The global luxury goods market is projected to grow with a CAGR of 2.92% during 2019-2025
NEW YORK, Jan. 14, 2020 /PRNewswire/ --
The global luxury goods market was sized near USD 324.
59 billion in 2018. The global luxury goods market is projected to grow with a CAGR of 2.92% during 2019-2025. Luxury goods are products that are not essential but are highly desired and associated with wealthy or affluent people. The global luxury goods market is growing due to the rising number of high net worth individuals (HNIs) in every nation, and increasing disposable income among the aspiring upper-middle-class population.
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Rise in the number of high nets worth individuals' and changing lifestyles. The number of high net worth individuals is increasing in the USA, China, UK, Hong Kong, and some other emerging economies. Economic prosperity in emerging economies in Asia, Latin America, the Middle East, and Africa reflect the rise in high net worth individuals as well. Moreover, Tourism drives the sales of luxury goods. Traveler's account for one-third of global sales of luxury goods. Tourists tend to buy luxury goods from abroad. There is prestige attached to buying luxury goods from fashionable cities such as London, New York, Los Angeles, Milan, Paris, Dubai and Singapore among others. In Europe, tourists account for a significant percentage of sales of luxury goods.
However, rising counterfeiting affects sales and brand value. Counterfeiting affects the global luxury goods market in a big way. Luxury brands incurred loss worth nearly 30 billion due to online sales. Counterfeiting affects the brand value of luxury goods manufacturers. Fake websites similar to the branded ones draw unsuspecting consumers who look to buy branded luxury goods online are expected to hinder the growth of the global luxury goods market.
Nonetheless, earlier luxury brand manufacturing companies were resistant to selling online, fearful that the internet's mass access would damage luxury brands' exclusivity. Ease of availability of luxury goods through E-commerce. Growing digitalization, the luxury goods companies are developing their own platforms to sell their products online. For this, these companies are either collaborating with multi-brand sites or developing their own platforms or both are expected to create a new opportunity for the global luxury goods market over the forecast period.
On the basis of region luxury goods market categorized into North America, Latin America, the Middle East, and Africa, Europe, and the Asia Pacific. Luxury goods saw a slightly slower growth rate in 2018 when compared with the review period CAGR in Italy, as value sales in the review period were favored by the effect of the 2015 Expo in Milan. Although still steady in 2018, international retail expenditure on luxury goods showed lower growth compared with 2017, as Italy faced higher competition as a destination for luxury tourists from countries such as France and the UK, which were finally perceived as safer after past terrorist attacks. Luxury goods in North America faced a slight current value decline, as demand shifted in multiple categories in 2018. A major theme across luxury goods is the role of the millennial population, which is soon to become the largest consuming generation, as the baby boomer generation fades. The ongoing change of the meaning of luxury in the US in recent years continued in 2018. More than ever, it is evident that quality, sustainability, and story are important in the purchasing habits of US consumers. It is estimated that Latin America will see a rise of 42 percent in the number of millionaires that call the area home by 2025. With the growth of millionaire residents bring with it the need for the luxury brands that they are accustomed to. Latin America has seen a large increase in the number of international luxury brands that are setting up shops throughout the region.
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