【South Korea】Why the Rich Are Saying ‘No More Luxury Bags’… The ‘Surprising Result’

An analysis suggests that the core pillars supporting the luxury market are shifting towards experiences, jewelry, and the Middle East.
According to the distribution industry on the 25th, Bain & Company, in a recent report titled ‘2025 Global Luxury Market Research,’ forecasted that global luxury consumption this year will reach 1.44 trillion euros, a level similar to the previous year. While superficially stable, the report’s core diagnosis is that a distinct realignment is underway in consumption patterns, regional growth drivers, and category trends.

First, it is noticeable that consumer interest is clearly shifting towards ‘experiences.’ While luxury consumption saw a temporary surge immediately after the COVID-19 pandemic, travel, hotels, and fine dining have since emerged as new priorities for luxury spending, surpassing traditional categories like leather goods and apparel. Bain described this as a “perceptual shift towards experiences.” The report explains that experiential luxury, such as fine dining, cruises, and safaris, has grown rapidly, particularly in Asia, the Middle East, and resort destinations, supporting the luxury market. The report also emphasized that younger consumer groups are more distinctly driving this transition.

Among categories, jewelry stood out. It is expected to grow by 4-6% this year, the highest growth rate among all luxury segments. Demand remained resilient even in an uncertain consumption environment, driven by overlapping trends of emotional value, durability, and personalized design. In contrast, leather goods have struggled to find direction due to a lack of ‘iconic items,’ while shoes have underperformed relatively due to price sensitivity and competition with sports brands. Eyewear maintained stable growth through digital integration and design diversification. Fragrance showed the most dynamic trend within the beauty category this year, with AI-based personalization driving consumption expansion.

In terms of regional dynamics, the Middle East was evaluated as the strongest market this year, thanks to expanding tourism demand and local high-income consumption centered around Dubai and Abu Dhabi. With the Chinese market contracting by -3 to -5% and Japan and Europe slowing down, the Middle East has effectively become the only ‘steep growth axis’ for the global luxury market. The US saw only a modest increase of 0-2% but maintained stability as domestic recovery trends continued.

The shrinking consumer base was cited as a structural risk factor. The number of global luxury consumers is estimated to have decreased from 400 million in 2022 to approximately 340 million this year. The rate of new customer acquisition also declined.

Bain analyzed, noting that consumer spending is shifting towards value-centric channels like resale, outlets, and smaller products. Additionally, stagnant spending among top-tier consumers was presented as a factor lowering overall market momentum.
Declining profitability is putting greater pressure on the entire luxury industry. The operating profit margin of major brands is expected to be 15-16% this year, a significant drop from 23% in 2012, effectively returning to levels seen right after the 2008 financial crisis. The report also included an analysis that the total enterprise value of the industry decreased by approximately 100 billion euros over the past 12 months. The core problem is explained as the breakdown of the ‘price-value’ balance due to overlapping cost increases and growth slowdown.
Bain forecasts that the luxury market will grow at an average annual rate of 4-6% over the next decade, reaching a maximum size of 625 billion euros for the personal luxury goods market by 2035.

the report assessed, stating that “experiences, jewelry, and the Middle East are the keywords that will determine the direction of this transitional market.”