Luxury Market Sees First Decline Since Pandemic

Despite its resilience through the pandemic and reputation as a recession-proof sector, the global luxury industry has recorded a modest 2% decline in brand value in 2025.

This downturn is largely attributed to changing consumer behaviours in China, a historically crucial growth engine for the sector.

Increasing cultural and regulatory scrutiny of conspicuous wealth has nudged affluent Chinese consumers away from overt status symbols, favouring instead immersive lifestyle experiences and more subtle expressions of affluence.

This shift in sentiment underscores broader trends revealed in the 20th edition of Kantar BrandZ’s Most Valuable Global Brands report, the definitive annual ranking that blends consumer sentiment with financial data to assess brand worth.

Since 2006, the combined value of the world’s top 100 brands has soared by $9.3 trillion to reach an unprecedented $10.7 trillion.

Yet, despite this record-breaking milestone, signs of recalibration are emerging across several key sectors, including luxury.

American Brands Dominate – But the Landscape Is Shifting

US brands now account for 82% of total brand value in the Global Top 100, a steep rise from 63% in 2006.

However, the continued ascent of Chinese brands and trade tensions could challenge this supremacy.

Chinese companies now represent 6% of the Top 100's overall value, double their share two decades ago, while European brands have seen their influence wane, falling to just 7% of total value from 26% in 2006.

Even in times of economic uncertainty, the most valuable brands have consistently outperformed key indices such as the S&P 500 and MSCI World, offering compelling evidence of marketing’s pivotal role.

Brands, especially those that command a price premium, are proving to be among a business's most enduring and lucrative assets.

Branding in the Age of Intangible Value

Brands today are not merely built on products or services; they are shaped by consistent experiences and sustained emotional resonance.

The most successful enterprises are those that have elevated their brands into lifestyle signifiers. These brands maintain pricing power, even amid economic headwinds, by cultivating desirability and trust, essential traits in the luxury world.

Disruption continues to be a major driver of brand value. Since 2006, brands that redefined their categories or introduced new paradigms have accounted for 71% of the $9.3 trillion in value created.

In 2025, newcomers such as Stripe and Chipotle join the Top 100 for the first time, alongside long-standing innovators like Aldi, which has featured in the ranking for 15 of the past 20 years.

Global Movers and Regional Triumphs

Beyond the dominance of American tech giants, the latest ranking highlights notable global performances.

Spotify re-enters the Top 100 at 76, reflecting Sweden’s tech credibility. India’s Airtel emerges as the fastest-growing telecom brand globally.

Latin America's sole representative, Mercado Libre, holds its ground, while Spain’s Zara and Canada’s RBC show impressive growth, rising in both rank and value.

At the summit, Apple remains the world's most valuable brand for the fourth consecutive year, now worth an astonishing $1.3 trillion, over 12% of the entire Top 100’s value.

Amazon follows with a 50% increase to $866 billion, bolstered by its relentless focus on convenience and affordability.

Social media platforms Instagram and TikTok also show robust growth, underlining the continued power of digital ecosystems in shaping modern consumer behaviour.

Perhaps most notably, ChatGPT debuts at 60th place, the highest new entry since NVIDIA’s rise in 2021. Its rapid ascent is a testament to the transformative role of generative AI, though competitors like Google and Microsoft are poised to challenge its early lead.

OpenAI, the company behind ChatGPT, will need to continue investing in brand development to maintain its current momentum.

Key Sectoral Trends

• Retail has flourished post-pandemic, with a 48% increase in brand value, as online shopping and private labels provide compelling value in inflationary conditions.
• Apparel (0%), food & beverage (-1%), and personal care (-5%) have plateaued or declined, though standout brands such as Uniqlo, Coca-Cola, and Dove continue to outpace their peers.
• Alcohol (-11%) has been impacted by evolving consumer preferences, particularly among younger demographics embracing wellness and moderation. The proliferation of flavours and niche brews has fragmented the market, eroding share from legacy players.
• Luxury (-2%), once seemingly immune to downturns, now faces a subtle but significant reckoning. As global attitudes toward wealth expression evolve – especially in Asia – luxury brands will need to reimagine their value propositions, balancing exclusivity with authenticity and experiential depth.

In an era marked by digital saturation, economic tension, and shifting cultural norms, brand differentiation alone is no longer enough.

To thrive, brands must be meaningfully different, creating value not just through what they sell, but through the worlds they invite consumers to inhabit.

For luxury in particular, the challenge ahead lies in evolving without eroding mystique.

As experiences eclipse extravagance, the future will belong to brands that can subtly embody prestige while connecting more deeply with evolving aspirations of global high-net-worth audiences.