Tuesday, 13 June 2017

(NST) Emerging markets to drive luxury market growth: Deloitte Global

KUALA LUMPUR: Emerging consumer markets continue to drive luxury market growth, the fourth annual “Global Powers of Luxury Goods” report issued by Deloitte Global has revealed.

“In China, Russia and the United Arab Emirates, markets that we have categorised as emerging luxury markets, the percentage of consumers claiming to have increased their spending in the last 5 years was 70 per cent, compared to 53 per cent in the more mature markets such as the EU, the US and Japan,” the report stated.

Deloitte Global EMEA Region Fashion and Luxury leader Patrizia Arienti said: “Travel and tourism are still great growth opportunities for the luxury sector.

“Almost half of luxury purchases are made by consumers who are travelling, either in a foreign market (at 31 per cent) or while at the airport (at 16 per cent).

“This rises to 60 per cent among consumers from emerging markets, who typically do not have access to the same range of products and brands that can be found in more mature markets.

“Traditionally, luxury players in Southeast Asia capitalised on the influx of tourists from markets such as China, where the US dollar-adjusted prices for equivalent items are, on average, higher,” said Eugene Ho, Consumer & Industrial Products Industry Leader at Deloitte Southeast Asia.

“However, with luxury brands closing price differences across markets, the opportunity for consumer arbitrage has been diminishing in recent years.

“Instead, luxury brands should adapt to the changing marketplace and focus on providing the consumer with greater service personalisation, wider product selections, and higher quality after-sales service, as increasing consumer sophistication means that price is no longer the sole – nor most important – purchasing determinant.”

Based on publicly available data, the world’s 100 largest luxury goods companies generated sales of US$212 billion in 2015. The average luxury goods annual sales for a Top 100 company is now US$2.1 billion.