Growth in the luxury goods market in China's mainland has slowed from seven percent in 2012 to around two percent in 2013, with expectations of similarly slow growth in 2014.

Chinese shoppers now do two-thirds of their luxury shopping abroad, triggering domestic slowdowns in store traffic and store openings. Chinese remain the biggest consumers of luxury products worldwide, with purchases that make up 29 percent of the global market, a four percentage point increase versus last year according to Bain & Company's report.

Over the past few years, despite the worldwide financial crisis and debt crisis China's domestic luxury market has remained exuberant. What is changing?

The highly visible government campaign encouraging frugality and focusing on corruption had a visible impact on gifting, which had been one of the major growth engines of the sector. This campaign especially constrained the growth of luxury watches and men's accessories.

Watches make up over one fifth of the total domestic luxury market, and sales declined by 11 percent in 2013. In addition, menswear shifted from being a growth category in prior years to a slightly declining category in 2013, also affected by the reduction of gifting.

Finally, the cosmetics, perfume, and personal care category, a mainstay of China's domestic market that generates over one quarter of sales, is down from 15 percent growth last year to around 10 percent this year.

The importance of Greater China for luxury goods brands is obvious in the data provided by French Ministry Paribas Securities. Greater China contributed 25% of the sales of LV, 35% of Cartier and up to 45 % of OMEGA products. However, unlike previous years, China is no longer the only engine of the global luxury market.

Angela Ahrendts, the CEO of British luxury goods company Burberry, said in an interview with L'Echo: “China's luxur" goods sales decline may not be a 'blip', but perhaps represents a long-term trend." India, Latin America and Indonesia are commonly seen as the next new growth engines, shifting from east to west and south.

"China's luxury market has quickly changed from land-grab to steady focus on consumer experience and 'like for like' sales," says Bruno Lannes, a Bain partner in Greater China and lead author of the Chinese edition of the report.