A growth in income across individuals in Asia is expected to boost the global luxury goods market over the next decade, according to a report.
The Economist Intelligence Unit (EIU) says the continent, which currently accounts for around two-thirds of the market but has recently seen sales begin to slip, will account for half within 10 years.
However, the EIU’s report added that there were “strong prospects for a long-term recovery” in Asia. Within the next decade, the region is predicted to account for 50-60% of luxury revenue.
The EIU’s chief retail and consumer goods analysts, Jon Copestake, said, “Fears of a slowdown have been heightened recently by China’s crackdown on displays of wealth and Japan’s shifting exchange rate.
“But even in this climate, some luxury firms have continued to deliver strong sales. With Europe stagnating and North America subdued, the focus is firmly on Asia’s potential.”
China will remain the key driver behind sales, with almost 13m households on an average income of $150,000 (£96,720) or more by 2030. Rapid growth in India is also key, with the incomes of more than 30m households expected to exceed $50,000 over the next 10 years. As a result, the report said India would become a “key battleground for luxury brands”.
Other countries that will help drive growth include Indonesia, Malaysia and Thailand. However, the EIU report warned that dangers still remained when operating in Asia. Savvy shoppers, who will start to buy luxury goods abroad, will dent growth and business prospects.