Luxury Goods Find New Home as Emerging Economies Vie for Top Spot

Published Date : Jan 14, 2016

In the modern world today, luxury goods have gained such massive demand that they have almost lost the charm of conspicuous consumption in some regions. The demand for luxury goods generally rises in proportion to personal income. However, with the global consumer experiencing rise in prosperity levels, luxury goods have become more ubiquitous. 

Historically, North America and Europe have been the traditional bastions of the luxury goods market. Industrial and economic growth in North America has enabled the nouveau riche to increasingly demand and afford luxury goods. In Europe, the pioneering and prosperous craftsmanship traditions in Central Europe and the winemaking traditions in Italy and France have propelled the luxury goods market. 

However, times are changing and a number of E7 countries are drawing attention to themselves as major contenders in the luxury goods market. The rising number of high net worth individuals and ultra high net worth individuals in the Middle East, Asia Pacific, and Latin America has offered the global luxury market a strong base to build upon. 

France has been the spiritual home for champagnes and wines, with Spain, Italy, and the US holding the top spots on the global charts. However, the remaining slots in the top 10 winemaking countries are dominated by nations in developing economies. This includes China, Argentina, Chile, Australia, South Africa, and Russia. The South American and Asian wine industries have been making up for a massive share in the global luxury markets in recent times. 

Luxury watches have been traditionally centered in countries such as Italy, Switzerland, and Germany. But with the rising number of billionaires and multimillionaires in Asian countries like India, China, and Japan, the attention is slowly moving towards these emerging economies.

Fragrances form yet another industry centered in Europe but branching out into developing markets. The social elite in Latin America and Asia have become major consumers on luxury fragrances.