Luxury Fashion Market Research Report - Global Forecast till 2028

Luxury Fashion Market: Information by Product Type (Clothing & Apparel, Footwear, and Accessories), by End User (Men, Women, and Unisex), by Distribution Channel (Store-Based and Non-Store Based), and Region (North America, Europe,Asia-Pacific, Rest of the World)—Forecast till 2028

ID: MRFR/CR/1238-CR | February 2021 | Region: Global | 110 Pages         

Luxury Fashion Market

Luxury Fashion Market is expected to grow at a 3.59% CAGR and reach USD 333.8 billion by 2028.

Segmentation

By Product Type Clothing & Apparel Footwear Accessories
By End User Men Women Unisex
By Distribution Channel Store-Based Non-Store Based

Key Players

  • 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)
  • Burberry Ltd. (UK)

Drivers

  • Increasing Per Capita Disposable Income
  • Social Media Promotions and Celebrity Endorsements
Speak to Analyst Request a Free Sample

Luxury Fashion Market Overview


The luxury fashion market can anticipate expansion at a rate of 3.59% between 2021 and 2028, believes MRFR (Market Research Future). By 2028, MRFR expects the market size to be around USD 333.8 billion.


The Gen Z and Millennials population are the primary end-users of luxury fashion and are responsible for the business growth. Their rising focus on style, high willingness to spend more on premium items, and desire to experiment with new products elevates their position as prime end-users in the market. Psycho-graphical as well as demographical parameters of the end-users have evolved dramatically in the past few years. With the rise in internet penetration, high rate of smartphone ownership, and the surge in social media influence over consumers allow them to reach informed decisions while purchasing. This factor encourages the global market growth to a huge extent.


However, the fashion sector has taken a massive blow from the COVID-19 outbreak; given the dramatic turn in consumer sentiment. Consumers now are more focused on purchasing essential items, pushing a lot of fashion brands to even shut down their retail stores. As a result, majority of the luxury fashion brands are shifting their focus on digital solutions. In-store shopping is now no longer a feasible option; therefore, luxury fashion brands are making their online stores more accessible to customers. Chatbots, and various digital solutions are being used by these brands to provide a highly personalized shopping experience, resulting in better customer satisfaction as well as sales. Needless to say, e-commerce/online shopping sites have emerged as major opportunities for the top brands.


COVID-19 Impact Analysis


As a measure to limit the spread of the coronavirus, various governments across the world have restricted the gathering of more than ten people in a closed space, and many manufacturers were ordered to shut down their production facilities. Procurement of the raw materials became a cause of concern for the manufacturers owing to the urgent measures taken across the globe to control the spread of the COVID-19, impacting the logistics. The outbreak of the COVID-19 pandemic and subsequent adoption of lockdown strategies in many countries have restricted the availability of labor to carry out the production process. To fight the pandemic, the whole world was under lockdown. Thus, there were some urgent measures taken by the government of various countries, such as physical distancing and limitation of transportation to fight surge ability.


The worldwide lockdown has certainly affected the production of luxury fashion products. Following state and regional guidelines, manufacturers have implemented extensive measures to protect the health and safety of their employees. Many global manufacturers have temporarily closed their operations or limited the production capacity of their products. This scenario has also affected the manufacturers financially, and they are strategizing their operations to survive the pandemic with minimal losses.


Market Dynamics


The luxury fashion market is expected to register a CAGR of 3.59% during the review period. Several factors are driving the growth of the market. The increasing per capita disposable income across the globe is majorly driving the market growth. Social media promotions and celebrity endorsements also contribute significantly to the luxury fashion market growth. The growth of the organized retail sector in Asia-Pacific further boosts the growth of the market. However, a limited customer base owing to the high prices of the products is expected to restrain the market growth. Furthermore, the rising threat of counterfeit products poses a challenge for the market players. Nevertheless, strategic mergers and acquisitions and the increasing demand for sustainable and recycled collections create an opportunistic market for the players in the luxury fashion industry.


