Abstract: China's domestic luxury market scale continuously declined in recent two years while Chinese consumption for luxuries increased sustainably, which infers a mismatching situation with the coexistence of strong demand and shrinking market. Through literature research, market observation and other channels to collect information, based on summarizing the current situation of domestic luxury market and its causes, this papers further put forward targeted counter measures to reduce the gap between domestic luxury supply and demand from the perspective of macro industry development as well as luxury brand positioning, designing and marketing, which can be propitious to the healthy development of domestic the luxury goods market.