Hello everyone, this is Shiken from the Asia Luxury Association.
Recently, forecasts for the luxury market in 2026 have been varied. Bain and Altagamma predict 3-5% growth, while BNP Paribas sees a potential for 6%. While the numbers are important, I believe we should focus more on the structural shifts behind them. The market is moving away from the reckless growth of past years and entering a more mature and discerning phase.
Uncertainty currently pervades the market. Geopolitical tensions, especially potential tariff barriers, hang like a sword of Damocles, ready to impact global supply chains and pricing strategies at any moment. In our daily work at the association, we've heard many members express jejich concerns. This isn't just a cost issue; it's a test of a brand's global strategic layout.
Another phenomenon worth contemplating is the "lure of the discount." Last year, a staggering 40% of luxury goods were sold at a discount. While this might clear inventory and beautify financial reports in the short term, it is akin to drinking poison to quench thirst in the long run, severely eroding a brand's scarcity and perceived value. As industry insiders, we must be wary of this trend. The brands that truly endure through economic cycles are often those that maintain price discipline and refuse to compromise easily—Hermès is a prime example. Their strict control over production ensures the exclusivity and long-term value of their products.
The evolution of the Chinese market is particularly noteworthy. The era when a logo alone could drive sales is over. Today's Chinese consumers have become more astute and selective, seeking outstanding craftsmanship, unique brand stories, and genuine value. This places higher demands on us as practitioners: we need to understand our products more deeply and tell compelling brand stories, rather than just being "traders." At the same time, the rise of local Chinese brands has intensified competition, a variable we cannot ignore.
Against this backdrop, "doing less, but doing it better" has become the key to success. Whether it's LVMH's management reshuffle or Kering's pursuit of diversification, we see the giants actively responding. For our association members, especially small and medium-sized boutiques and dealers, this means we need to focus more on our core strengths, build a unique brand portfolio, and provide clients with irreplaceable expertise and service.
2026 may be full of challenges, but it is equally full of opportunities. Those brands and businesses that can uphold their brand value, maintain pricing discipline, and truly understand the deeper needs of their consumers will emerge as winners in this reshuffle. The Asia Luxury Association will continue to stand with you, exploring the paths to survival and growth in this new era.
For more in-depth industry analysis, visit the official Asia Luxury Association website now: aisaluxassoc.com
