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

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