The luxury market is undergoing significant changes, particularly among younger consumers.

According to a 2024 report by Bain & Co and Italian luxury goods industry association Altagamma, Gen Z’s and millennials’ share of luxury spending declined slightly, with notable regional differences.

In China and Southeast Asia, demand remains strong, with these consumers prioritising product quality, hyper-personalisation and cost-effective options — factors that have boosted the second-hand luxury market. Global luxury spending faces challenges, however, owing to economic uncertainty, geopolitical tensions and financial market volatility, all of which are dampening consumer confidence.

Alongside these shifts in luxury consumption, health and wellness are becoming central to consumer lifestyles. Allan Soo, principal of Allan Soo RE Consultants, notes: “Before, the hobby was drinking or scrolling. Now, it’s pickleball and padel. This trend reflects a broader move towards active living, with healthier food choices, athleisure wear and wellness-focused retail gaining traction.”

Savills Malaysia head of retail services Murli Menon concurs, highlighting the rapid growth of sports such as pickleball and padel, particularly in Malaysia, which now ranks as the third-largest pickleball hub globally. Innovative operators are sustaining this trend by combining sports with dining, entertainment and social engagement, creating a more immersive and long-lasting appeal.

Consumer loyalty is also evolving, with younger shoppers displaying less attachment to traditional luxury brands. Instead, they value peer recommendations, compelling brand narratives and authenticity. This generation is more likely to switch between premium or luxury brands and indie labels, choosing based on mood and occasion, Murli says.

Saleha Yusoff, executive director at Nawawi Tie Leung Property Consultants, says sustainability has emerged as a significant driver of purchasing decisions. Brands, such as LUSH and The Body Shop, have gained strong following by championing ethical sourcing, zero-waste packaging and social advocacy. Meanwhile, larger malls like Sunway Pyramid and IOI City Mall have introduced green building initiatives and an eco-conscious tenant mix to align with environmentally aware shoppers. Equally notable is the shift towards localised offerings. Retailers are increasingly curating product selections and in-store campaigns that reflect the preferences of their surrounding communities. For example, suburban malls, such as Setia City Mall and Aeon Mall Bukit Mertajam, feature local F&B brands and neighbourhood-centric promotions to better engage their catchment populations. In response to these shifting preferences, retailers are experimenting with hybrid formats that blend online and offline experiences, smaller yet more curated store footprints, and placemaking strategies that focus on lifestyle rather than just consumption, she says.

Finally, the demand for fourth spaces — physical venues that bring digital communities into the real world — is rising. Whether through gaming meetups, supper clubs or fitness groups, these spaces cater for consumers seeking meaningful offline connections that align with their online interests. As consumer habits continue to shift, brands and retailers must adapt to these emerging preferences to stay relevant.