Luxury consumer base to keep growing: Study

Reuters, Wednesday 15 Jan 2014

A recent study points out that in many parts of the world , a potential increase in the demand for luxury goods is in the rise.

 The number of luxury goods buyers reached 330 million last year and is set to rise to 400 million in 2020 and 500 million by 2030 as more people become wealthy in Asia, Latin America and Eastern Europe, a study has found.

The Bain & Co report, in collaboration with broker Redburn Partners and research agency Millward Brown, forecast that the luxury consumer base would grow by an average 10 million people a year.

The study calculated the number of luxury goods buyers using statistics on personal wealth, demography, urbanisation, education and attitudes towards discretionary spending.

The report, published on Tuesday, said that until recently, one factor explaining the widening luxury consumer base was luxury brands' efforts to offer more products at lower prices.

The average price of a piece of branded jewellery fell to 1,500-2,000 euros ($2,000-$2,700) in 2013 from 8,000-9,000 euros in 1995, for example, when there was a luxury consumer base of 90 million people, the study found.

But in the past 18 months, Bain noted that major luxury brands were reversing that trend in response to consumers' growing sophistication, particularly in emerging markets.

Kering's Gucci and Louis Vuitton, hit by logo fatigue in countries such as China, have recently introduced bags with more discreet logos and in expensive materials such as exotic skins, for example.

The study estimated that more than half of luxury spending globally came from shoppers aged 49 or older, as they represented the wealthiest bracket of the population.

Consumers aged between 13 and 33 made up only 13 percent of global luxury spending.

Bain also noted that the top bracket of "true luxury" consumers, or individuals only buying very expensive products, represented about 15 million people who together spent 100 billion euros on luxury goods a year, nearly half of the estimated 217 billion euro global luxury market. 

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