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Luxury goods are the products that aren't essential but are very much desired and often associated with High-Net-worth Individuals (HNWI) and Ultra High Net-worth Individuals (UHNWI). Luxury goods are not necessary but are yet coveted in a certain culture or society. According to Canal Suisse, there were around 62.5 million millionaires by the end of 2021, 5.2 million more than the previous year.
| Base Year | 2021 |
|---|---|
| Forecast Year | 2028 |
| CAGR | 5.63% |
| Base Year Market Size (2021) | 248.73 Billion |
| Forecast Year Market Size (2028) | 385.20 Billion |
The Luxury Goods market showcased growth at a CAGR of 1.62% during 2018-2021. The market was valued at USD 248.73 Billion in 2021 which is expected to reach USD 385.20 Billion in 2028. The primary drivers propelling the luxury goods sector are the increasing number of influencer marketing and the widespread use of social media marketing. Further, the market growth is propelled by authenticity, prestige, and exclusivity. Luxury brands such as Hermes and Birkin are considered an investment due to their high resale value and limited availability
The Global Luxury Goods Market is expected to grow in the forecast period 2028 at a CAGR of 5.63% during the forecast period. Significant growth in disposable income and the rise of young billionaires are expected to boost the demand for luxury goods across different regions. Additionally, increasing the per capita income of women around the major regions is expected to boost the market growth in the forecast period.
Luxury Footwear has evolved into one of the most sought-after commodities in the luxury goods market. Footwear’s utilization, visibility, and celebrity collaborations have contributed to its outstanding growth and widespread desirability, especially among the younger generation who are highly influenced by social media presence and endorsements of brands such as Nike (Air Jordans), Christian Louboutin, and Balenciaga.
Amplifying Tourism is backing the growth in Luxury Goods Market
Increasingly, the discrepancy in costs for luxury items throughout the world and the tax-free shopping that visitors enjoy is driving demand for these products. President of Altagamma and newly elected head of ECCIA (European Cultural and Creative Industries Alliance) Matteo Lunelli claims that the area receives between 130 and 170 billion euros annually from high-end and luxury tourists. Luxury Fashion Index reports that a Louis Vuitton Speedy 25 bag can be purchased in Denmark for the lowest price anywhere in the globe.
Foreign visitors, especially Americans, accounted for 23% of tax-free purchases in France in 2022 and spent an average of €1515 for each transaction.
Moreover, Chinese consumers are the leading consumers in terms of both purchasing volume and growth rate and spend three times more when traveling abroad, thus, creating ample opportunities in favor of the luxury goods market.
Counterfeit Luxury Products present challenges for the Luxury Goods Market
Counterfeit luxury goods sold in the market under the name of luxury brands impede the expansion of the luxury goods sector. The availability of counterfeit products has enabled a broader set of consumers to purchase luxury brands, which is likely to devalue the ownership of authentic luxury brands due to the low cost of counterfeit products.
As the sector undergoes a digital transition, counterfeiters are able to operate very efficiently online by copying a company's designs and trademarks, as well as by interspersing their counterfeit items with online product reviews. Because while customers are unable to distinguish between authentic and counterfeit products, inferior quality can significantly reduce brand loyalty and market growth.
Annually, leading luxury brand companies to pay millions of dollars to combat counterfeiting. LVMH alone employs at least 60 attorneys and spends $17 million annually on legal action against counterfeiting.
Luxury Clothing and Footwear accounted for USD 89.28 Million in 2021
Luxury clothing is very prominent in the market due to its high utility and ever-changing fashion trends that keep influencing customers to purchase new collections.
The Millennial and Gen Z population is accustomed to streetwear and athleisure trends, as they are gravitating towards comfortable apparel. Additionally, high growth in the segment is observed in China and the United States, where demand for luxury clothing and footwear hiked post-pandemic.
Branded Stores contribute the maximum share of the Luxury Goods Market
The preference of consumers to buy luxury goods from exclusive retailers/corporate stores is a key driver in this market segment's expansion. These branded stores give customers a customized experience and make it simple for them to personally analyze the goods' quality and authenticity. An increasing number of branded store outlets across different regions has amplified the accessibility of luxury goods to a wide array of populations. Moreover, the branded stores provide a luxury shopping experience that the customers cherish and lead to shopping multiple times.
According to Azoth Analytics Estimates, Europe accounts for the largest revenue share in 2022. Europe is home to some of the largest brands in the Luxury Goods Industry. Additionally, on account of the comparatively lower pricing and a vast collection of new launches, and an array of luxury boutiques, Europe captures a substantial revenue share in the Global Luxury Goods Market. Clothing and Footwear is the key segment in the Europe Luxury Goods Market. The booming fashion industry of the region drives demand for luxury clothing and footwear segment. Additionally, Europe hosts several Film festivals and fashion shows which in turn is leading to Europe becoming a key market for Luxury Clothing and Footwear.
Global Luxury Goods Market is fragmented with the top 5 companies accounting for a significant revenue share in the year 2022. Leading companies and brands in the market are executing different strategies and partnerships to strengthen their foothold and increase their competitiveness and product offerings in the market.
LVMH, Kering SA, PVH Corp., and Richemont, among others, are the leading companies in the Global Luxury Goods Market.
Leading companies in the Global Luxury Goods Market include:
LVMH
Kering S.A
Richemont S.A
The Estée Lauder Companies Inc.
L’Oréal SA
Chanel
EssilorLuxottica
PVH Corp.
Hermes International SA
Chow Tai Fook Jewelry Group Limited
By Product Type
By Sales Channel
By Gender
By Region
1. What is the expected market value of the Luxury Goods Market in 2028?
Ans: The global Luxury Goods Market is expected to be valued at USD 385.20 Billion in 2028.
2. At what growth rate is Luxury Goods Market expected to grow in the forecast period?
Ans: During 2023-2028, Luxury Goods Market is expected to grow at a CAGR of 5.63%.
3. Which Region dominates the Luxury Goods Market?
Ans: Europe contributes the largest revenue share in the Luxury Goods Market and is expected to continue in the forecast period as well.
4. Which are the leading companies in the Luxury Goods Market?
Ans: The leading companies in Luxury Goods Market are LVMH Moët Hennessy-Louis Vuitton SE, Kering SA, Richemont, PVH Corp., Hermès International SCA, Chanel Ltd., EssilorLuxottica SA, Chow Tai Fook Jewelry Group Limited, The Estée Lauder Companies Inc., L’Oréal SA.
5. At what rate will China's Luxury Goods Market Grow?
Ans: During 2023-2028, China's Luxury Goods Market is expected to grow at a CAGR of 7.71%
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