Luxury goods sales to exceed $318 billion in 2013 - Euromonitor
09/10/2013
Driven mainly by emerging economies, overall retail sales are forecast to exceed $318 billion worldwide – a 3% rise on last year.
The majority of this growth comes from emerging markets such as China, India, Indonesia and Malaysia.
By 2018 the United States, with a projected 34 million high-income earners, will continue to lead the luxury goods industry, although India, Malaysia, Indonesia, Mexico and Brazil are expected to offer the greatest opportunities for businesses and brands offering luxury goods and services.
"According to our latest research, luxury spending in the BRIC countries experienced a massive increase of 104% over the last five years, compared to just 18% in developed markets," said Fflur Roberts, global head of luxury goods research at Euromonitor.
"Luxury spending in China is rising steeply despite a government clampdown on extravagant consumption. At the same time, a weaker yen is bolstering Japan's penchant for premium brands and affordable luxury is still breaking new ground in Western Europe and North America."
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," she added.
India is forecast to grow by 86% in constant value terms over the five years to 2018, followed by China at 72%, Brazil at 31% and Russia at 28%.
Overtaking France in 2012, China became the third largest market in the global luxury goods rankings. While in 2013, China accounts for only 7% of global luxury goods consumption, its share is expected to increase further. China is forecast to account for the highest overall value sales increase over the next five years of over $17 billion. This will equate to 26% of the total global contribution.
In 2012, Mexico overtook Brazil as Latin America's biggest luxury goods market. With a total GDP of $1.2 trillion in 2012, Mexico is the world's fifth largest emerging market economy behind the BRIC countries - Brazil, Russia, India and China - and the second largest in Latin America.
Mexico's real GDP growth is also expected to be faster than Brazil's, growing between 3-4% in the short to medium term. "How fast Mexico's economy continues to grow will depend on the implementation of key structural reforms, but there is a rising economic confidence across Mexico's luxury goods industry that will be hard to derail," added Ms Roberts. "Luxury goods players are looking at Mexico from a completely different standpoint compared to five years ago, with many brands having opened new stores in the last year."
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