Luxury market is a broad term that encompasses perfumes,
jewelery, watches, clothes, footwear and many more. In fact there is no
particular definition of what products come under the category of 'luxury'. There
are very few parameters to decide to decide on the term. Based on the utility, and
the amount of money spent on buying the product, it can be defined as 'a luxury
product'. These are meant to show off a person's prosperity, lavishness, and
also serve as a medium of self expression.
Attitudes about Luxury:
Worldwide market for luxury goods has a highly cyclical
nature. Wealth of the people, economic growth of a country, and media
promotions are said to be the driving force behind the industry. Global luxury
market has grown at a pace of 15% for a year, outperforming mainstream apparel
sectors. Changes in human behavior, a positive increase in the amount of
disposable income and globalization has made this magic transformation.
Global market for luxury products is expected to grow to $2
trillion USD by 2010 of which the US market will constitute to be around $1
trillion USD. With the growth in Western consumer markets seeking unique
shopping experience, international brands are forced to promote their products
to the core markets.
Spending on Luxury:
There is a rising interest for the shopping of luxury
products. This high end market, which was once considered to be accessible only
for the elite, has undergone drastic changes with middle income consumers
showing interest towards the consumption of luxury goods. Growth of your
professionals, increasing families where both husband and wife are working, and
singles with more money and strong yearning to shop for luxury products will
boost the growth of this segment. Beauty products, perfumes, and spa products will
attract the attention of shoppers. This trend will facilitate the entry of new
brands into the market.
Prominent Brands:
New brands will cultivate brand loyalty to lure luxury
shoppers. More number of boutiques and specialty stores will spring up
emphasizing on brand image. Fashion accessories like wallets, belts, handbags
etc will fuel the growth of this segment and will be preferred by increasing
number of customers.
Brands like Gucci, Versace, Christian Dior, LVMH, Couture, and
Giorgio Armani will be dominating the global market. A recent survey reports
that Gucci products top the list of luxury brand shoppers in 48 countries
around the world. Besides this, Louis Vuitton, Calvin Klein, and Chanel are
also preferred.
Growth of the market is fuelled by growing economies of
countries like Asia. US, and Europe will set the leading trends for designer
wears. North Americans show less interest in buying designer wears, while UAE
and Hong Kong tops the list. Shoppers of Eastern Europe, Middle East, Latin
America, and Africa believe that designer goods have superior quality.
Recession and Luxury-Challenges for the Market:
With the spreading pangs of global turmoil, the
unprecedented growth of luxury segment during the past decade has experienced shrinkage
of 10% during the first two quarters of 2009. There is a paradigm shift in the
shopping habits of the consumers with the trend moving towards private label,
and cheaper brands.
