China is now one of the world's most sophisticated consumer markets, heavily skewed toward expensive goods, the publication said.

"Local property barons are now building half the world's new shopping malls in China, many of them in smaller cities, because even punters without big incomes are becoming big shoppers," it added.

For luxury brands, China has been a natural magnet over the last decade or more, especially as home markets in Europe and North America haemorrhaged in the wake of the global financial crisis.

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But the 20 to 30 percent growth many of the brands enjoyed has fallen significantly in the last couple of years, however.

Bruno Lannes, a partner with management consulting firm Bain & Co, says he expects China's luxury market to grow at around 2 percent this year.

"(And that is) much the same as last year," Lannes told China Daily, who is also Bain & Co's head of consumer goods and retail practice in Greater China.

He says growth last year was around 2 percent compared with 7 percent in 2012.

"The government's policy on frugality and anti-gifting has impacted on the sector, especially watches and menswear," he says.

Another factor is the growing number of Chinese who are now buying many of their luxury goods overseas. China's tax and tariff policy makes most luxury brands more expensive.

Bloomberg recently said, "Many of these travelers buy Western or designer goods abroad because import duties and other taxes add up to 60 percent of their prices in China, compared with cities like London, Paris or Hong Kong."

Lannes says overseas purchases by Chinese last year grew by 67 percent.

According to Bain & Co's latest survey on China's luxury market, Chinese travelers now account for 29 percent of global luxury spending. "Chinese consumers, especially women, are becoming more sophisticated and informed about brands," Lannes says.

Nick Debnam, Asia-Pacific chairman for consumer markets with KPMG China, says China is experiencing a slowdown in the luxury market but is not going backwards or in decline. "True, you are not seeing the 20 to 30 percent annual growth rates in luxury sales you saw a few years back."

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