USD 291 Million
Report ID: SQMG25S2014 | Region: Global | Published Date: November, 2022 | Pages: 157
Global Luxury Goods Market was valued at USD 291 Million in 2021, and it is expected to reach a value of USD 443.37 Million by 2028, at a CAGR of 6.2% over the forecast period (2022-2028).
Premium goods play a significant role in displaying the status symbol. Only a small portion of the world's population can buy such products because. Due to the fact that the price of the product is typically not a decisive issue for such people, and instead the distinctiveness and prestige of the product are the main elements influencing their purchase, businesses are therefore focusing their creative designs on an affluent demographic. For instance, Garmin International, Inc. unveiled its opulent MARQ Golfer smartwatch in June 2020. This is comprised of high-quality components, including a 46 mm titanium casing and a ceramic bezel with specially engraved marks for the 1–18 golf holes. In addition, the watch has PlaysLike Distance, Hazard View, and Virtual Caddie features that will improve the golfer's performance.
In 2020, the income levels of the working groups changed as a result of job losses and reduced income level because of Covid Pandemic. It left a negative impact on the luxury goods market for at least 2 years. In a same vein, stay-at-home orders reduced the requirement to buy such expensive goods. The lockdown also resulted in the cancellation or postponement of a number of celebrations and events with a fashion theme, which had an effect on the demand for these kinds of products. Additionally, the cancellation of tours and vacations had a detrimental effect on the purchase of such goods while travelling, such as those bought in duty-free stores in airports or on cruises. For instance, according to LVMH's financial results for the first half of 2020, which were published in July 2020, the pandemic caused a reduction in revenue generation across all luxury goods categories in 2020. According to the same source, the company's revenue from the watches & jewellery area plummeted by 38% over the same period in 2019 while revenue from the fragrances & cosmetics segment fell by roughly 29%. However, because of the closing of retail stores, it was stated that online purchases received favourable feedback from customers. As a result, in the near future, the worldwide market for personal luxury products is likely to regain momentum through online channels, and the removal of lockdown limitations would help this happen.
Global Market Size
USD 291 Million
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Global Luxury Goods Market is segmented based on product, end-user, distribution channel and region. Based on the product, the market is segmented into watches & jewelry, perfumes &cosmetics, clothing, bags/purses, and others. Based on the end-user, the global luxury goods market is segmented men and women. Based on the distribution channel, the market is divided into offline and online. Based on region, it is categorized into North America, Europe, Asia-Pacific, South America, and MEA.
Analysis by Product
On the basis of product type, the luxury goods market is segmented as watches & jewelry, perfumes &cosmetics, clothing, bags/purses, and others. The market is divided into categories based on the type of product: apparel, bags/purses, cosmetics, watches & jewelry, fragrances & cosmetics, and others. Due to the growing demand from both male and female end users as well as the quickly evolving fashion trends, the clothing segment is anticipated to hold a significant proportion of the market. However, due to the rising demand, particularly for products made of leather, the bags segment is predicted to rise quickly in the global luxury goods market.
Today, end-user demand for stylish handbags that match is rising. These handbags can be used for a variety of purposes, including office bags, parties, or casual bags depending on the situation. For instance, the luxury company Loewe introduced their Balloon bag in February 2020. It was made accessible in all three sizes, small, medium, and big, depending on consumer needs. Due to the rising demand for sophisticated luxury watches and a variety of jewelry goods, the watches and jewelry category is anticipated to hold a sizable part of the market. For instance, according to a report from Savills Global Luxury Retail 2019 Outlook, the proportion of new jewelry stores launched climbed from roughly 10% in 2017 to 13% in 2018. The other segment consists of goods like footwear and eyewear, which are anticipated to grow in popularity as a result of the release of new product designs on the market.
Analysis by End-User
Based on end-user, the luxury goods market is segmented into men and women. Women end-users make up a large portion of the market for most luxury goods, including cosmetics, fragrances, handbags, necklaces, earrings, and bracelets.
However, new trends in men's grooming would encourage the expansion of the male luxury goods market, increasing demand for branded shirts, designer eyewear, and expensive timepieces. As a result, several players are concentrating on releasing goods that can satisfy the various needs of both end users. For instance, OMEGA debuted a new line of upscale eyewear in January 2020 that includes many shades appropriate for both men and women.