Drivers:



  • Increasing Per Capita Disposable Income


Disposable income is the personal income of households left after paying income taxes, which is available for spending and saving. The rising per capita disposable income of people across the globe, especially the emerging economies, is boosting the demand for luxury fashion in the global market. The standard of living of people is improving due to their rising disposable income, propelling them to opt for luxury products as a symbol of status.


The rising living standard of consumers is increasing their aspiration to enhance their appearance with luxury fashion products such as luxury clothing, watches, jewelry, and footwear. Furthermore, the rise in the number of High-Net-Worth Individuals (HNWIs) and affluent consumers drive the growth of the luxury fashion market. The individuals with a total net worth of more than USD 1 million are categorized as HNWIs. The US had 5.9 million HNWIs in 2021, which is almost 11% higher than in 2018. The US, Japan, Germany, and China are among the major countries with an HNWI population. Moreover, rapid urbanization in emerging countries and an increasing working population lead to improved economies for various countries, thereby driving the growth of the luxury fashion market.



  • Social Media Promotions and Celebrity Endorsements


Promotion plays a vital role in increasing the sales of luxury fashion; celebrity endorsements also significantly influence consumer buying decisions. Celebrities are extremely valuable to brands, especially in the luxury fashion industry. They exert enormous power in fashion circles and can contribute to making and breaking brands. Celebrities have been used to endorse luxury brands for years. Moreover, product promotion through various celebrities on social media through their blogs and videos highly influences customers. Social media provides a potential opportunity for product launches and branding to bridge the gap between marketers and consumers.


The explosion of social media has transformed the business environment, creating new opportunities for market players. There are continuous blogs and live streams on social networking sites such as Facebook, Instagram, Twitter, and YouTube. Manufacturers use social media to promote their brand and build relationships with customers by offering exclusive advice and offers. There is a continuous rise in the amount of social media content dedicated to the fashion industry. Social media plays a critical role in driving the demand for luxury fashion, especially among the youth, who actively participate in social media for information nowadays. Thus, blogs posted on social media platforms in favor of luxury brands are highly influencing the growth of the market.

Restraint:



  • Limited Customer Base


Luxury fashion manufacturers incorporate the best materials and employ the most skilled craftspeople. The production process and raw materials used in luxury fashion widely differ from fast fashion. Luxury fashion is based on sourcing high-quality fabrics, and no corners are cut in the printing and dyeing process as they tend to be in fast fashion. Luxury brands ensure that their high standards are adhered to at every step of the production process. This is the primary reason for the higher prices of luxury fashion products. However, since a majority of the global population is price sensitive, the high prices narrow down the customer base for luxury fashion brands. With changing fashion trends, fast fashion is preferred by the price-sensitive customer base. Furthermore, the high prices of luxury brands create obstacles for repeat purchases even among their loyal customers, which affects the market's sales volume. Thus, these factors associated with a limited customer base restrict the luxury fashion market growth.

Opportunities:



  • Strategic Mergers and Acquisitions


The luxury fashion market is almost saturated with the presence of established brands, who compete against each other intensely to secure a larger customer base. Furthermore, mergers and acquisitions are gaining traction in the field of luxury fashion. In the last few years, luxury fashion has witnessed quite a few strategic mergers and acquisitions which assist in driving the market growth. For instance, in January 2021, the world's leading luxury products group LVMH acquired Tiffany & Co., the global luxury jeweler. The addition of Tiffany's to its global brand has helped LVMH to bolster its jewelry branch and expanded the brand's exposure to luxury consumers in the US. Also, following Tiffany's takeover, the share prices of luxury brands across the world, such as Huge Boss, Mulberry, and Burberry, soared.

Challenge:



  • Rising Threat of Counterfeit Products


With the increasing demand for luxury fashion, manufacturers are finding it difficult to ban counterfeit products. The counterfeit products of luxury brands affect the actual brands in terms of revenue and dampen the brand goodwill. It is difficult to identify the difference between a fake product and a genuine one. Counterfeiters keep the prices lower than genuine products to attract the price-sensitive population.


