Millennials, Gen Z to drive luxury market growth in APAC: GlobalData
Millennial and Gen Z locals are forecast to drive luxury market growth in the Asia-Pacific region, according to GlobalData, as internet penetration levels and social media brand engagement increases in the region post-pandemic.
According to GlobalData’s latest report, ‘Asia-Pacific Luxury Retailing Market Size, Consumer and Retail Trends, Competitive Landscape and Forecast, 2016-2026’, sales in the APAC luxury retail market fell by 14.6% in 2020 – a loss of $16.1 billion – as Covid-19 induced economic uncertainty made local consumers wary of making high value purchases which particularly affected luxury brands.
However, the luxury APAC market bounced back and experienced a growth of 29.7% in 2021 to reach $122 billion, 10.8% above 2019, as vaccination drives opened up the retail access besides consumer confidence.
With strong growth in the APAC region returning, brands are now seeking a deeper level of connection with luxury consumers and are adopting strategies to engage with local consumers, particularly the younger population, according to GlobalData.
"Despite the disruption, the Covid-19 pandemic had a positive impact on sales in 2021 in the region, as consumers who were earlier shopping luxury items from Europe were now unable to travel and thus shifted their purchases to brands that were available in the region, boosting luxury sales in the APAC region," said Koyel Ray, retail analyst at GlobalData.
"Brands are hiring regional celebrities to market their products and adopting strategies such as livestream commerce events which are in vogue in the region.’’
Moreover, brands are launching resale platforms, which will help provide a better customer experience and maximise gains from the ongoing trend of the younger generation looking to buy products that are more accessible and allow them to update their wardrobes more frequently, added the report. And, brands are increasingly looking to digital collections to attractive a digital clientele.
“Luxury retailers in the APAC are now leveraging NFTs as a lucrative source of secondary revenue," said Ray.
"Brands are targeting the young, affluent APAC consumers who are likely to invest in digital tokens like the NFTs and bitcoin and selling digital tokens of their iconic products. Brands are reducing their dependence on traditional sources of revenue as the young and affluent luxury consumer is looking towards the metaverse as their second life, making it an important place for trade of luxury goods.”
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