Asia accounts for the largest share of the global personal luxury goods market
Asia accounts for the largest share of the global personal luxury goods market
The luxury market, which has been a high-profile segment of the economy, has shown great resilience, recovering quickly and growing even after recessions. Luxury goods, which in the past were favored mainly on the basis of function and social value, have evolved into a lifestyle symbol that consumers use not only to display status but also as an investment opportunity. Focusing on the global and Greek personal luxury goods market, the KPMG report provides insights into key areas such as market dynamics, consumer trends, brand strategies and sustainability. It is a valuable reference for industry insiders and investors.
I. Market size and growth trend
The global personal luxury goods market hit a five-year peak in 2022, as luxury spending remained robust despite macroeconomic challenges such as the energy crisis, the war in Ukraine, economic pressures in China, and global inflation. The market revenue reached EUR 234.4 billion in 2022, representing a growth of 9.4% as compared to 2018, growing at a CAGR of 2.3% from 2018 to 2022. The market is projected to grow steadily at a CAGR of 3.2% from 2023-2028 and is poised to reach EUR 311.1 billion by 2028. This growth is mainly due to rising disposable income, evolving consumer preferences, technological advances and increased brand awareness.
Ii. Regional market share
Asia accounted for the largest share of the global personal luxury goods market at 38 per cent, with China contributing 17 per cent, Japan 7 per cent and other Asian countries 14 per cent. The Americas followed with a 32% share, followed by Europe at 27% and the rest of the world at 3%. Tourism contributed significantly to sales growth in all regions, with Asian markets booming due to increased domestic tourism, higher spending by Russian tourists and growing demand for jewellery and watches; The Americas market is influenced by consumer spending and overseas purchases; European markets have benefited from easing travel restrictions, more visitors from the US and the Middle East and higher domestic spending.
Major brands and their market positions
LVMH dominated the global personal luxury goods market with 79.2 billion euros in revenue in 2022, more than three times that of second-placed Kering (20.4 billion euros). Other leading companies include Richeont Group (EUR 19.2 billion), Chanel (EUR 16.1 billion), Hermes (EUR 11.6 billion) and Chow Tai Fok Jewellery Group (EUR 11.4 billion), among others. With their outstanding brand heritage, innovation ability and marketing strategy, these brands have attracted many consumers worldwide, laying the foundation for their leading position in the industry.
Iv. Factors driving market growth
Rapid recovery after recessions: The luxury market can bounce back quickly after recessions, such as post-pandemic sales that not only recovered but surpassed pre-pandemic levels, thanks to stable buying patterns among high-net-worth individuals.
Inelasticity of demand: Although inflation and rising interest rates have pushed up prices, luxury demand has been less affected and its loyal customers are less sensitive to price increases.
Savings built up during the pandemic: The pandemic prompted consumers to save more, and luxury sales were boosted by people seeking satisfaction after restrictions were lifted.
Rise of the Affluent Middle Class: The global affluent middle class is growing, and its rising disposable income and purchasing power have increased its demand for luxury goods to demonstrate social status.
Rise of the younger generation: Gen Z consumers make up a growing share of the luxury market. They are more tech-savvy and value authenticity, individuality and sustainability, and their spending patterns are reshaping the luxury industry.
The impact of social media and celebrity endorsements: Social media has become an important platform for brands to interact with consumers, and luxury brands have cooperated with influencers and celebrities to effectively promote their products and expand their customer base.