Segment Overview By Product Type



  • Based on product type, the 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 in 2021 and is projected to register the highest CAGR during the forecast period.


By End-User



  • 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 in 2021 and is projected to register a decent CAGR during the forecast period. However, the unisex segment is expected to register the highest CAGR during the forecast period.


By Distribution Channel



  • Based on distribution channels, 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 the larger market share in 2021. However, the non-store-based segment is expected to register the higher CAGR during the forecast period.


Global Luxury Fashion Market Share, by Region, 2021 (%)

Global Luxury Fashion Market Share by Region 2020

Source: MRFR Analysis



Regional Analysis



  • By region, the global luxury fashion market has been divided into North America, Europe, Asia-Pacific, South America, and the Middle East & Africa. Europe accounted for the largest market share of 38.63% in 2021, with a market value of USD 97,368.2 million; the market is expected to register a CAGR of 3.42%. North America was the second-largest market in 2021, valued at USD 79,071.3 million; the market is projected to exhibit a CAGR of 3.27%. However, the market in Asia-Pacific is expected to register the highest CAGR of 4.23% during the forecast period.


North America Market



  • North America held a market share of 31.37% in 2021 and is expected to register a CAGR of 3.27% during the forecast period. 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. Most of the population in North America perceive luxury products as synonymous with quality, exclusivity, and rarity. The increasing rate of millennial spending and the arrival of digital and niche-born brands are further diversifying luxury fashion in the region. The prime growth engine of the luxury fashion market in North America is the shift in a generation where 83% of the luxury growth in 2021 is fueled by Gen Y and Gen Z. The new generation is low on patience and are inclined more towards speed and convenience, which is creating a tremendous growth rate in the fashion industry.


Asia-Pacific Market



  • Asia-Pacific is one of the most lucrative regions among the manufacturers of luxury fashion. It accounted for a 21.45% market share in the global luxury fashion market. The market in the region is projected to increase 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 increasing population and rapid urbanization in emerging economies. 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. China holds the largest share in the Asia-Pacific luxury fashion market.


Competitive Landscape



  • The key players operating in the global luxury fashion market include 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). The market comprises tier-1 players along with some local players with diverse product portfolios. Companies such as Ralph Lauren (US), Capri Holdings Limited (US), PVH Corp. (US), Kering (France), and LVMH (France) dominate the market due to brand reputation, product differentiation, financial stability, and strong distribution network. The players are focused on lowering their environmental footprint and investing in research and development and strategic growth initiatives such as acquisitions and product launches to strengthen their market position and capture a large consumer base.


Recent Developments


February 2022


LePodium, a renowned luxury fashion developer has launched its latest platform in France. This platform has been developed for shoppers’ ease of use, with them now able to conveniently filter searches as per their needs. The filters vary based on category, style, type of material, color, brand, and others. With almost every type of luxury clothing, from accessories, bags, perfumes, lingerie, and designer brands such as Prada, Balenciaga, Gucci, Marc Jacobs, Burberry, Kenzo, Jimmy Choo, Alexander Wang, Dior, and Chanel, shoppers will be spoilt for choice with the wide collection.


March 2022


LIORE’e, a baby luxury accessories designer company from New York is launching its latest line of luxury baby clothes in Dubai. The latest collection will be addition to the brand’s already acclaimed and popular babies’ luxury accessories including rhinestone and pearl-accented pacifiers, bottle tops, pacifier clips, matching headbands, tiny toddler shoes, and many more.


Scope of the Report Global Luxury Fashion Market, by Product Type



  • Clothing & Apparel


    • Jackets & Coats

    • Skirts

    • Shirts & T-Shirts

    • Dresses

    • Trousers & Shorts

    • Denim

    • Underwear & Lingerie

    • Others


  • Footwear

  • Accessories


    • Gems & Jewelry

    • Belts

    • Bags

    • Watches

    • