Asia Pacific continues to patronize luxury brands despite economic upheavals worldwide creating waves of concern and uncertainties, says Euromonitor International’s new report that focuses on the performance of the luxury market and outlines the top three trends visible in the present and perhaps in the near future. Besides Asia Pacific market the other trends identified include, the return of the extravagant Chinese shopper into international shopping destinations after stringent travel restrictions for nearly three years and the possibility of a new revenue stream for luxury fashion and beauty brands – authentic experiences at home and outside.
Luxury is unfazed in Asia Pacific
The Asia Pacific luxury goods market size is expected to grow from $136.29 billion in 2023 to $166.30 billion by 2028, at a CAGR of 4.06 per cent during the forecast period of 2023 to 2028. The Asian luxury market is in flux, with consumers demanding luxury goods from different backgrounds and starting points. A steady economy, rapidly changing consumer trends, the growth of boutique luxury brands, and the massive shift from physical to digital channels are creating a new competitive landscape for the luxury goods market.
Younger consumers are driving change in luxury consumption and attitudes. They are heavily fixated on sustainability, and most luxury consumers say they prefer brands that are socially responsible. In this region, investment in luxury goods, particularly leather goods, jewellery, and timepieces, is anticipated to surge as an alternative asset. The top five luxury companies in Asia Pacific are Chanel SA, Hermes International SA, Kering SA, Rolex SA and LVMH SE.
Return of Chinese luxury shoppers
The three-year-long pandemic saw Chinese nationals repatriating their luxury consumption and now it seems there is no going back. Even with international borders reopened, local shoppers are choosing to splurge at home. According to sales compiled by alternative data provider Sandalwood Advisors, 62 per cent of luxury spending by Chinese consumers in April took place within the country, far surpassing the 41 per cent recorded in the same period in 2019. This is the main reason why luxury brands are not only rising and shining in China while developing their communication platforms and design concepts such that they are earn favor from local buyers. Jonathan Siboni, Founder and CEO of Paris-based data intelligence firm Luxurynsight, believes Chinese consumers are rethinking their lifestyles post-pandemic as they no longer want to spend three hours queuing outside a store in Paris in the rain. Rather they would connect with a local sales associate who knows them and can advise them better.
Authenticity at home and about
The lockdown saw the emergence of a new home, the one that was also a professional work space, the gym and the only place for two-long years that was supposed to create an authentic living experience within its four walls. This trend of luxuriously appointed homes has given a new lease of growth for luxury home furnishings and accessories which luxury fashion brands are eyeing as a new source of revenue as the trend seems to be here for a longer term. Moreover, with everything back to pre-pandemic normal and travelling opening up, luxury hospitality sector worldwide is seeing a rise. Global sales of luxury hotels grew 27 per cent in 2022 with further real growth of 17 per cent expected by the end of 2023.
The Euromonitor report highlights, the global luxury market has experience three-long years of the unusual series of events that shook the whole consumption pattern worldwide. But today both, luxury consumers and luxury brands are looking at a new reality where consumers are realigning their wants and brands are trying to cater to the emerging behavior.
