Luxury Goods Market Size, Share, Growth Analysis, By Product(Watches & Jewellery, Perfumes &Cosmetics, Clothing, Bags/Purses), By End-User(Men, Women), By Distribution Channel(Offline, Online), By Region - Industry Forecast 2024-2031

Luxury Goods Market Driver

Increased Wealthy Population Will Support Market Expansion

• 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.

Increased Awareness Toward Sustainable Products to Provide Opportunities for Growth

• 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.

Luxury Goods Market Restraint 

Growing Use of Second-Hand and Counterfeit Branded Items to Suppress Demand

• 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.