Luxury spending on the rise in Asia
The luxury industry is to expand 20% this year in Asia as destinations such as Singapore benefit from increased tourism and demand rises in Malaysia and Indonesia
Growth in spending on luxury goods will continue this year as increasing demand in southeast Asia offsets a slowdown in China and Europe, according to a study by Bain & Co. Worldwide luxury sales are tipped to grow 4%-5% to around u222bn, excluding currency shifts, compared with 5% growth in 2012.
The industry will expand 20% this year in southeast Asia on a currency-neutral basis as destinations such as Singapore benefit from increased tourism. Demand for luxury goods is also rising in Malaysia and Indonesia.
In Europe, sales are stalling as Chinese travellers reduce spending due to higher prices. Meanwhile, domestic European consumption has not yet recovered. Sales are expected to rise about 7% in China (about a third of 2012’s rate). In the Americas, demand in Brazil and Mexico will help boost spending up to 7%. There is also room for growth in the US.
In Japan, the yen’s depreciation will boost domestic luxury consumption about 10% in 2013, leading to a 30%-40% drop in Japanese spending abroad. Longer term, the luxury-goods market will grow an average 5%-6% a year to 2015, excluding currency moves, according to Bain estimates.