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According to Euromonitor’s latest data, the global luxury goods industry is expected to continue its expansion in 2017, although slowly, with disappointing headline growth. As tough global trading environments continue to prevail – social and political unrest in Asia Pacific, economic slowdown in Latin America, and conflict in Eastern Europe will conspire to restrain growth in both key emerging and developed markets.
Indeed, the market continues to face headwinds from major luxury goods markets, such as France and Hong Kong, as well as other large emerging markets, such as Russia and Brazil, while instability in the Middle East continues to cloud the horizon.
Whilst 2017 will not be a stellar year for the global industry overall, we will see some tailwinds, with markets such as India and Mexico in a much stronger position. At the same time, luxury brands and retailers continue to seek ways to harness social media and tap into the psyche of the digital consumer, as connectivity continues to drive new opportunities in digital innovation and growth in the omnichannel continues to reach new frontiers.
Divergence remains a key theme across the luxury markets for the year ahead with strong regional disparities in Asia Pacific appearing strong with 5% growth, a marked difference to 2015, with a regional growth of just 1%, reflecting the significant economic slowdown in China.
The developed regions of Western Europe and North America were significantly weaker, with both regions showing a slight downturn in 2016 with a weak Eurozone continuing to hold back regional performance and the added concerns over terrorist attacks, as well as the more recent Brexit vote, have also dampened sales. In the next 5 years, the US is predicted to lose its top spot in the ranking to China.
However, the disappointing data for the developed regions should not obscure the importance of these high-value luxury goods markets. These regions remain amongst the most powerful in the world and together account for over half of all luxury goods sales in 2016.
Insights from Fflur Roberts, Head of Luxury Goods at Euromonitor International. Find out more in this videocast with Fflur and our datagraphic. Further information about the Luxury Goods market, visit https://blog.euromonitor.com/category/luxury-goods.