Five Key Trends in Luxury Goods

Five key trends in Luxury Goods

  • Luxury market remains optimistic with forecast sales set to reach $405 billion USD by 2019.
  • The United States remains the largest luxury goods market in the world, valued at $78 billion USD in 2014.
  • Designer apparel accounted for the most sales of all luxury categories in 2014.
  • Luxury jewelry and timepieces grew by 63% and 42% respectively in the last 5 years.
  • China dropped from 3rd to 4th place in the global rankings, due to the government clampdown on extravagant spending and slowing growth of the economy.

According to a featured story written by Just-Style on the Euromonitor report, global luxury goods sales in 2013 rose 3% year-on-year in value terms and most of this growth came from emerging markets such as China, India, Indonesia and Malaysia. Data shows that luxury spending in the BRIC countries experienced a massive increase of 104% over the last five years, compared to just 18% in developed markets. It is further suggested that BRIC countries will account for more than 35% of projected global sales of luxury goods from 2014-2018. Specifically, India is forecast to grow by a further 86% in constant value terms over the five years to 2018, followed by China at 72%, Brazil at 31% and Russia at 28%.

The outlook for the luxury goods industry over the short to medium term is positive. A rapidly expanding A and B class across sub-Saharan Africa, Latin America and emerging Asia, with incomes 150% to over 200% higher than the average gross incomes of individuals aged 15 and over, is fuelling a new culture of luxury aspiration, leading to an increase in luxury spend.

Source: Euromonitor International; Just-Style

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Study Compares Shopping Habits of Luxury Consumers in New York and Shanghai

An interesting study was recently conducted by ContactLab, a UK based consulting agency, which compared shopping habits of luxury consumers (clothing, shoes and fashion accessories) in New York and Shanghai, the fashion hub of the United States and China respectively.

The study was conducted based on a survey of 922 respondents in New York and 975 respondents in Shanghai aged between 25 and 54 years old. According to the study:

  • the Chinese market, seen from Shanghai, confirms its standing as a market offering enormous opportunities to companies that produce high-end products
  • in the last 12 months four out of five individuals in Shanghai have bought at least one luxury item, spending on average around $1,000 (in New York around $500) on their last purchase
  • one out of three users in New York (35%) as well as in Shanghai (31%) chooses to be kept informed through email communications sent by brands
  • two different consumption profiles emerge: fashion buying in China is closely linked to the display of one’s own spending capacity, while the New York consumers show greater affection for brand

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A separate study released by the Fung Group in late 2013 suggests that foreign players largely dominate China’s luxury apparel market.

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