A new study has indicated Asia will take over 50 percent of the luxury market in the next ten years. As Asian household incomes grow and local economies expand, the region will account of 50 to 60 percent of the world’s luxury brand turnover, according to Economist Intelligence Unit (EIU).
The region, which currently accounts for around two-thirds of the market, has seen a slowdown in its luxury goods sales in recent years, the EIU’s new ‘Rich Pickings’ report suggests.
The strongest growth region is to remain China, as the country is thought to have nearly 13m households with a disposable income of 150,000 US dollars or more by 2030. India will be hot on the heels of China, with more than 30m households expected to have annual incomes exceeding 50,000 dollars.
The report forecasts that India will become a “key battleground for luxury brands as the retail market opens up to foreign investment”.
A wealthy elite has also emerged in Indonesia on the back of the global commodities boom. Meanwhile, Malaysia and Thailand are becoming shopping destinations, the EIU says, with the former benefiting from low import duties on luxury goods.
However, not all countries will see growth. In particular, Japan is suffering from a weak currency and fragile consumer confidence, which the report said will hamper its potential.
The newly wealthy are also savvy and have the resources to travel, Asian shoppers may buy luxury goods when abroad to avoid the high level duties. This is expected to have an impact on growth.
Source: FashionUnited, August 13, 2013