Some of the prominent names operating in the global luxury goods market are LVMH Group, The Swatch Group Ltd., Tiffany & Co., Kering S.A., Rolex S.A., Revlon Inc., Coty Inc., Graff Diamonds, Prada S.p.A, Compagnie Financière Richemont S.A., Hermes International SCA, Burberry Group plc, Avon Products Inc., and L’Oreal Group. They offer tailor-made products and are increasingly resorting to e-commerce platforms to improve sales. They are also actively involved in mergers and acquisitions to gain control over the supply of raw materials needed for creating exclusive goods and to bring down their manufacturing costs.
In order to stay ahead of competition, the manufacturers and retailers in the market are constantly coming up with unique marketing strategies to purvey their products to a broader customer base. In the U.K., for example, high-end departmental stores, namely Harvey Nichols, Selfridge & Co., Harrods have launched products having the label of “limited edition” and “exclusive” in prestige beauty stores. This brought about swift sales as the tags up the uniqueness quotient of products immediately.
The global market for luxury goods is in a mature stage and is expected to reach a value of US$374.85 mn by 2020, as per a report by Transparency Market Research.
Economic and Political Turbulence to Slow Down Growth in Europe
Based on product types, the key segments of the global luxury goods market are apparels and leather goods, luxury watches and jewelries, fragrances, luxury personal care and cosmetics, wines/champagne and spirits, and others such as tableware, luxury pens, etc. Among them, apparels and leather goods account for a leading share in the market – around 28.0%. Going forward too, the segment is forecasted to hold on to its share. The product segment of luxury watches and jewelries follows in the second position.
Geographically, Europe dominates the global luxury goods market. In the years ahead, however, it will likely trim its share slightly while still holding on to its dominant position due to the turbulence in the economic and political sphere slowing down sales of the high-end products. Another noticeable trend slated to negatively impact the market in Europe is the growing propensity among consumers to spend on experiential luxury rather than show-off goods. According to the TMR report, the market is slated to attain a value of US$117.25 mn in 2020. The Rest of the World and Asia Pacific are the most lucrative markets as they are poised for significant growth in the near future.
Rising Fortunes of People Worldwide to Drive Sales
Fortunes of the global luxury goods market is directly tied to the spending capacity of the consumers. The bettering economic scenario in the advanced economies of the world that took a hit from the 2008 financial meltdown coupled with the rising fortunes of consumers in developing countries with fast-growing economies has been at the forefront of driving growth in the global luxury goods market. Also driving growth in the market is the rising number of high net worth individuals worldwide. The proliferation of stable and speedy internet connection is also leading to swift uptake of luxury goods via online platforms.
High Cost Deters Swift Uptake
The steep price of premium luxury goods poses a roadblock to their swift uptake. Other factors hindering the market’s growth is the depreciating currencies of many importing countries and the rising tariffs in the promising markets of India, China, and Brazil. The difficulty in procuring raw materials required for crafting most of the luxury goods will likely impede progress in the market in the upcoming years.
This review is based on the findings of a TMR report titled “Luxury Goods Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024.”
Global Luxury Goods Market, by type
- Luxury Watches & Jewelry
- Apparels and Leather Goods
- Luxury Personal Care & Cosmetics
- Wines/Champagne and Spirits
- Others (Tableware, Luxury Pens)
Global Luxury Goods Market, by region:
- North America
- Rest of the World
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