World Market for Luxury Goods

Delivery

This report comes in PPT.

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.