A gold, diamond-encrusted iPhone gleams in the window at a shopping mall in Hong Kong, its US$25,000 price tag a symbol of the city's luxury excesses fuelled by cash-rich Chinese tourists and wealthy locals.

The custom-built device boasts a rose gold chassis ringed with a combined 7.28 carats in diamonds that also spell out the number "5" on its back, loudly announcing that this is indeed an Apple iPhone 5 -- albeit with a difference.

Despite the gloom in the West and a slowing expansion of China's economy, free-spending Chinese consumers and wealthy Hong Kong locals craving exclusivity have proven a blessing to retailers looking to buck global woes.

From gadgets decked out in jewels to made-to-order men's shoes and ladies leather handbags or Rolls Royce cars with monogrammed seats, Hong Kong continues to benefit from the influx of newly rich mainland Chinese searching for authentic goods and lower sales taxes.

"They don't care about the price," said store manager Cytheia Lui, surrounded by gadgets ranging from shiny gold-plated iPad covers to multi-coloured laptops and headphones.

"For them the attitude is: if you use an iPhone and I use an iPhone too, why should we have the same one?"

Lui said that a mainland Chinese customer placed an HK$800,000 ($103,000) order for 70 custom-made iPhones, which he planned to give away as gifts.

Global luxury brands continue to pin their hopes on China's rising middle class as Europe slogs through its debt crisis, US growth remains weak and Japan's economy fails to gain traction.

Despite weaker-than-expected luxury goods demand in China last year as its new leadership vowed to crack down on corruption and official excess, China is still forecast to be the world's biggest luxury goods market by 2020.

Lower sales taxes and authentic products lure shoppers to Hong Kong's luxury malls.

In Hong Kong, brands such as Italian label Salvatore Ferragamo offer customers a choice of personalised handbags with up to 40 colours made from lizard, python or ostrich skin at premium prices. Swiss watchmaker Rolex offers bespoke dials.

Although conspicuous consumption and big-spending tourist trips are welcomed by businesses, the influx of visitors from the mainland has not been welcomed by all in Hong Kong where locals complain about an extra strain on the crowded city's public services.

High-end shops and boutiques have been seen to help drive the sky-high rents that have forced decades-old shops and restaurants out of business, prompting warnings that the city is selling its identity.

Yet the thirst for luxury remains unquenched.

UK-based luxury craftsman Stuart Hughes, who recently designed the "world's most expensive iPhone" valued at a whopping US$15 million said more than two-thirds of his customers come from mainland China and Hong Kong.

The work was commissioned by a Hong Kong businessman who asked Hughes to incorporate a 26-carat black diamond into the phone.

"The Chinese have got a lot of spending power in terms of buying for themselves or buying as a gift for people.

"They want a nice, different phone. They want extra modifications to make it look unique," said the 42-year-old designer.