Adding context to the recent luxury slowdown, a recent survey from Oliver Wyman detailed how Chinese shoppers are shifting their shopping and travel behaviors.

Conducted in May, the study includes feedback from 2,000 affluent Chinese customers with monthly household incomes exceeding 30,000 renminbi, or $4,193.40, which approximates to the top 7 percent of the Chinese population.

According to the Oliver Wyman study, both core and casual luxury shoppers are becoming more cautious in 2025. Twenty-six percent of core luxury shoppers surveyed intend to spend more on luxury, a 2 percent increase compared to 2024, but only 11 percent of casual luxury shoppers surveyed intend to spend more on luxury, a 15 percent drop compared to 2024. The consulting firm identified core luxury shoppers as those who spend more than 40,000 renminbi, or $5,591.20, and casual ones as those who spend below that threshold.

“Core luxury shoppers expect to increase their spending in the second half of 2025, due to travel, while casual ones will continue to hold back. Watches and fine jewelry will likely take the biggest hit among affluent luxury shoppers,” the report explained.

“The core luxury shopper continues to spend, but that’s an increasingly smaller group of customers for brands to focus on; there are actually people dropping out of the category as well, because they are spending on something other than luxury,” explained Imke Wouters, a partner at Oliver Wyman.

Gen Z, a major contributor to luxury spending in 2021, has scaled back as their optimism about future earnings fades.

“Gen Z went straight into the true luxury brands in 2021 — spending a significant part of their income — but they are not getting into luxury anymore, and you see that spending is more concentrated with the Millennial generation again,” Wouters said. When asked about their overall luxury shopping intentions, both domestically and abroad, a net 6 percent of Gen Z respondents said they will reduce their spending.

“When you invest in a big ticket item, like a handbag, you look forward to having an increase in income in the upcoming years, so it’s not going to cost as much with that mindset, but looking into the current economic situation, there’s more uncertainty, so people shift spending to much smaller items. For example, we are seeing a pickup in prestige beauty,” Wouters added.

The survey added that affluent Gen Z in tier-one cities are the heaviest hit by the broader sentiment decline. However, total per capita travel spending for the Gen Z cohort is expected to rise. “[Both] Gen Z and Millennials are significantly more interested in ‘bleisure’ travel, shorter weekend getaways, and staycations,” the report said.

With softer travel demands, Oliver Wyman predicts that overseas luxury spending will stabilize at around 45 percent of travelers’ total spending this year, which, in total, accounts for about 25 percent of China‘s total luxury spending.

Nearby travel destinations such as Malaysia, Japan, South Korea and Singapore will benefit the most from the rebound. Oliver Wyman expects outbound travel to return to 2019 levels by the end of this year.

“Hong Kong is losing ground among affluent travelers in particular, while Japan is the clear winner,” the report said. “Although interest in Thailand still exists, personal safety is still a major concern among Chinese travelers,” the report added.

Domestic travel, which was about 60 percent above pre-COVID-19 levels during the May Day holiday, has yet to fully recover, according to Oliver Wyman.

Top domestic destinations include Beijing, Shanghai, Hainan, Sichuan and Guangdong, according to the survey.