'Luxury shame': China's rich shy away from flaunting their wealth amid economic jitters

China's rich are growing more cautious about flaunting their wealth as the economy faces headwinds, putting the country's luxury market under pressure.

There are emerging signs of so-called "luxury shame" in China, in the face of a challenging macroeconomic environment, sluggish GDP growth and weak consumer confidence — which have hurt consumption among the middle class, according to a June report by consultancy group Bain and Company.

"It's not to say that they are not willing to spend on luxury — actually, on some of the top players, we continue to see very strong performance in China, but it's just some of the aspirational consumption that people are getting more cautious around, and will continue to do so," senior partner at Bain & Company Derek Deng told "Squawk Box Asia" last month.

"Wealthy customers are afraid of being seen as too ostentatious or too showy," Claudia D'Arpizio, partner partner and global head of fashion and luxury at Bain & Company, told CNBC in a separate interview.

To be clear, the term is not new.

"We call it luxury shame similarly [to] what happened in the U.S. in 2008-2009," D'Arpizio said. "Even people that can afford to buy these products have less willingness to do so, [in order] not to be seen as really buying or wearing very expensive products."

Instead, Chinese consumers are increasingly going for the "quiet luxury" style, investment pieces, and luxury goods that are "more subtle" and "less visible," she added.

China is the world's second-largest economy and home to over 98,000 of the world's ultra-high-net-worth individuals — those with a net worth of more than $30 million, second only to the United States.

However, the economy has been under pressure post-Covid, amid expectations of slowing