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
18 thoughts on “Five Key Trends in Luxury Goods”
It was very interesting for me to learn that the US is the largest luxury good market in the world. The fact that the market was valued at $78 Billion USD in 2014 is an almost unbelievable number. It was also interesting to see the huge growth in the luxury goods market from BRIC countries, a 104% increase in the past five years. But I was also thinking this figure isn’t a very good representation of the overall luxury goods market in BRIC countries. In these countries there is often a huge gap between the rich and the poor. The growth in luxury goods must be coming from the extremely wealthy in those countries, not the entire country overall.
Even with the bad economy both here and in Europe, I was very surprised to see that the US remains at the top of the luxury goods market. It was also interesting to read that BRIC countries are a huge contribution to this market. I never thought India has such a large luxury goods market! I’ve been noticing that more and more luxury brands are opening stores in BRIC countries and more Asian countries that maybe even 20 years ago, would never have even been considered. Like the comment above, I do think this is related to the increase in people who are extremely wealthy and can afford luxury goods. There is a growing separation between the mega rich and the poor which I also think this data represents as well. It is good to see the luxury market is not slowing down, but it also brings my attention to the divide between the rich and the poor.
I wasn’t that surprised to learn that the US remains the largest luxury goods market in the world or that designer apparel accounted for the most sales of all luxury categories in 2014. However, I was surprised to learn that China dropped to 4th place in the global rankings because of the slowing growth of the economy. I was also surprised to learn that BRIC countries are a huge contribution to the luxury goods market since they are still developing countries but now more than ever before expansion seems to be happening where luxury brands are opening stores in these BRIC countries and doing well with it. I think it is good that the luxury market seems to be expanding, remaining optimistic for the future luxury goods market.
I wasn’t surprised to read that the United States had the largest luxury goods market in the world. American’s love to buy luxury good especially those who are wealthy. They want the most expensive and fancy products. There is a clear line dividing the wealthy and the poor because the poor cannot afford these goods. I was not surprised China fell to 4th because China produces a lot of knockoff luxury goods and when people can’t afford the real ones they buy the knockoffs. I was surprise that BRIC countries are a large contributor to the luxury goods market. This was shocking because they are developing countries, who you would think would be unable to maintain a steady profit off of these expensive products.
US being the leading industry in the market doesn’t really surprise me due to the fact that the United states is a consumer based market. I was however somewhat surprised to the fact that India wasn’t already high up in luxury goods because of their cultural dress being submerged in jewelry. China dropping in ranks doesn’t seem to affect me. After reading the State of Industry Address of the AAFA, they stated that china shouldn’t be the main form of sourcing anymore and that new opportunities are arising. This leads me to agree that China should be starting its descend in the ranks because of less market value companies are starting to see.
From what we have talked about in our class and this study it is clear to me how The United States remains the largest luxury goods market in the world. We have heard a lot about how other countries have began to take over most aspects of the Textile & Apparel industry when it comes to producing. However The United States has always been known for creating high quality goods. It is interesting to hear that the luxury goods industry is said to increase in a positive way when looked at over the short to medium term. It is hard to decipher whether the industry will continue to succeed in the long term because of economic changes that could take place. I was surprised to read that countries like sub-Saharan Africa, Asia, and Latin America having rising A and B classes. Most of the time we are used to hearing about the low classes in these countries instead. China has dropped to 4th place in the global rankings, which I was surprised to discover.
I found this very interesting because it showed how Americans growth continued while developing countries likes China fell behind. It said that designer apparel accounted for the most sales of all luxury categories in 2014. This is shocking due to the fact that unemployment rate is higher than ever. How people able to afford such nice things so often? What also surprised me was the fact that China a developing country who’s recourses are constantly developing dropped from 3rd to 4th place in global rankings. This was due to the fact that the Chinese government has clamped down on extravagant spending and the slowing economic growth in the country.
I truly wasn’t very surprised to see that the US has the largest luxury goods market. Even if America is not the richest country, Americans spend a lot more money than residents of other countries. We live in a materialistic, high consumer society, and everyone contributes to this not only wealthy people. But then we have the wealthy, also known as “the 1%” who spend an exorbitant amount of money. However, I was surprised to see that the BRIC countries are large contributors to this market.
