Top twenty percent of world’s rich control over 95 percent of total global wealth and much of the population in emerging economies, mostly from BRICS countries, are moving from middle class to upper middle class or from being proletariat to middle class. Regardless, global disposable income has increased exponentially during past decades because of flourishing global economies. This has led to an increase in spending on luxury lifestyle goods.
Factors like rapid urbanization and industrialization in first half of twentieth century has led to the increase in inheritance, which also led to a rise in disposable income, for millennials who are a major demographic purchasing luxury goods. Above mentioned factors couple with other reasons like product quality are driving luxury segment. On flipside, value added taxes imposed on these products by governments and low penetration scope for new players are restraining the market. As for opportunities, BRICS countries – especially China, Russia and India - look propitious.
Asia currently leads the market in this segment - followed by North America and Western Europe - because of better economies, higher per-capita and improved standard of living. Asia Pacific region is estimated to grow rapidly in next few years on back of Chinese and Indian economic development. Chinese spending on luxury goods exceeded combined spending of their North American and Western European counterparts.
A cogent explanation for this trend lies in perception of luxury goods in different demographics. For example, Italians and French see it as a cultural aspect, Germans and Spaniards evaluate luxury predominantly with quality but in countries like Russia, China, Brazil and India luxury is defined as a concept of affluence, reputation and group orientation. Upper middle class in these developing countries feel that usage of luxury goods reflects their emergence from working class.
This report comprehensively analyzes the luxury-goods market by segmenting it based on geography and type (crystals, precious metals, apparels, fashion accessories etc.). Estimates in each segment are provided for the next six years. Key drivers and restraints that are effecting the growth of this market were discussed in detail. The study also elucidates on competitive landscape and key market players.
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