Luxury Goods by Country is a unique way to determine the global brands that will emerge as the global powerhouses in the next decade. We have identified twenty key findings from our research, which point to the importance of China and India as the two fastest growing markets in the world today. We have also discovered that the two countries have some of the most important consumer segments, which makes them key to the future growth of the global brand. In addition, our research also points to some of the most promising consumer segments for the rest of the developing markets such as South and Southeast Asia and Latin America.
China has emerged as the largest and fastest growing economy in the world today. The current consumer trend is focused on service-based products such as electronics, technology and foodservice. As the economy develops and grows, it will be critical for China to develop an infrastructure and culture that support the growth of its retail sector. Currently, the biggest consumer market is focused on products such as: food, clothes, cosmetics, furniture and technology. These key findings from our data analysis suggest that there will be a large potential impact for these consumer segments over the next five to seven years on the global luxury brand landscape.
The third largest consuming market is from foreign tourists. Our latest retail sales data report offers some insight into the motivations of foreign tourists and reveals that many travellers are now buying luxury items for their home from major department stores and lifestyle brands. Foreign travellers are particularly motivated to purchase clothing and accessories for women as fashion and function remain the most important elements for fashion-conscious tourists. Although foreign tourists are spending a greater proportion of their disposable income on luxury goods, they are spending this capital with a larger number of products than ever before.
Travel Restrictions are currently becoming a significant factor for the luxury market. The recent economic slowdown in China and other emerging markets resulted in a rapid decline in travel for Chinese holidaymakers. The current economic and social context has increased the urgency for Chinese travellers to maximize their return holiday spending power. The current restrictions on travelling abroad by Chinese citizens only increase the competition for destinations with lucrative tourism dollars. The current report offers some insights into the luxury travel sector in China, highlighting the role that government restrictions are playing in driving growth in certain sectors.
One of the largest sources of growth for the luxury market in China is the growth of online shopping and consumption of electronic products. The rapid rise in e-commerce activities is one of the biggest drivers behind the current report’s focus on the consumer sector and its role in driving the current boom. Consumer spending is growing at a pace that outstrips the rate of inflation. This has created the ideal environment for consumers to spend more. In addition to purchasing new electronic gadgets, more buyers are turning to second hand goods and accessories. The current report highlights the opportunities created by surplus production and the role that surplus manufacturing can play in ensuring continued international growth.
The internet has also provided opportunities for brands to showcase their brands through social media platforms such as Weibo and Qqiei. As China’s consumer base continues to expand, opportunities are being created for younger consumers to purchase products that they would not have been able to previously. This has created a large segment of the Chinese market that is looking for traditional branded products in an increasing range of styles and price points. The report identifies some potential pitfalls in the current sector, highlighting some of the challenges facing brands who want to tap into this growing niche.
Despite the current growth opportunities there is scope for brands to continue building on past successes as China continues to implement recovery driven policies. The current report identifies six key areas where brands need to focus if they want to achieve their planned investment goals. These key areas include property development, infrastructure, transport and communications, retail and e-commerce. While these factors constitute a large part of the annual China spending, there is scope for significant growth in other areas including corporate marketing, higher education and the H&M category. Other areas that could see significant improvements include home appliances, education, travel restrictions and telecoms.
As the internet becomes more restrictive, it has become more important for brands to ensure that they have high quality, simple and easy to use websites to meet consumer demands. In China, as the internet becomes more popular, there is an increasing demand for websites that cater to local users, increasing the potential for brands to make a significant profit from e-commerce in the future. There is scope for brands to focus on this area if they adopt a more localized approach to selling their products and services. For instance, brands may choose to build websites that offer products related to their target market and target their audience by region.