Asia accounts for more than 50% of the global luxury market

Asia currently only accounts for about 1/3 of the global luxury goods market, but this proportion will rise to 50-60% in the next 10 years. This is the “Asian luxury goods outlook” recently released by the economist Intelligence Unit (EIU) economist think tank. The report made predictions.

EIU expects the number of households in Asia with an average annual income of more than 150,000 U.S. dollars to increase from the current 2.5 million to 27 million in 2030, of which 12.7 million will come from China and the average annual income will reach more than 50,000 U.S. dollars. Homes will also increase five-fold to 270 million, accounting for more than one quarter of the 14 key markets in Asia. China will contribute close to two-thirds, or 180 million, and another 30 million will come from India.

In accordance with this trend, the EIU believes that even if China is facing a brake on the growth of luxury goods caused by the slowdown in economic development and the government's crackdown on corruption, the impact of these factors is limited, as China’s long-term growth is driven by the overall rise in resident income and the increase in the number of affluent people. It is still the main growth driver of the Asian luxury market.

India’s luxury purchasing power over the next 10 years will also increase rapidly. Jon Copestake, chief retail and consumer goods analyst at EIU, stated that “with India’s opening up to foreign investment conditions, the local market will become a major battleground for luxury brands”. Indonesia will also benefit from the rise of the wealthy, while Malaysia, Thailand and gradually develop into a luxury shopping destination for tourists.

As for Japan, whether Abe economics can stimulate the long-term growth of the Japanese economy, whether consumer confidence can continue to be high, and whether consumption growth can offset the devaluation of the yen will all be factors that influence Japan's development potential. The EIU is not optimistic about Japan’s long-term development and believes that the country is “drying up”.

The EIU pointed out in the report that the luxury goods groups should adopt a cautious positioning strategy in the overall growth of the Asian market, which “will be able to grow rapidly from smaller cities in the Mainland of China, increase the number of affluent entrepreneurs in India, and accumulate wealth as promoted by the Indonesian commodity economy. Benefit from it."

As for the brakes that have appeared in the Asian luxury market in recent quarters, the report believes that the long-term recovery prospects in Asia are clear: “China’s crackdown on the wealthy and the adjustment of the Japanese exchange rate have caused the market to worry that the growth of the Asian luxury market has slowed down. But even under such circumstances, some luxury companies still produce beautiful transcripts. Europe is stagnating, North America is recovering slowly, and the global focus is on the potential in Asia."