Luxury goods market dented by govt policies (2)

However, the sector is likely to rebound next year because gifts have been a major feature and tradition of the country's luxury market for years.

Lannes predicted there will be a paradigm shift, and said future gift items will likely have less conspicuous branding.

The luxury market value on the Chinese mainland is expected to hit 113 billion yuan ($18.07 billion) by the end of the year. Watches are expected to be among the hardest hit categories with a 5 percent drop in market value.

However, Chinese purchases worldwide reached 306 billion yuan with spending abroad rocketing by 31 percent.

More than 60 percent of consumption took place in overseas markets, driven by the depreciation of major foreign currencies, and dynamic overseas travel.

As a result, traditional shopping hotspot Hong Kong is losing out to European and US cities, with its growth rate slowing down to around 10 percent.

"More Chinese shoppers have learned to take advantage of the weaker euro and US dollar. For big-ticket items such as watches and jewelry, you can see as much as a 40 percent pricing gap between the euro and the yuan," Lannes said.