Luxury brands once garnered association with the elite class being the ultimate pillar of success. Today the luxury market has grown to encompass a globally engaged population of younger consumers who come from more diversified backgrounds with greater spending habits. The youth consumer has dramatically shifted over the years, and to date, its influence in the eyes of several leading global luxury brands has been noted.
Through avenues such as social media, advertising, and increased travel, more and more young consumers have their eye on buying into the luxury goods market. The increase of spending habits from younger consumers is mainly prevalent in emerging markets, as certain parts of the world place high value on brand name identity.
According to Bain and Company, a Boston based global management firm, it forecasts the worldwide luxury market to grow to $290 billion USD in 2015, as the demand for high-end luxury – especially clothing and accessories – rises in emerging markets such as India, China, Brazil, and Russia.
Interestingly enough, luxury brands have not been highly affected by many of the transpiring financial events that have hit various other sectors globally. These brand names have built their reputations and financial holdings by remaining strategically branded entities to their worldwide consumers. As the market for luxury goods is poised to grow, these brands are using their overall reputations to revamp and repackage luxury to the new emerging and elite consumers who have higher purchasing powers elsewhere.
European markets are poised to see a 2% growth, which is considerably low for the region. Japan will experience a sharp 12% decline in the consumption of luxury brands. The East Asian region of Greater China will see growth at upwards of 4% splitting growth between Hong Kong, Macau, and Mainland China. Overall, the Chinese consumer has increased from roughly 25% to upwards of 30% of the market.
Sales in the Arab world also remain strong with an over five percent estimated growth in the luxury market with strong focus residing on the Emirates, while Saudi Arabia now becomes the regions second largest luxury market. Continent-wide growth for Africa rapidly showcases an emerging region for long term growth and vast potential with 11% growth and expansion expected with strongholds in Angola, Morocco, Nigeria, South Africa, and Rwanda. Southeast Asia comes in at roughly 11% becoming the highest potential earning demographic with luxury consumers demanding lucrative brands in Singapore, Malaysia, Indonesia, Vietnam, and Thailand.
The bottom line remains that as growth for luxury brands rapidly slows in the Americas and Western Europe, many of the most important companies within this sector are targeting a newer demographic of young brand-conscious consumers globally.
The increasing changes and connections youth consumers and global luxury brands now share is a trend that continues to grow. Youth consumers are driving how major multinational brands shift their approach for growth and sales; and through this method, the spending habits of the youth market remains on track to grow.
The millennial generation can learn a lot from these current market trends, as they tend to foster the next phase of growth in several of the previously mentioned international markets. Your presence is important in how the market shifts to look younger and to appeal to savvy and wealthy foreign nationals abroad. Understand that these brands will continue to affect your lives and consumption habits, especially as they become more prevalent in greater avenues of young people’s lives.
Currently according to Forbes, the top ten most valued brands globally come mostly from the fashion, accessory, and spirits industry.
- Louis Vuitton ($19.4 Billion)
- Hermès ($7.86 Billion)
- Gucci ($7.47 Billion)
- Chanel ($6.22 Billion)
- Rolex ($5.53 Billion)
- Hennessy ($5.40 Billion)
- Cartier ($4.91 Billion)
- Moet & Chandon ($4.85 Billion)
- Fendi ($3.47 Billion)
- Prada ($2.7 Billion)
Image: Blake Bronstad