As the global economy advances, a significant surge can be witnessed in the disposable income of consumers. Enabling consumers to afford expensive products, this rise has shifted their preference towards luxury goods substantially. According to a research study published by Transparency Market Research (TMR), the demand for luxury goods has been escalating remarkably across the world. In 2013, the global market for luxury goods presented an opportunity worth US$296 bn. During the period from 2014 to 2020, it is likely to expand at a CAGR of 3.40% and reach a value of nearly US$375 bn by the end of 2020.
In this blog post, analysts at TMR answer the queries related to the growth prospects of the global market for luxury goods:
Q.Which region is likely to gain prominence in the global luxury goods market over the coming years?
Thanks to its reputation as the best destination for luxury goods shopping among consumers across the world, Europe has been leading the luxury goods market for over a decade. With the proliferation of standalone brand stores, high-end departmental stores, and online retail, the regional market is likely to gain further prominence in the near future.
The presence of several well-established luxury goods manufacturers in various European countries, such as LVMH in France, Prada in Italy, Burberry in the U.K., and Rolex in Switzerland, is also expected to support this scenario in the long run.
Q.What are the growth opportunities for other regional markets?
The increasing number of high net-worth individuals (HNWI) as well as young affluent buyers is likely to present substantial opportunities for the growth of the luxury goods market in North America. Asia Pacific and the Rest of the World, on the other hand, are expected to gain from the growing awareness regarding the latest trends and fashions among consumers. The rise in their spending power, thanks to the escalating disposable income, will trigger their desire for upscaling their lifestyles with luxury goods, which in turn, will reflect positively on the markets for luxury goods in Asia Pacific and the Rest of the World.
Q.What are the key strategies leading players are adopting for the growth of their businesses?
LVMH, Kering S.A., L’Oréal, Hermes, Burberry, Prada, and Rolex are some of the leading players in the global market for luxury goods. Mostly, these players focus on introducing new products to sustain the competition. Recently, Hermes International launched its latest range of fragrances, Galop d'Hermès. With this launch, Hermes, a market giant in luxury leather, hopes to carve a niche for itself in the luxury perfumes market.
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Mergers, acquisitions, and partnerships are also gaining prominence among key participants of the worldwide luxury goods market, looking to seize greater market share than their competitors.