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.
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.
One of the developments that offer a glimpse of the market dynamics about the global luxury goods market is mentioned below:
The following drivers, restraints, and opportunities characterize global luxury goods market over the assessment period, from 2019 to 2027.
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.
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.