Summary of Key Points
In 2026, the global luxury goods market is expected to enter a phase of "normalized low growth" (with annual growth rates of 2%-4%). At the same time, three major structural changes are taking place within the industry:
1. Second-hand prices have become an important reference for consumers when purchasing new luxury items – Nearly half of consumers check second-hand prices before buying a bag.
2. AI tools are reshaping the consumer decision-making process – 50% of consumers use AI to compare products.
3. Sports sponsorship has become a core competitive factor for brands – Over 80% of the market value comes from brands that have engaged in sports sponsorship. These changes are collectively ushering the luxury industry into a new cycle defined by consumers, data, and popular culture.
1. Second-hand Prices as a Mirror: Consumers Use Them to Assess Luxury Value
In the past, when buying luxury goods, consumers mainly considered the brand and style. However, now nearly half of them check second-hand prices and availability for the same product before making a purchase, using the secondary market to verify the true value of the brand.
- Classic designs are less affected; trendy ones face more pressure – According to Bain experts, the high resale prices of classic items (such as LV's old-fashioned bags) indicate their reasonable premium. In contrast, trendy products that become popular quickly may see their values drop rapidly, revealing their lack of durability over time.
- The Chinese second-hand market has unique characteristics – China accounts for nearly half of global luxury consumption, and there is an abundance of second-hand goods. Domestic consumers prefer black and classic colors; colorful items struggle to sell domestically but can fetch higher prices overseas. As a result, many second-hand shops are exporting them through cross-border e-commerce.
- Second-hand prices are not a threat but a signal – For brands, low resale values for trendy products suggest the need to adjust their design or pricing strategies.
2. AI Takes Control of Brand Communication
AI tools are significantly changing how consumers make luxury purchases:
- 50% of consumers use AI to assist in their decisions – They use AI to search for information like "which brand’s bags retain their value best" or "what luxury watches are popular this year," helping them compare products and discover new brands.
- Brands can no longer dominate the narrative unilaterally – Brands used to control consumer perception through advertising and physical stores, but now the decision-making process involves multiple steps (AI filtering, cross-channel verification, etc.), giving consumers more control.
3. Sports as a New Arena for Luxury Brands
Over 80% of luxury market value comes from brands that have sponsored sports events in the past year. Sports are no longer just about adding logos; they have become a crucial medium connecting popular culture with high-end consumption:
- Brands are competing to associate with iconic sporting events – For example, LVMH sponsors the Paris Olympics, incorporating its brands like LV and Dior into Olympic settings. LV has partnered with F1 for 10 years and even named the Monaco Grand Prix. Gucci went a step further by naming an entire F1 team (the "Gucci Racing Alpine F1 Team" for the 2027 season).
- Sports bring emotional value – Sports events create moments of shared excitement that products alone cannot provide. When brands associate with these events, consumers feel a connection (e.g., "I am a fan of the Gucci Racing team").
- Executive mobility reflects this trend – German luxury sports brand Bogner hired former Puma CEO to leverage his experience in the sports industry; executives with sports expertise are highly sought after in the luxury sector.
4. Low Growth as the New Norm
With growth rates slowing to 2%-4%, luxury brands must adapt their strategies:
- Shift from selling products to providing experiences and culture – For instance, using sports sponsorship to convey a brand's cultural identity, rather than simply selling expensive items. The rise in second-hand sales highlights the importance of more timeless, valuable products.
- Comprehensive visibility is key to competition – Brands need to be present in various contexts (sports events, offline experiences, digital recommendations) to retain consumers.
Conclusion
The luxury industry can no longer rely on simply raising prices. Consumers are more rational, rely on technology (AI), and value emotional connections (through sports). Brands must adapt to these changes to thrive in a period of low growth. In short, the focus has shifted from "how expensive something is" to "whether it provides real value and resonates with consumers."