Has the crisis ended with luxury?
A luxury good is one whose demand increases as the consumer's purchasing power increases. Thus, as buyers' incomes grow, the production of this type of goods rises significantly.
However, cataloging a good as belonging to the luxury and exclusivity sector implies issuing a value judgment as to what is understood as an essential -basic- or abundance state; in fact, this classification is determined according to the degree of social and economic development of the country in question. For example, a television may be considered a luxury good in a poor country and not in a nation that enjoys a high degree of industrialization.
Despite a long series of hurdles marked by the current economic crisis, there are good reasons to be optimistic about the future of luxury. In this sense, we must not forget that the industry has been going through a difficult stage in recent years but now everything could be preparing to experience a spectacular rebound.
According to data from the consulting firm Bain & Company, Chinese consumers, including their spending as tourists, currently represent more than 20% of world sales of luxury products. Moreover, by 2018, China is expected to become the second largest market in the sector, after the United States. In turn, 30% of global luxury goods sales are in emerging markets (Asia Pacific, Latin America, the Middle East and Africa).
However, the median age of luxury consumers in Asia is steadily decreasing, while in Japan, Europe and the United States it is increasing, creating a new generation of luxury consumers, but with very different tastes and preferences.
On the other hand, it should be noted that women are making traditionally male purchases - business suits, watches, cars - since they are increasingly independent with their expenses. At the same time, men are more and more likely to look for brands with attributes around fashion and beauty - mostly feminine - as well as the functionality of the products.
It should also be noted that the convergence of traditional stores, e-commerce, social networks and commerce through mobile is creating an “omnichannel” experience for consumers that has a very beneficial impact on the increase in sales of luxury goods. What's more, the Internet has transformed luxury into a transparent tool that offers greater choice as consumers can now compare prices from around the world and from various retailers.
Finally, the audit company Deloitte ensures that there is real potential for mergers and acquisitions within the sector. “The appetite for European and American brands by emerging economies is growing. Emerging market buyers and investment groups are keen to acquire Western brands. "
Tags: passes opinion USA