Global Luxury Market Re-enters Growth Phase Amid Shifting Consumer Priorities

Valued at around $130 billion, the United States is the world’s largest luxury market and is projected to grow by up to 5 percent annually through 2030, mentioned the report, The State of Fashion: Face to Face With Luxury Clients.

After a prolonged slowdown, the global luxury sector is gradually returning to growth in 2026, led by the United States and China, but overall growth is expected to remain modest, expanding at an annual rate of 4‑6 percent through 2030, as noted by the BoF‑McKinsey report.

Reviving growth will be challenging for many brands, as consumer interest in experiences such as travel is surpassing spending on products, while inflation continues to dampen appetite for fashion.

China’s $60 billion high‑end market is anticipated to recover and outpace other major regions, posting annual growth of up to 6 percent.

Reviving growth will not be easy for many brands. Following the pandemic and the waning of the post‑pandemic spending surge, luxury consumers have realigned their priorities, becoming more discerning about the brands and products they choose.

Growth in experience‑driven spending, such as travel, is outpacing product purchases, and inflation has further reduced enthusiasm for fashion items, including handbags.

Price increases by leading fashion houses during boom periods—often without accompanying product innovation—have alienated consumers across the price spectrum, especially at the aspirational level, the report notes.

As post‑pandemic euphoria fades, many brands have focused on clients least affected by economic headwinds, neglecting lower‑tier customers and failing to provide them with compelling reasons to visit stores. Consequently, these crucial shoppers have turned away in large numbers.

For both the United States and China—where creating desirability has become more challenging—emotional connection has emerged as the primary driver of luxury purchases. As consumers grow more selective, they are drawn to brands that resonate personally and reflect their tastes and values. Heritage and brand history, however, are playing a diminishing role, the report adds.

Clients in China tend to use luxury brands as a means of external expression, whereas U.S. clients are more motivated by self‑reward, gravitating toward brands that align with their personal values.

Across all segments in China, physical stores remain a strong catalyst for client engagement, particularly at the entry level, underscoring the central role of retail in reaching aspirational shoppers.

For U.S. consumers, subpar retail experiences—such as aggressive sales tactics and long queues—are emerging as a major pain point, highlighting a critical area for improvement.

The adoption of artificial intelligence (AI) and resale platforms for luxury shopping is a trend observed in both markets. In the United States, more customers rely on AI for inspiration than in China, where entry‑level shoppers engage with AI throughout the journey, from discovery to purchase decision.

Second‑hand channels are increasingly important, especially for high‑spending clients in the United States, motivating shoppers with the thrill of the hunt as well as the appeal of bargains.

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