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Geographically, Europe is dominating the global luxury goods market. In 2019, Europe generated a revenue of SD 103.86 billion thanks to a strong presence of vast number of major companies, including L'Oréal, LVMH, Burberry, and others. For instance, according to the Savills Global Luxury Retail 2019 Outlook study, London was the top city globally, accounting for 9.6% of new luxury shop openings worldwide in 2018. When compared to 2017, it grew by roughly 38%. According to the same source, Paris came in at number four on the list and contributed 4.7 percent in 2018. A considerable number of luxury fashion weeks are also hosted in nations like Italy, France, and the United Kingdom due to Europe's status as a global fashion powerhouse, which is further expected to spur market expansion. Furthermore, the populace in this area has a strong preference for attractive clothing and accessories, which has fueled the market's expansion.
North America luxury goods market is distinguished by the rising number of wealthy individuals, mostly in the U.S., who have fueled the demand for the products. For instance, according to the Institute for Policy Studies' estimate titled "Billionaire-Bonanza-2020," the number of billionaires in the United States climbed from 298 in 2000 to around 614 in 2020.
Asia Pacific market is expected to expand quickly because the middle-class population in the region is expected to have more discretionary income in the future. Similar to this, more access to luxury brands from around the world would result in higher product consumption. For instance, in July 2020, The British luxury goods giant Burberry announced a partnership with Tencent and the opening of its first social retail store in Shenzhen for Chinese customers. The store's approximate 539 sqm/5800 sqft size includes ten rooms that provide a variety of interactive, tailored retailing experiences. A growing number of professional women in the area have also increased the purchase of luxury goods geared at women, such as purses, designer shoes, and jewellery items, thanks to their rising discretionary income.
As the urban population rises in nations like Brazil and Chile, the South American market is projected to expand steadily. Therefore, it is anticipated that changes in the level of living will increase consumer spending on luxury brands in the area.
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As the name implies, luxury goods are primarily products that the wealthy segment of the population explores. Thus, an increase in the number of wealthy people is expected to fuel the expansion of luxury goods market. For instance, according to data from Oxfam International released in January 2020, there are around 2,153 billionaires in existence worldwide who are wealthier than the 4.6 billion individuals who make up 60% of the world's population. To capture the attention of the millennial and Gen Z generation, businesses are tailoring their product offerings. For instance, Louis Vuitton offers the option for customers to hand-paint or add a hot stamp to their handbags. Therefore, the market's expansion would be supported by the wealthy population's rising desire for high-end fashion goods.
Global luxury goods market is embracing the sustainability trend and promoting the use of eco-friendly raw materials and prudent energy management. Instead of using leather products made from animals, manufacturers have started utilizing a plant-based leather, such as that made from pineapple and other organic resources. For instance, in June 2020, the luxury goods shop Vikki Jones introduced its new range of eco-friendly tote bags made entirely of vegan leather, assuring that no animals were injured during production.
In addition, it is emphasized that safer raw materials, less water, and less electricity should be used throughout the supply chain. For instance, the Prada Group and the Crédit Agricole Group signed a Sustainability Linked Loan arrangement in November 2019. If Prada meets its sustainability goals, it will be able to lower interest rates on a five-year, 50-million-euro sustainability term loan. Among other things, the sustainability goals include using Re-Nylon (regenerated nylon) in product production and earning a LEED Gold or Platinum Certification for the company's retail locations. As a result, growing efforts to produce luxury items sustainably will probably increase demand for green goods.
Global luxury goods market is anticipated to be hampered by a rising trend of buying second- hand branded products or renting luxury items because these products are available for less money than they were originally priced. Similarly, the growing practice of counterfeiting, in which goods that resemble luxury brands are sold for less money, is anticipated to impede market expansion.
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Key players in the luxury goods market priorities tactics including partnerships and new product development to increase their market share. Due to their broad presence in most regional markets and excellent product portfolios, leading corporations hold a significant share. To strengthen their position in the market, luxury firms are concentrating on implementing a variety of initiatives, such as alliances, new product launches, and acquisitions. For instance, on December 11, 2020, L'Oréal and Prada S.p.A. inked a contract allowing L'Oréal to design, produce, and market luxury beauty products for Prada.
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According to our global luxury goods market analysis, increased wealthy population, increased awareness toward sustainable products, rising demand for such innovative and advanced skincare technologies and products and increased disposable incomes are some major factors driving the growth of the global luxury goods market.
|Market size value in 2021||USD 291 Million|
|Market size value in 2028||USD 443.37 Million|
|Forecast Unit (Value)||USD Million|
|Regions covered||North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA)|
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Parent Market Analysis
KEY MARKET INSIGHTS
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
For the Global Luxury Goods Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Global Luxury Goods Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Global Luxury Goods Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Global Luxury Goods Market for additional countries.
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