Global Luxury Goods Market

Luxury Goods Market Size, Share, Growth Analysis, By Product(Watches & Jewellery, Perfumes &Cosmetics, Clothing, Bags/Purses), By End-User(Men, Women), By Distribution Channel(Offline, Online) - Industry Forecast 2024-2031

Report ID: SQMIG25S2019 | Region: Global | Published Date: February, 2024
Pages: 157 | Tables: 90 | Figures: 76

Luxury Goods Market Dynamics

Luxury Goods Market Driver

  • Increased Wealthy Population Will Support Market Expansion

As the name implies, luxury goods are primarily products that the wealthy segment of the population explores. Thus, an increase in the number of wealthy people is expected to fuel the expansion of luxury goods market. For instance, according to data from Oxfam International released in January 2020, there are around 2,153 billionaires in existence worldwide who are wealthier than the 4.6 billion individuals who make up 60% of the world's population. To capture the attention of the millennial and Gen Z generation, businesses are tailoring their product offerings. For instance, Louis Vuitton offers the option for customers to hand-paint or add a hot stamp to their handbags. Therefore, the market's expansion would be supported by the wealthy population's rising desire for high-end fashion goods.

  • Increased Awareness Toward Sustainable Products to Provide Opportunities for Growth

Global luxury goods market is embracing the sustainability trend and promoting the use of eco-friendly raw materials and prudent energy management. Instead of using leather products made from animals, manufacturers have started utilizing a plant-based leather, such as that made from pineapple and other organic resources. For instance, in June 2020, the luxury goods shop Vikki Jones introduced its new range of eco-friendly tote bags made entirely of vegan leather, assuring that no animals were injured during production.

In addition, it is emphasized that safer raw materials, less water, and less electricity should be used throughout the supply chain. For instance, the Prada Group and the Crédit Agricole Group signed a Sustainability Linked Loan arrangement in November 2019. If Prada meets its sustainability goals, it will be able to lower interest rates on a five-year, 50-million-euro sustainability term loan. Among other things, the sustainability goals include using Re-Nylon (regenerated nylon) in product production and earning a LEED Gold or Platinum Certification for the company's retail locations. As a result, growing efforts to produce luxury items sustainably will probably increase demand for green goods.

Luxury Goods Market Restraint

  • Growing Use of Second-Hand and Counterfeit Branded Items to Suppress Demand

Global luxury goods market is anticipated to be hampered by a rising trend of buying second- hand branded products or renting luxury items because these products are available for less money than they were originally priced. Similarly, the growing practice of counterfeiting, in which goods that resemble luxury brands are sold for less money, is anticipated to impede market expansion.

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Luxury Goods Market size was valued at USD 230.05 billion in 2019 and is poised to grow from USD 242.8 billion in 2023 to USD 369.8 billion by 2031, growing at a CAGR of 5.4% in the forecast period (2024-2031).

Key players in the luxury goods market priorities tactics including partnerships and new product development to increase their market share. Due to their broad presence in most regional markets and excellent product portfolios, leading corporations hold a significant share. To strengthen their position in the market, luxury firms are concentrating on implementing a variety of initiatives, such as alliances, new product launches, and acquisitions. For instance, on December 11, 2020, L'Oréal and Prada S.p.A. inked a contract allowing L'Oréal to design, produce, and market luxury beauty products for Prada. 'LVMH Moët Hennessy Louis Vuitton SE', 'Kering SA', 'Hermes International SA', 'Chanel SA', 'Richemont SA', 'The Swatch Group Ltd.', 'Burberry Group plc', 'Prada S.p.A.', 'Giorgio Armani S.p.A.', 'Ralph Lauren Corporation', 'Tiffany & Co.', 'Cartier International SNC', 'Salvatore Ferragamo S.p.A.', 'Christian Dior SE', 'Tod's S.p.A.', 'Versace S.p.A.', 'Michael Kors Holdings Limited', 'Coach Inc.', 'Ferragamo S.p.A.', 'Loro Piana S.p.A.'

Increased Wealthy Population Will Support Market Expansion

Trend of embedded products is going strong in the current luxury goods market.

Geographically, Europe is dominating the luxury goods market. In 2019, Europe generated a revenue of SD 103.86 billion thanks to a strong presence of vast number of major companies, including L'Oréal, LVMH, Burberry, and others. For instance, according to the Savills Luxury Retail 2019 Outlook study, London was the top city globally, accounting for 9.6% of new luxury shop openings worldwide in 2018. When compared to 2017, it grew by roughly 38%. According to the same source, Paris came in at number four on the list and contributed 4.7 percent in 2018. A considerable number of luxury fashion weeks are also hosted in nations like Italy, France, and the United Kingdom due to Europe's status as a fashion powerhouse, which is further expected to spur market expansion. Furthermore, the populace in this area has a strong preference for attractive clothing and accessories, which has fueled the market's expansion.

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Global Luxury Goods Market

Product ID: SQMIG25S2019