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Against the backdrop of globalisation, political and geographical instability and changing consumer purchasing habits, using the latest data for 2016, Euromonitor International can reveal whether the industry has lost its luxury edge and what lies ahead for luxury markets on a global scale.
According to our latest data, the global luxury goods industry looks set to continue to expand in 2017, albeit slowly, with disappointing headline growth. As tough global trading environments continue to prevail, the market and key luxury players face mounting risks for 2017 – 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.
Within the global luxury goods market there are significant regional differences. Asia Pacific appears strong with 5% growth, which is a marked difference to the 2015 numbers, when we saw 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. Indeed, the week Eurozone continues to hold back regional performance and the added concerns over terrorist attacks, especially in cities like Paris and London, as well as the more recent Brexit vote, have also dampened sales.
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.
Some of our top findings are as follows: