World Market for Luxury Goods

August 2024

The global luxury goods industry continues to recover; however, luxury brands are beginning to feel the strain of sluggish global growth. Caution and uncertainty reign across the landscape amid these volatile conditions, and the industry will continue to be shaped by a complex interplay of converging factors, including rising demand from emerging markets, new technology, weak economic growth, geopolitical instability, climate change, a reset of globalisation and changing consumer preferences.

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Key findings

Luxury continues to grapple with persistent pressure on discretionary spending and macroeconomic factors

The global luxury goods industry has continued its road to recovery, with 4% year-on-year growth in 2024, driven mainly by Asia Pacific and the US; however, luxury brands are beginning to feel the strain of sluggish global growth and high inflation, alongside the rising cost of capital, tight labour markets, geopolitical risks, climate change and a reset of globalisation.

Emerging markets come under focus as global trade faces increased pressure from deglobalisation

Emerging markets are becoming key targets for industry expansion, due to growing populations and increasing wealth. Luxury brands are focusing on these regions to reach new consumers, adapt to diverse cultural preferences, and capitalise on significant growth potential in regions like Latin America, the Middle East and Asia Pacific.

Shifting consumer mindsets benefit brands that prioritise the wellbeing of individuals and the planet

Shifts in consumer attitudes have led more luxury shoppers to favour brands that prioritise the wellbeing of individuals and the planet. Increasingly, consumers are gravitating towards brands that align with their personal beliefs and place value beyond mere profitability. This trend is crucial for appealing to high-income consumers and mitigating potential reputational risks,

The “lifestyle” category leveraged to enrich customer experience and foster brand engagement

Wealthy consumers are increasingly regarding luxury goods as long-term investments in themselves, prioritising the pursuit of richer and more authentic experiences for a fuller life. This is giving further opportunity for luxury brands to step into this area by venturing into branded cafés, restaurants, food and wine pop-ups, as well as luxury hotels, spas and wellness.

Generative AI disrupts the entire luxury landscape making significant contributions

As more consumers adopt Gen AI applications, luxury businesses will find more use cases to optimise design processes and enhance creativity. Gen AI also has the potential to reshape the industry towards a more sustainable future, from creating virtual prototypes to predicting consumer preferences and fostering innovation throughout the entire value chain.

 

Our expert’s view of luxury goods in 2024
Scope
Snapshot of global luxury goods in 2024
Key findings
Caution and uncertainty reign across the luxury landscape amid volatile market conditions
Top five trends in luxury goods
Top five trends in luxury goods
Drivers of consumer markets and impact on luxury goods
Exploring adjacent industries in the luxury goods sector
Luxury continues to show resilience whilst bracing itself for sluggish global economic growth
Uncertainty prevails across the industry due to economic, geopolitical and climate factors
Hong Kong retains its status as the market with the highest per capita expenditure on luxury
Asia Pacific remains the largest region and future growth engine for luxury goods
Asia Pacific will account for close to half of global luxury goods consumption by 2030
Seismic global shifts towards experiential luxury, personal growth and authentic connections
Impact of low economic global growth on luxury should be offset by robust wealth expansion
Luxury retailers and brands continue to explore the role of their bricks-and-mortar stores
The shift from single channel to multichannel to omnichannel continues to accelerate
Further evolution and new business models in luxury retail to drive more online engagement
Two-pronged approach to capture domestic shoppers and align with new travel behaviours
High-stakes for the Paris Olympics and a rare opportunity to prove luxury’s worth
The small but mighty wealth segment get more focus than ever in face of global uncertainty
India retains title as second largest population of wealthy and affluent individuals
Emerging regions continue to stand out as leading future wealth-gain markets
The middle class and their discretionary spending still hugely important for luxury brands
Leading luxury players prove their resilience amid economic headwinds and fear of recession
Market concentration intensifies as key players look to gain a competitive edge
Diversification, supply chain efficiencies and risk management drive M&A activity
Personal luxury and car manufacturers among the fastest growing luxury companies
LVMH half-year results suggest more uncertainty to come for short term outlook
SWOT analysis
Opportunities for growth
Definitions (1/2)
Definitions (2/2)

Luxury Goods

This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.

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