2 October 2015

Luxury market in Asia Pacific slowing down but long term still glitters

The Luxury Goods Retailing Market in Asia-Pacific, 2014-2019 Market and Category Expenditure and Forecasts, Trends, and Competitive Landscape report from ReportsnReports says Japan will remain the largest luxury goods market in Asia Pacific while China will see a slowdown.

Luxury retail sales in the Asia-Pacific region has been a bright spot in the past, driven by emerging luxury markets. The economic slowdown in China has however reduced Chinese spending on luxury goods in 2014, and growth has slowed elsewhere in the region. Luxury retailers are slashing prices to attract shoppers while governments are exempting taxes and relaxing visa restrictions in attempts to increase tourist spending. 

Jewellery, watches, and accessories make up the largest and fastest growing category in the region, driven by higher spending on jewellery and watches by Chinese, Japanese, and Korean consumers. The Hong Kong luxury goods market is struggling due to political unrest and reduced Chinese spending. Luxury tax exemption is expected to boost luxury goods consumption in Indonesia. Social messaging apps are a trending marketing channel for luxury brands, as the digital channel is influencing the purchasing decisions and pattern of consumers.

Over the longer term, the luxury goods retail sales market in Asia-Pacific will reach US$134.9 billion by 2019, growing at a CAGR of 7% from 2014 to 2019. India's luxury goods market is the fastest growing in Asia-Pacific, driven by rising disposable income, growing fascination with luxury brands, and the desire of high earners to differentiate themselves from others.

LVMH, Ralph Lauren, Coach, Compagnie Financiere Richemont (Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC Schaffhausen, Panerai and Montblanc), Kering (includes Gucci, Bottega Veneta, Alexander McQueen, Balenciaga, Stella McCartney, Boucheron, Girard-Perregaux, Ulysse Nardin, Puma, Cobra, and Tretorn), Tiffany and Company, the Burberry Group, Herm├Ęs International, Prada and Salvatore Ferragamo Group are mentioned.

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Read the WorkSmart Asia blog post about the Middle Eastern love for luxury handbags