“Luxury sales in China have increased by $9.6 billion in the last five years and aside from the U.S., the top luxury market in the world with $18.6 billion in sales, no other market came even close to that growth” said Euromonitor’s Fflur Roberts. “However, this impressive growth fizzled towards the end of 2013, leading many luxury brands to question their strategy for China and other emerging markets.”
The study found that the U.S. remains the world’s largest luxury market, valued at $78 billion this year. Japan, the second largest single market, is worth less than half that. Western Europe, with major shopping centers like London, Paris and Milan is the largest regional luxury market, valued at $113 billion. In Eastern Europe, sanctions against Russia and regional instability are curbing luxury growth. India is still the fastest growing luxury market by percentage: up $1 billion in the last five years, a 98% increase.
Roberts added that while China’s spending has slowed, wealthy Chinese citizens are expected to spend more outside China. “Many high-income consumers from the mainland are likely to look to relocate overseas, with the U.S., Europe and Canada top choices for a new home. As they move, so will their buying power.”