I found it very interesting that how China fell behind America in the purchase of luxury goods. I completely agree that we are a very materialistic society that not only the wealthy contribute to. I recently read an article for TMD 452, that states the Chinese accounted for 29% of luxury good purchases in 2013. (http://www.economist.com/news/briefing/21595019-market-growing-furiously-getting-tougher-foreign-firms-doing-it-their-way) It is very fascinating to see that the BRIC countries are now contributing to the luxury good market, especially when considering where they are economically.
This was interesting to read about because I would not expect the United states to be the largest luxury goods market in the world. With other countries moving down in the ranking I think that the US will remain at the top of the list with its ever-changing markets and designers. I wonder though if the US is the highest market for Luxury goods because of the massive amounts of foreign visitors that come year round. or that americans are spending top dollar for top goods in recent years.
I thought this was very interesting because with the economy in the position it is now, many including myself, think that the luxury goods market would be down. I learned a lot about the luxury goods industry. I was surprised to learn that this industry is forecasting $405 billion dollars in sales between now and 2019. I was also surprised to learn that the US is the largest luxury goods market in the world. If I had to guess, I would not say the US was the largest. Furthermore, the statistics about the increase of sales globally were very interesting because some rose over 100% in just five years.
I found this article to be very interesting. I personally was not aware of how much of an increase there has been in the luxury goods market in developing countries. I was not at all surprised that the US was the leader in luxury goods. There is a lot of competition in the US consumer market. Our economy is heavily based on a consumer’s disposable income and their spending. It will be quite interesting to see a growth of luxury goods in developing countries, and how that will affect the US. I think that since the US is already the leading market for luxury goods, it will be interesting for them to have some competition in developing countries. This is definitely a new thought for me, because luxury goods never really seem to be put into the same sentence with developing markets. However, this might pose a threat to the US or maybe will end up bettering the global market. We shall see.
This article is very interesting because the statistics reflects the economies of these growing luxury goods markets. I say this because data shows that luxury spending in the BRIC countries have experienced a huge increase of 104% over the last five years, compared to just 18% in developed markets. This example proves that BRIC countries and other developing countries are spending more on luxury goods because their economies overall are growing, moving further towards becoming developed countries. Consumers in these areas now have the money to spend more lavishly than ever before. Despite the United States remaining the largest luxury goods market in the world, other countries such as China, India, Indonesia and Malaysia are catching up.
through some of the videos we have watched in class we have been able to see how the growing middle class in China lives. China and India and other countries have been expanding their major cities as an investment in tourism, therefore building contracts have been some of the main sources of wealth created in those countries. This is good news for the US and other countries because we will be able to export high end good to China now instead of only importing.
After watching this video, I was surprised to find that the US is the largest luxury good market in the world. However, after thinking about it, the US is a consumer based market which puts things into perspective. We are a materialistic society and tend to spend more on “things” than others do. I found it interesting that the BRIC countries are the largest contributors to this market. I thought China would have a large influence, but instead found that they dropped to fourth in the global ranking. I would like to see how long these trends last in the long run with economic changes always occurring.
I am surprised to find the the U.S. is leading in luxury goods. I would have thought this would be the U.K. It also does not make sense to me when it says that China’s growth rate is slowing, but then states the luxury good market’s percentage increase projected is so large.
Luxury goods in general are a interesting topic because of the negative air they can have as they could represent the growing gap between wealth and poverty and many countries–developed and developing. It is a market that create a lot of revenue though, and especially in America, where jobs can be made to design and engineer them.
I found this video very interesting, especially the last comment. It said that China has dropped to the 3rd or 4th spot in luxury goods sales. I honestly was surprised to see that the United States is leading, but when I think about the number of cities we have in America that has a large market for luxury stores and brands, I am not as surprised. The comment that got me the most was that China has fallen because of restraints on extreme spending. Would that be the similar case for the United States if the same rules were implemented? I have a hard time believing that that would ever happen in the United States, but I think China and the United States would be closer in competition.
China’s luxury market is poised to recover this year, with sales expected to reach $76 billion, making it the world’s second-largest luxury market. With the taste of ascension and gradually master the consumption ability, now that the average age of the luxury consumption crowd has from 48 to 34 years old, in luxury consumption under the trend of getting younger, purchase behavior also has changed significantly. This has also prompted luxury brands to shift their thinking to new ways of marketing to cater to fickle tastes, such as the importance of environmental protection and provenance.