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Strategy Briefing

Luxury Goods in the BRIC Countries: Why They are Still Crucial to the Industry Landscape

55 pages, Jul 2014

US$1,325

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

The rise of emerging markets has been a key defining feature of the luxury goods industry. This feature could not be more apparent than in the BRICs which have been the destination of choice for many luxury brands. International luxury brands continue to navigate challenging operating environments across the BRICs to capitalise on the growing wealth and booming middle classes. This briefing compares and contrasts the luxury goods landscape across the BRICs and assesses a number of key trends.

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Overview

Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

BRICs still offer strong potential

Despite recent concerns about the slowdown experienced in the BRIC economies, these countries continue to command strong appeal, accounting for 12% of the world’s luxury good sales in 2013 and continue to grow.

China leads pack despite government clampdown on extravagant consumption and gifting

China is poised to become the world’s second largest market for luxury goods by 2018, as such, luxury goods companies continue to see great opportunity in capturing rising incomes in China. It accounts for 57% of all sales among the BRIC economies and acts as a template for the next frontier markets.

Second- and third-tier cities grow in importance

As the luxury environment in first-tier cities of the BRIC countries matures, retail development is moving to less-saturated second- and third-tier markets, where rising incomes are fuelling demand.

Social media is key

In the BRICs, word of mouth is key. Luxury and beauty blogs as well as Facebook and Twitter have high profiles in countries such as Brazil, Russia and India. The social media landscape in China however differs from all other BRIC countries due to government regulation. With the large Western social networks unable to operate in the country, local alternatives have become well established.

Challenges remain

Structural challenges include high import duties and luxury taxes for international brands, rolling out internet connectivity from urban to rural areas, consumer attitudes to e- and m- commerce and the associated risk of fraud, understanding fast-changing luxury consumers and implementing a successful operating environment as well as successful strategy.

“Frontier” markets offer future potential

As the BRIC consumers becoming more mature and selective about the luxury products and services they want, many brands are looking beyond the BRICs, into emerging markets that have considerable untapped potential and are poised for increased growth.

What this report includes

Top-level strategic analysis of how major consumer trends will influence global markets
Consumer insight
Impact across all relevant consumer markets
Unique graphics and case studies
Key market snapshots
Accompanying presentation to synthesise main findings

Why buy this report

Identify factors driving change now and in the future
Understand motivation
Forward-looking outlook
Briefings and presentation should provoke lively discussion at senior level
Take a step back from micro trends
Get up to date estimates and comment

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Introduction

Scope

Key findings

Where in the World are the BRICS?

Rise of emerging markets a defining feature of luxury goods

BRICs: Commonalities

BRICs: Differences

BRIC income growth continues to fuel discretionary spending

BRICs push spending, while developed markets pull back

BRICs: Beauty, hard luxury and accessories to lead l uxury g rowth

Are the BRICs m ore or less important to the luxury industry?

Other emerging economies a threat to the BRICs?

BRICs continue to offer growth prospects with high income increases

BRIC differences becoming more apparent

Developed economies benefit from wealthy BRIC tourists

O utbound tourism from BRICs drives luxury in developed markets

Brazil

Brazil a key future consumption hub

Brazil’s smaller cities boost economic growth

Brazil’s youthful demographic fuels luxury demand

Sales of luxury goods on the back of consumer credit

Key factors influencing Brazil’s luxury goods market

Russia

Russian luxury goods market c ontinues r estrained g rowth

Russia’s fragmented market remains a challenge for luxury brands

Russia's high spend per HNWI will keep luxury afloat

Moscow most significant hub of economic activity

International luxury hotspots m agnet for m any affluent Russians

Luxury shopping remains high priority for wealthy Russian tourists

Key factors influencing Russia’s luxury goods market

I ndia

Focus on India

India

India’s g rowing n umber of HNWIs p rovides o pportunity for l uxury

Robust growth in Indian consumer expenditure fuels luxury spend…

…but outlook for luxury growth weighs heavy on reform

India’s aspirational consumers strengthen organised retailing

India’s unequal development in second-tier cities slows luxury growth

Key factors influencing India’s luxury goods market

China

China luxury goods c onsistently o utperforms the g lobal m arket

Second- and third-tier t owns n ext g rowth f rontier in c hina

China’s aspirational male consumer ranks highly in luxury spending

Will “Go West” strategy dilute luxury brand appeal?

100 million wealthy Chinese to form 10% of all globetrotters

Why are Chinese travellers shopping for luxury?

Key factors influencing China’s luxury goods market

Beyond the BRICS

Growth markets beyond the BRICs

Sub-Saharan Africa a clear investment opportunity before 2020

Luxury brands adapt to local markets in order to thrive

Key Takeaways

Key opportunities and challenges

Report Definitions

Luxury goods definitions

Report definition and abbreviations

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Megatrends

Strategy Briefing

Luxury Goods in the BRIC Countries: Why They are Still Crucial to the Industry Landscape

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

BRICs still offer strong potential

China leads pack despite government clampdown on extravagant consumption and gifting

Second- and third-tier cities grow in importance

Social media is key

Challenges remain

“Frontier” markets offer future potential

What this report includes

Why buy this report

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key findings

Where in the World are the BRICS?

Rise of emerging markets a defining feature of luxury goods

BRICs: Commonalities

BRICs: Differences

BRIC income growth continues to fuel discretionary spending

BRICs push spending, while developed markets pull back

BRICs: Beauty, hard luxury and accessories to lead l uxury g rowth

Are the BRICs m ore or less important to the luxury industry?

Other emerging economies a threat to the BRICs?

BRICs continue to offer growth prospects with high income increases

BRIC differences becoming more apparent

Developed economies benefit from wealthy BRIC tourists

O utbound tourism from BRICs drives luxury in developed markets

Brazil

Brazil a key future consumption hub

Brazil’s smaller cities boost economic growth

Brazil’s youthful demographic fuels luxury demand

Sales of luxury goods on the back of consumer credit

Key factors influencing Brazil’s luxury goods market

Russia

Russian luxury goods market c ontinues r estrained g rowth

Russia’s fragmented market remains a challenge for luxury brands

Russia's high spend per HNWI will keep luxury afloat

Moscow most significant hub of economic activity

International luxury hotspots m agnet for m any affluent Russians

Luxury shopping remains high priority for wealthy Russian tourists

Key factors influencing Russia’s luxury goods market

I ndia

Focus on India

India

India’s g rowing n umber of HNWIs p rovides o pportunity for l uxury

Robust growth in Indian consumer expenditure fuels luxury spend…

…but outlook for luxury growth weighs heavy on reform

India’s aspirational consumers strengthen organised retailing

India’s unequal development in second-tier cities slows luxury growth

Key factors influencing India’s luxury goods market

China

China luxury goods c onsistently o utperforms the g lobal m arket

Second- and third-tier t owns n ext g rowth f rontier in c hina

China’s aspirational male consumer ranks highly in luxury spending

Will “Go West” strategy dilute luxury brand appeal?

100 million wealthy Chinese to form 10% of all globetrotters

Why are Chinese travellers shopping for luxury?

Key factors influencing China’s luxury goods market

Beyond the BRICS

Growth markets beyond the BRICs

Sub-Saharan Africa a clear investment opportunity before 2020

Luxury brands adapt to local markets in order to thrive

Key Takeaways

Key opportunities and challenges

Report Definitions

Luxury goods definitions

Report definition and abbreviations

Why buy this report?

Want to find out more about this report?

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