Bain & Company’s latest Luxury Goods Worldwide Market Study, released in partnership with Altagamma, reports another year of resilience for the global luxury industry, with the Middle East once again emerging as the world’s strongest-performing region. The study forecasts that luxury spending in the Middle East will grow between 4% and 6% in 2025, driven by continued strength in tourism in Dubai and Abu Dhabi and steady domestic demand in Saudi Arabia.
Globally, luxury spending is expected to hold firm at €1.44 trillion in 2025 despite persistent macroeconomic and geopolitical pressures. The report highlights a continued shift toward “experiential indulgence” — categories such as hospitality, cruises, fine dining and wellness — which are expanding faster than traditional luxury goods.
The personal luxury goods segment is projected to remain broadly flat at €358 billion in 2025, reflecting a maturing market. Demand from ultra-wealthy consumers remains stable, but aspirational shoppers are pulling back. Within the category, jewelry is expected to lead growth with an increase of 4% to 6%, while eyewear stays strong and fragrances continue to be the most dynamic segment in beauty.
Accessible luxury is showing signs of recovery, helped by value-driven Gen Z shoppers and consumers trading down while reconnecting with established heritage brands. At the same time, the global retail footprint is continuing to contract: mono-brand stores shrank by 25,000 square meters over the past six months, US department store space has fallen by 10% since 2024, and outlet retail is outperforming as customers search for better value.
The geographic picture remains uneven. Mainland China is expected to contract by 3% to 5% in 2025, while Europe is set to soften with a decline of 1% to 3%. The Americas are projected to remain broadly stable. Emerging luxury markets — including the Middle East, Latin America, Southeast Asia, India and Africa — now collectively represent around €45 billion, roughly equivalent to the size of the mainland China market.
The report notes that the global luxury consumer base is shrinking, falling from 400 million people in 2022 to an estimated 340 million in 2025, with fewer active shoppers and reduced purchase frequency. Profitability is also under pressure: sector EBIT margins are expected to slide to 15–16% in 2025, a level last seen in 2009, down from previous highs of around 23%.
Despite these challenges, Bain maintains a positive long-term outlook. Personal luxury goods are forecast to grow by 4% to 6% annually through 2035, reaching between €525 billion and €625 billion.
