What are the prospects in the luxury sector?

Simon-Kucher , a global strategy consultancy, presents a recent international research on the luxury sector, highlighting a landscape in profound evolution between new expanding geographies, transformations in purchasing behaviors and growing pressures on supply chains and brands. Among the evidence that emerges, the strong growth expected for India and Singapore and the growing role of the new generations in the transformation of the sector.

Global growth driven by Asia and experiential luxury

Between 2024 and 2029, Singapore (+6.1% CAGR) and India (+5.9% CAGR) remain the two markets with the highest growth potential, followed by Australia (+4.6% CAGR), UAE (+4.5% CAGR), USA (+3.5% CAGR) and China (+3.3% CAGR).

In terms of categories, there is a clear rise in experiential luxury – travel, hospitality, exclusive events – and leather goods (+5.5% CAGR), followed by jewelry (+4.1% CAGR) and ready-to-wear (+2.1% CAGR), with the automotive sector at the bottom of the list (+1.7% CAGR).

India protagonist of the new luxury map

India is emerging as a new protagonist in the luxury panorama , driven by a growing propensity to spend: in the last 24 months, 2/3 of Indian consumers have spent more than 20,000 euros on luxury goods and 84% plan to further increase their budget in the next 12. The market also stands out for its preference for multi-brand platforms, less loyalty to individual brands and a strong focus on the symbolic and social value of the purchase (25% indicate social status as a driving factor).

Consumers are more digital and attentive to sustainability

The new generations – Gen Z and Millennials – are rewriting the rules of the industry. Their influence is reflected in the growing demand for transparency, sustainability and the acceleration of digitalization. Digital channels are growing, especially in India, where less than 50% of consumers still buy in physical stores, unlike Europe , the USA and China where about 70% still prefer the physical experience.

New consumer profiles

The research identifies seven consumer profiles that define the new purchasing logics:

• Icons Collector (the majority of which is found in the USA, equal to 41% of consumers): they buy occasionally, they prefer a few iconic pieces from famous and “hand made” brands. They prefer to buy “timeless” goods rather than follow the fashions of the moment.
• Fashion Forward Icons (mostly in China, 39% of consumers): They are very fashion-conscious and frequently purchase luxury goods.
• Power Patrons (26% of Indian consumers): they prefer regular purchases, mainly from elite brands, combining iconic products and limited editions to affirm their social status.
• Quiet Luxury Enthusiast (27% of European consumers): characterized by minimal elegance. They prefer discreet brands and “timeless” elegance.
• Statement Collector: They look for unique and significant pieces, they buy infrequently and they pay attention to the iconicity of the products.
• Status Shopper: Inspired by influencers, they buy a few trendy products but are price-conscious.
• Bespoke Aficionado: they buy infrequently but in larger quantities. They prefer high-quality and “hand made” products and are attentive to the personalized experience.

Price, Value Perception and Customer Service Under Observation

Despite the pursuit of quality and uniqueness, price remains an important driver in Europe and the US , where over 75% of consumers compare prices between different brands.

In India and the US , 60% report a perceived increase in prices (especially for cars and jewellery), while in China the impact appears marginal.

A third of American consumers complain about a decline in value for money, with the exception of watches, which are still perceived as a worthy investment.

Furthermore, there is growing dissatisfaction with customer experience : 38% of US consumers say they are disappointed by the customer service of luxury brands, highlighting the urgent need for greater attention to the relationship.

“To successfully navigate this new era of luxury, brands are called to redefine their values ​​in an authentic way, aligning them with the needs and expectations of a rapidly evolving clientele,” comments Francesco Fiorese, Managing Partner of Simon-Kucher. “It is essential to differentiate customer service, communication channels and messages based on different consumer profiles, building personalized experiences."

“In this context, strategic partnerships play a key role, with particular attention to shared values ​​and storytelling,” continues Marco Torino, senior director of Simon-Kucher . “The definition of a pricing strategy consistent with the perceived value of the brand, together with the ability to offer distinctive experiences, will become essential competitive assets. Finally, to conquer younger targets, it is essential to integrate sustainability and digitalization as structural and not accessory elements of the value proposition.”