"Following several years of exceptional growth in the Asia-Pacific region, in particular China, sales were flat compared to the comparative figures for the same quarter last year," the group said in a trading update for the third quarter ended Dec 31, 2012.

Bain & Company said that watch and jewelry items, in particular, were hit hard by the slowing economy.

The Federation of the Swiss Watch Industry also reported a dramatic fall in the growth of Swiss watch exports to China in 2012 - they increased just 0.6 percent in 2012, after a 48 percent rise in 2011.

It said that luxury watch sales are unlikely to recover this year either, after recording a 9.9 percent fall in Chinese imports in January compared to last year.

Zhou Ting from the Fortune Center said the Chinese luxury market is not expected to recover for at least the next couple of months.

Government policies to curb excessive use of public funds to purchase luxury items are playing a significant part in dampening confidence in the sector.

Many Chinese luxury consumers, who are not civil servants, are also adopting a wait-and-see attitude on luxury consumption, said Zhou.

The boom times are unlikely to return, she added.

"The fast growth, when increases were well into double-digits in China's luxury market, has gone forever," she said.

Experts now suggest that quality of service has become a priority for many international brands.

In the past, analysts often criticized the luxury end of the market for an almost complacent attitude to customer service.