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The tourist effect: Boosting luxury sales worldwide

Portrait of young beautiful women with her shopping bags

The global luxury market is poised to reach $284 billion in 2014, reveals Bain & Company

 

Most international markets are strongly driven by touristic spends, reveals Bain & Company’s 13th edition of its Luxury Goods Worldwide Market Monitor.

The report, released last week in Milan, states that “currency fluctuations, persistent economic weakness in Europe and external forces, such as the Crimean crisis and protests in Hong Kong, demand from Chinese consumers and mature consumers in the US and Japan re-approaching luxury, have helped to counter a potentially significant downward momentum” in the global luxury market.

Chinese consumers currently represent the highest and fastest-growing nationality for luxury spending, both abroad and locally, with consumption growing by ten per cent in the first eight months of 2014.

While the Chinese may be at the top of the client lists of luxury brands for the moment, Middle Eastern consumption has also increased by 11 per cent, as a result of the increasing number of tourists in the region, according to the research.

“With such cross-pollination of luxury spending, it no longer makes sense to think only in terms of geographies. The focus is shifting to consumers, with local trends and tastes representing only part of the picture,” says Claudia D’Arpizio, a Bain partner in Milan and lead author of the study.  “This new mindset has important implications for luxury brands. It requires that they think about their product offering from a more global perspective, with the concept of seasons, a key pillar of this industry, becoming increasingly obsolete.”

The report states that Bain & Company expects ‘significant changes…for the luxury market’ over the next ten years, and the Middle East’s results are bound to increase, as a result of both Dubai’s Expo 2020 and Qatar hosting the 2022 World Cup, attracting a large number of tourists to the region in the next eight years.

 

 

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