According to a recent talk in Dubai, work and sleep go hand-in-handMarch 31, 2015 10:46
Middle East leads luxury shopping worldwide in 2013
Region spends €1,400 per capita, reveals Bain & Company
March 4, 2014 9:36 by kippreport
The number of luxury consumers worldwide has more than tripled over the past 20 years, from approximately 90 million in 1995 to 330 million at the end of 2013. The statistics come from advisor firm Bain & Company, which are part of a 10,000 luxury-consumer study conducted in collaboration with brokerage firm Redburn Partners and research agency Millward Brown.
According to the report Lens on the Worldwide Luxury Consumer, released recently in Milan, Italy, ten million additional consumers enter the luxury market yearly. The number of luxury consumers is expected to reach an estimated 400 million worldwide by 2020 and 500 million by 2030. In its analysis of approximately 10,000 luxury consumers, the report finds significant differences within the global luxury market and its consumer base, which is shifting from a historically homogenous base of affluent consumers worldwide to a broader and highly heterogeneous class of luxury shoppers.
“Middle Eastern consumers have the highest per capita spending on luxury goods, at approximately €1,400 per year. The vibrancy of this market, however, has given light to a more cautious spending consumer, who shows preference for well-known brands and logos. Their key luxury categories include leather goods, watches, cars and overseas holidays – with Dubai remaining the biggest market in the region with approximately 30 per cent of the total market share,” says Cyrille Fabre, Bain & Company partner who leads the retail and consumer products practice for the Middle East region.
Within the luxury segment’s current 330 million consumer base, 55 per cent (180 million) shift between luxury and merely ‘premium’ purchases, including products, such as designer second lines, beauty products and small accessories. This group comprises approximately ten per cent of global spending, purchasing an average of €150 per capita annually. The remaining 45 per cent (150 million) represent ‘true luxury consumers’ who consistently dedicate part of their discretionary spending to personal luxury products of various nature, usage occasions and price point, and make up approximately 90 per cent of global spending, purchasing an average of €1,250 per capita annually. Additionally, the top ten per cent (15 million) within this group capture more than half of its spending.
Key to the report is its focus on the shift in the heterogeneous global picture for the new luxury consumer and what Bain defines as the ‘seven new faces of the global luxury consumer,’ a comprehensive profiling of seven luxury consumer segments displaying a divergence of tastes and buying behaviours, while straddling national and generational boundaries.
The report finds that while these segments may be concentrated in specific geographies, there are shoppers from every segment in every major global luxury market. There is a global cycle from the enthusiasm of Chinese, the Middle East region and other emerging market consumers to the mature caution of markets, such as the US and Western Europe to the detachment of older shoppers and consumers in Japan. However, within this cycle, there are significant country level differences. Middle Eastern shoppers are increasingly diverse and nuanced, ranging from having a high degree of sophistication and luxury experience to luxury novices. The region emerged as the number one in luxury shopping in 2013 with €1,400 spending per capita, whereas the global average is only €650 spending per capita. Overall, Middle Eastern consumers are among the most ‘generous’ nationality, with approximately half of shopping for gifting (45 per cent versus an average of 40 per cent at global level).
The study confirms that the luxury market is still in the hands of baby boomers (45 per cent of luxury consumption worldwide) whose behaviours and preferences are quite different from their children (Generation Y). Younger generations are consumers of the future and continue to maintain positive attitudes to luxury. They represent the most disparate profiles: From newbies to experts, from classic to edgy, from enthusiast to detractors; the fragmentation in luxury tastes of this group makes the consumer picture ever more complex to handle.