Asia-Pacific Luxury Goods Market is anticipated to grow at a CAGR of 8.5% during the forecast period (2020-2025)
- The Asian luxury market is in flux with consumers demanding for 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 helping to drive changes in luxury consumption and attitudes. They are heavily fixated on sustainability and most of luxury consumers say they prefer brands that are social responsible.
Key Market Trends
Growing Penetration Through Online Channels
Luxury is also becoming more digital. Asia is emerging as a new growth engine for luxury online.Eventhough only a small portion of the market is sold through online channles the sales through the channel is growing very rapidly with accessories and beauty products holding the major share. Online continues to gain share , with customers increasingly influenced and enabled by digital channels, also in their physical purchases. The biggest online channels for luxury sales were e-tailers, brands’ own websites and retailers’ websites. Strategic decisions to diversify into new business areas are never taken lightly in the luxury goods industry and competition among players is very strong, intensified by the growth in online shopping. For Instance, Louis Vuitton expanded out from its focus on clothing and bags to open a jewellery house with an online presence.
China Dominates The Market
Spending in China’s market is booming owing to the solid consumer confidence and willingness to buy, especially among young generations. These young consumers are well informed about luxury and eager to embrace innovative trends, such as the convergence of high fashion and sportswear. The Chinese government’s reduction in import duties and stricter controls over gray markets combined with brands’ efforts to narrow the price gap with overseas markets have led more Chinese consumers to make their luxury purchases in China. Sustainability and digitalization are also factors augmenting the growth of the market.
Asia-Pacific Luxury Goods market is a fragmented with the presence of various companies. Players in the market are diversifying their products and are expanding their distribution circles and are experimenting through online channels for acquiring a competitive edge in the market. Some of the major players in the market are LVMH Mo?t Hennessy, Chanel S.A, Herm?s International S.A, Kering S.A. etc.
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