 spending moved from goods to experiences: experiences grew 5 %, while luxury goods (excluding cars) increased only 2 %. This shift reflects the quest for unique memories and well‑being (wellness retreats, bespoke travel, etc.), a trend that will continue. For physical products, the entry‑level segment shrank, while absolute luxury continues to attract high‑net‑worth customers.

3 Regional perspectives

3.1 Asia and China

China accounted for around one third of global luxury sales; however, the market contracted 18 %–20 % in 2024. The property crisis and low consumer confidence caused personal goods sales to decline. Luxonomy forecasts that 2025 will remain flat, with a recovery in the second half of the year. For some categories the decline was offset by purchases from Chinese tourists in Japan, thanks to the exchange‑rate advantage. Sales on the duty‑free island of Hainan plunged 29 % due to competition from other duty‑free zones and e‑commerce platforms. Luxonomy notes that China’s “top” consumers account for 45 % of luxury sales and this share could increase.

3.2 Europe

Europe experienced moderate growth in 2024, affected by a slowdown in Chinese tourism and inflation. It remains the cultural and artisanal centre of luxury. Countries like France and Italy host the largest fashion conglomerates (LVMH, Hermès, Kering, Prada), and their importance is reflected in the leadership of these companies in stock‑market capitalisation (see section 5). The revival of international tourism and spending by North American and Gulf clients could boost sales from 2025 onwards.

3.3 United States

The U.S. market represents around 21 % of global revenues. Luxury spending contracted for ten consecutive quarters between 2022 and 2024 but shows signs of recovery in late 2024. A quarter of U.S. luxury spending occurred abroad (13 % in 2024 versus 8 % in 2019), especially among the top 5 % of households, whose spending abroad grew 10.5 %. The number of luxury brand followers on social media increased six‑fold since 2015, underscoring the power of digital platforms to attract U.S. consumers.

3.4 Middle East and other emerging markets

The Middle East and India are emerging as the most dynamic markets for 2025‑2027. The growing millionaire population, luxury shopping tourism in cities like Dubai and Doha, and the development of luxury hubs (hotels, malls) are generating strong demand. Africa, Latin America and Southeast Asia still represent a small fraction of the market but offer medium‑term growth opportunities, especially in fashion, beauty and exclusive tourism experiences.

4 Generational dynamics and digitalisation

4.1 Generation participation

Bank of America data shows that Generation X spent the most on luxury in 2024, followed by older millennials and baby boomers. Although young people (Gen Z and young millennials) buy more luxury items online, older customers continue to drive physical sales and hospitality services. In fact, only baby boomers recorded positive growth in luxury goods spending.

The share of older millennials and Gen Z in luxury spending has increased since 2019, while that of other groups has remained flat or declined. In addition, 10 % of young professionals (Gen Z and millennials) say their primary motivation for building wealth is to live a luxurious life.

4.2 “Millennial state of mind” and digital adoption

Millennials are not just a demographic cohort but a “state of mind”: their urgency, desire for personalisation and ethical values are spreading to older generations. By 2025 millennials are expected to account for 40 % of the personal luxury goods market and millennials + Gen Z will make up 45 % of the total. Other findings:

• Digitalisation: 70 % of luxury purchases are influenced by online interactions, underscoring the need to combine digital marketing and in‑store experiences.
• First purchase online: 14 % of 18‑24‑year‑olds make their first luxury purchase online.
• Sales channels: By 2025, Luxonomy expects online sales and mono‑brand stores to each account for ~25 % of the market, with 75 % of purchases still in physical stores.
• Geographic distribution: Luxonomy’s 2016 study anticipated that Asian consumers would continue to represent more than half of the luxury market and that Generations Y and Z together would reach 45 % in 2025.

4.3 Followers and social networks

Luxonomy notes that the number of luxury brand followers on social media increased almost six‑fold between 2015 and 2024. This surge has boosted brand awareness and contributed to younger customers discovering and desiring luxury products through aspirational content and influencer collaborations.

5 Brand and company rankings

5.1 Most valuable brands (2025)

In 2025, the most valuable luxury brand was Porsche, which retained the top spot for the eighth consecutive year with a valuation of US$ 41.1 billion. Chanel rose to second place after increasing its value 45 % to US$ 37.9 billion, surpassing Louis Vuitton. The total value of the top 50 brands reached a record US$ 317 billion. The era of hefty price increases is over and that brands must adapt to the consumer shift towards premium experiences.

5.2 Top luxury groups by market capitalisation (February 2025)

The ten largest public luxury companies by market capitalisation (February 2025) are as follows:

The following graph visualises these data:

The chart highlights the dominance of Hermès and LVMH, whose valuations comfortably exceed those of their competitors. Hermès’s leadership is explained by its profitability growth and strict control over distribution, which preserves scarcity and desire. LVMH, a conglomerate encompassing Louis Vuitton, Dior, Fendi and other maisons, is close behind.

6 Technological and digital trends in luxury

Although luxury is associated with tradition and craftsmanship, emerging technologies are transforming the entire value chain:

• Artificial intelligence and data analytics: AI is used to personalise the customer experience (recommendations on online stores, chatbot service, inventory optimisation). Luxonomy identifies AI – along with agentic AI – as one of the thirteen technological mega‑trends with the greatest business impact and notes that the combination of AI with other technologies (robotics, sustainable energy, biotechnology) unlocks new possibilities.
• Augmented and virtual reality: Fashion houses use virtual fitting rooms and catwalks in the metaverse to appeal to Generation Z. These tools create immersive experiences that expand the brands’ global reach.
• Blockchain and traceability: To combat counterfeiting and improve transparency, brands like Gucci and Prada have adopted blockchain solutions to trace material provenance and verify product authenticity. Digital certificates also facilitate resale and the booming second‑hand market among conscious consumers.
• Sustainability and the circular economy: Consumer and regulatory pressure is driving the adoption of recycled materials, low‑emission production processes and circular strategies. Brands are experimenting with resale and rental platforms, aligning with a young audience that values sustainability as much as status.

7 Conclusions and strategic recommendations

Reorient the value proposition: Moderate growth and regional volatility call for moving away from price increases and returning to creativity, exclusivity and craftsmanship, according to BoF. Brands must clarify their values and prioritise their key clients.

Invest in experiences and hospitality: The shift towards experiences (hotels, dining, wellness) suggests that maisons should expand into high‑end services. Luxury hospitality and dining grew 4 % and 8 % in 2024, respectively.

Accelerate digital transformation: Integrating AI, advanced analytics and augmented reality into customer service will personalise relationships and generate new revenue. The fact that 70 % of luxury purchases is influenced by online interactions makes it imperative to strengthen digital platforms.

Target younger generations without neglecting mature clients: Millennials and Gen Z will represent 45 % of the market in 2025, but Generation X and baby boomers still contribute the bulk of spending. Brands must craft differentiated messages and loyalty programmes for each group.

Diversify geographically: The contraction in China and slow European recovery make it necessary to bet on the Middle East, India and North America, regions with superior growth prospects. The omnichannel strategy must adapt to cultural and regulatory nuances in each market.

Adopt sustainable practices: Demand for transparency and environmental responsibility requires incorporating recycled materials, clean energy and circular business models. This not only reduces reputational risks but also builds loyalty among conscious consumers and opens up resale and rental monetisation avenues.