The global luxury fashion market is projected to exhibit a CAGR of 3.59% during the forecast period of 2021 to 2028.
Ralph Lauren (US), Capri Holdings Limited (US), PVH Corp. (US), Kering (France), LVMH (France), Inditex (Spain), Giorgio Armani S.P.A. (Italy), Chanel S.A. (France), Dolce & Gabbana (Italy), and Burberry Ltd (UK)as the key players in the global luxury fashion market.
Market Highlights
The global luxury fashion market is projected to be valued at USD 333,775.3 million by 2028, recording a CAGR of 3.59% during the forecast period. The global luxury fashion market has been growing over the last few years and is projected to reach USD 333,775.3 million by 2028 at a CAGR of 3.59% from 2021 to 2028. The significant reasons for the growth of the global luxury fashion market are increasing per capita disposable income, social media promotions and celebrity endorsements, and the growth of the organized retail sector in Asia-Pacific. Moreover, strategic mergers & acquisitions and increased demand for sustainable and recycled collections are expected to be prime opportunities for market players. However, a limited customer base and the rising threat of counterfeit products are expected to hamper the global luxury fashion market in the years to come.
Strict containment measures imposed by the governments of various countries and preventive measures to control the impact of the outbreak have led to significant restrictions in transportations, driving a knock-on effect globally. Transportation is crucial in the supply chain of any market, as it is responsible for transferring the raw materials to manufacturers and then distribute the final product from the manufacturers to the retail market. The pandemic had brought the transportation of goods to a near halt across the globe to stop the spread of the virus. The supply chain of luxury fashion products mainly includes specialty stores and e-commerce linked logistic suppliers. In these unprecedented times, low working efficiency and lockdown in various regions have witnessed delays in product delivery. Many logistics companies were operating at low efficiency with very few working staff, which led to the disruption of the supply chain. The low efficiency of e-commerce websites and logistics companies’ delivery systems and disruptions in international and modern trade has severely impacted the supply chain of the luxury fashion market.
Segmental Analysis
The global luxury fashion market has been segmented based on product type, end user, distribution channel, and region.
Based on product type, the global luxury fashion market has been segmented into clothing & apparel, footwear, and accessories. The clothing & apparel segment is further broken down into jackets & coats, skirts, shirts & t-shirts, dresses, trousers & shorts, denim, underwear & lingerie, and others. The accessories segment is further classified as gems & jewelry, belts, bags, watches, and others. The clothing & apparel segment accounted for the largest market share of 42.13% in 2020 and is projected to register the highest CAGR of 3.67% during the forecast period. The accessories segment is the second-largest and is valued at USD 93,322.8 million in 2020. Consumers seek more variety in their clothing than any other product. Millennial and Gen Z consumers have always strongly emphasized their appearances, which drives the growth of this segment. Constant innovation in styles and patterns of clothing & apparel by the luxury fashion brand manufacturers further boosts the demand for the luxury clothing & apparel segment.
Based on end user, the global luxury fashion market has been segmented into men, women, and unisex. The women segment accounted for the largest market share of 57.04% in 2020 and is projected to register a decent CAGR of 3.63% during the forecast period. However, the unisex segment is expected to register the highest CAGR of 3.67% during the forecast period. An increase in the working women population, high disposable income, and inclination towards luxury fashion as a status symbol has boosted the segment growth.
Based on distribution channel, the global luxury fashion market has been segmented into store-based and non-store-based. The store-based sub-segment is further classified as supermarkets & hypermarkets, specialty stores, and others. The store-based segment accounted for a larger market share of 87.12% in 2020. However, the non-store-based segment is expected to register a higher CAGR of 4.55% during the forecast period. The store-based segment has been divided into supermarkets & hypermarkets, specialty stores, and others. The supermarkets & hypermarkets sub-segment is expected to be the largest in 2020. These channels account for the maximum sale of luxury fashion through the convenience of various brands under one roof. The specialty stores sub-segment is projected to register the highest CAGR during the review period.
Regional Analysis
In terms of region, the global luxury fashion market has been categorized as North America, Europe, Asia-Pacific, South America, and the Middle East &Africa. As per CRI analysis, Europe constituted a dominant share of the luxury fashion market in 2020. The native people of North America are diverse in terms of culture, language, and ecological adaptations to various environments. This variation is expressed in the attire that they wear. The impact of digital influencers has changed the marketing strategies of legacy brands where traditionally they relied on storytelling to market their brands, and now, they are relying on social media as one of the most viable and expedient ways to showcase their brand values. Also, North Americans rely on brands that share their values in terms of authenticity, transparency, and sustainability. More than the product, the new-age consumers build an emotional connection to the brand, leading to brand loyalty.
With the growing geriatric population, fashion brands also focus on older generations to increase their consumer base and boost the overall North American luxury fashion market. Europe is the origin for international luxury brands as there is a culture of technical excellence. For instance, Swiss watch making has no technical equivalent worldwide. Similarly, Italy is popular for its high-end fashion and apparel, where the ‘Made in Italy’ logo equates to high quality. The luxury accessories made in Italy command premium prices across the globe. In the present world, people are wearing a mix of brands from different regions. There is constant experimentation of an eclectic mix of fashion and luxury brands among the high-end consumers who are typically loyal to luxury brands.
The evolution of the consumer group and rapid Internet adoption contribute to the sales of luxury items in the region. Asia-Pacific is one of the most lucrative markets of luxury fashion. It accounted for a 21.45% market share in the global luxury fashion market. The regional market is projected to expand at a CAGR of 4.23% during the forecast period. The growth of the luxury fashion market in Asia-Pacific is attributed to several factors, such as rapid urbanization in emerging economies and increasing population. The rising per capita disposable income acts as a significant factor for the growth of the luxury fashion market.
Furthermore, the luxury fashion market in Asia-Pacific is growing due to the proliferation of boutique luxury brands, rapidly changing consumer trends, and the shift from physical stores to digital stores. The Rest of the World (RoW) consists of South America, the Middle East, and Africa. The regional market accounted for an 8.54% market share in 2020 and is projected to register a CAGR of 3.91% during the forecast period. The growth of the luxury fashion market is anticipated to be driven by several factors, such as the changing lifestyles of the consumers and new product developments. Key market players are also promoting their products to create strong awareness among consumers. Rising per capita disposable income and product launches are expected to fuel the demand for luxury fashion in the region.
Key Findings of the Study:
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- The clothing & apparel segment accounted for the largest market share of 42.13% in 2020 and is projected to register the highest CAGR of 3.67% during the forecast period.
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- The women segment accounted for the largest market share of 57.04% in 2020 and is projected to register a decent CAGR of 3.63% during the forecast period. However, the unisex segment is expected to register the highest CAGR of 3.67% during the forecast period.
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- The store-based segment accounted for a larger market share of 87.12% in 2020. However, the non-store-based segment is expected to register a higher CAGR of 4.55% during the forecast period.