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- Global luxury goods sales growth will slow in 2024, per a new Bain & Company report.
- The report cited China's economic uncertainties and rising outbound tourism as key factors.
- "Luxury shaming" and price hikes without innovation could also contribute to sluggish sales growth.
The spike in the global sales of luxury goods could be coming to an end in 2024, and "luxury shaming" could be in part to blame.
A report published on June 18 by Bain & Company forecast that worldwide sales of personal luxury goods — which include high-end clothing, shoes, handbags, and beauty products — would grow at the slowest rate since 2020, when sales plummeted due to pandemic-related factors.
If Bain's forecast pans out, it could be due in part to a slowdown in China. The report cited two factors in particular that are holding back sales in the Chinese market: "the revival of outbound tourism" and "weakening local demand caused by rising economic uncertainties."
As pandemic conditions have eased, more wealthy Chinese citizens have begun traveling internationally — allocating money to travel that they might otherwise have spent on luxury goods.
Additionally, economic uncertainty in China has brought about a phenomenon called "luxury shame" or "luxury shaming." With some Chinese citizens experiencing financial challenges, some higher-income people have been hesitant to flaunt their wealth with luxury goods. Bain said this phenomenon played out in the US during the Great Recession — and has impacted sales in China.
Bain partner Claudia D'Arpizio told The Associated Press that in addition to macroeconomic factors, luxury goods companies may also be to blame for the slowdown in sales.
She said some luxury goods companies have raised prices but not justified these hikes with sufficient innovation, leaving some consumers "upset and puzzled."