Luxury Goods Market

Luxury market consists of nine segments, which is dominated by luxury hospitality, personal luxury goods and luxury cars. These segments collectively account for almost 80% of the entire market. Overall, luxury goods market has shown significant growth in recent years. The growth is attributed to growing income of individuals.  Also, luxury items represent social status. Thus, people tend to buy luxury goods to show off their status. Registering the trend, the luxury goods market is anticipated to show promising growth in the coming years.

In category of luxury goods, jewellery and shoes are among top items contributing nearly 7% of the overall revenue generated. Handbags and beauty products are next in line. At the same time, sale of watch produced average revenue.

Emergence of online stores is driving the sale of luxury items. E-commerce is facilitating easy purchase option of products produced at distant places. This, in turn, has contributed significantly to the growth of global luxury good market. On the other hand, contribution through offline stores has decreased drastically. This is a consequence of competition by online stores. 

Registering the preference and demand for online purchase of luxury products, the luxury goods market is anticipated to grow significantly in the coming years.

Global Luxury Goods Market: Overview

In an era of rapidly changing trends, producers of luxury goods have started to keep a watch on a new class of consumers that is rising these days. High-Earners-Not–Rich-Yet (HENRY) is the new class of consumers is likely to become increasingly relevant in the times to come. In addition to that, luxury goods manufacturers are now making substantial investment to draw the attention of the younger section of the population, who comprise the future consumers of luxury goods. Attempts to trigger interest of younger generation are likely to fuel growth of the global luxury goods market.

These ‘new’ tech savvy generations desire for seamless, individualized brand relationship and are investing in brands across the globe to market products utilizing social and digital media platforms. They are also using the same platform to engage with existing and prospective consumers.

Type, gender, mode of sale, and region are the five key parameters based on which the global luxury goods market has been divided. The objective of such segmentation is to offer a clearer, 360-degree view of the market.

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Global Luxury Goods Market: Notable Developments

One of the developments that offer a glimpse of the market dynamics about the global luxury goods market is mentioned below:

  • In November 2019, Louis Vuitton Moet Hennessy (LVMH) acquired US-based luxury jewelry and specialty retailer Tiffany & Co. The acquisition is one of the largest in the business of luxury retail. Following the acquisition, it is expected that LVMH will be able to expand its reach and diversify its product offerings.

Some well-known organizations in the global luxury goods market include the below-mentioned:

  • The Estée Lauder Companies Inc.
  • Cie Financiere Richemont SA
  • LVMH Moët Hennessy
  • L’Oréal S.A.
  • Kering S.A.
  • Prada S.p.A.

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Global Luxury Goods Market: Key Trends

The following drivers, restraints, and opportunities characterize global luxury goods market over the assessment period, from 2019 to 2027.

Younger Generation Likely to Fuel the Demand for Luxury Goods

The global luxury goods market is expected to be fuelled by the augmented demand for premium cosmetics and beauty products. In addition, the increased uptake of omnichannel retailing is likely to encourage growth of the global luxury goods market further.

In addition, there has been a rise in the disposable income of people together with increased awareness about various skin-related issues. These factors have increased the consumer spending on various high-end skincare products such as Bobbi Brown, Mac, Estee Lauder and so on. Rise in the expanding base of aging population generates demand for premium anti-aging creams. Increased spending on such premium brands is likely to support growth of the global luxury goods market over the tenure of assessment, 2019 to 2027. To cater to the rising demand for such innovative and advanced skincare technologies and products, manufacturers are investing more into research and development activities, which is estimated to boost the demand for luxury goods in the years to come.

Overall, the jewelry and shoes are likely to emerge as leading revenue generating categories, trailed by beauty and handbags. Young consumers are estimated to exert substantial influence on the demand for luxury goods. To make the most of this trend, companies are luxury good producing companies are increasingly recognizing and acknowledging the differences in size and culture. A case in point is modest fashion and clothing worn by Muslim women accounted for a sizeable chunk of the global luxury goods market.

Global Luxury Goods Market: Geographical Analysis

The global luxury goods market is estimated to be dominated by the Chinese consumers due to high demand for luxury goods coupled with augmented purchasing power. Asia Pacific is estimated to emerge as a promising region for the market over the tenure of assessment.

Driven by the presence several luxury goods companies, North America is expected to rise to prominence over the forecast period. Rising disposable income has facilitated the increased overall spending by local Americans.

This intelligence report by TMR is the outcome of intense study and rigorous assessment of various dynamics shaping the growth of the market. TMR nurtures a close-knit team of analysts, strategists, and industry experts who offer clients tools, methodologies, and frameworks to make smarter decisions. Our objective, insights, and actionable analytics provide CXOs and executives to advance their mission-critical priorities with confidence.

The scrutiny of the various forces impacting the dynamics of the market, and key and associated industries, guides enterprises in understanding various consumer propositions. Our clients leverage these insights and perspectives to enhance customer experience in the fast-paced business environment.

All our insights and perspectives are broadly based on 4 Pillars or Stages: ASBC-S, which offer an elaborate and customizable framework for the success of an organization. The essence and the roles of these in organizational successes are highlighted below:

  • Agenda for CXOs: TMR, through the study, sets the tone for agendas that are pertinent to CEOs, CFOs, CIOs, and other CXO executives of businesses operating in the market. The perspectives help our clients to bridge the gap between agenda and action plan. TMR strives to offer guidance to CXOs to undertake mission-critical activities empowered by various business analysis tools, and boost the performance of the organizations. The perspectives guide you to decide on your own marketing mix that align well with the policies, visions, and mission.
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The study presents scrutiny of region-specific consumer and technology trends, including the most recent industry dynamics. These broadly cover but not limited to

  • North America, South America, and the Americas
  • Asia Pacific and Japan
  • Europe
  • Latin America
  • Middle East and Africa

The study offers data-driven insights and guidance of several aspects. Some of the more notable questions are:

  • What are the major recent trends that can influence the product life cycle and the RoI?
  • Which regulatory trends shape corporate-level, business-level, and functional-level strategies?
  • Which micromarketing initiatives of leading players will bring in investments?
  • What can be the best framework and tools for PESTLE analysis?
  • Which regions will witness rise in new opportunities?
  • Which are the game-changing technologies being used to capture new revenue streams in the near future?
  • Which operational and tactical frameworks are being adopted by various players in gaining customer loyalty?
  • What is the current and expected intensity of competition the market in the near future?

Disclaimer: This market research study is an ongoing effort and extreme care has been taken to maintain the highest levels of accuracy at all stages. However, in the light of the rapidly evolving business dynamics, some region-specific or other segment-specific changes may take time to be part of the study.

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Luxury Goods Market