Tatton Teaser: The luxury market

Posted 28 April 2023

The luxury industry is showing signs of resilience in the face of a weaker-than-expected consumer spending recovery. The top end of the market is outperforming, with brands like Louis Vuitton, Hermès, Loro Piana and Chanel experiencing upward brand momentum. High net worth individuals are driving growth through higher spend per capita. The market is showing an increasing gravitation towards ultra-premium brands, with luxury being more status-oriented in China.

Looking ahead, luxury brands are expected to increase their marketing spend in China, with fashion shows and other events generating significant social media buzz. Brands have been relatively quiet in recent months/years due to COVID-19, but with the situation improving, they are expected to ramp up their marketing efforts in the country.

Overall, the luxury industry is adapting to the changing market conditions and leveraging new opportunities for growth. While some challenges remain, the top end of the market is performing well, and growth is being driven by higher spend per capita among high net worth individuals. As luxury brands increase their marketing efforts, the industry is poised for continued growth in the coming years. Below, a chart from Morgan Stanley Research indicating luxury sector growth from 2022 to 2026.

Thank you Eli Stubley for this note.

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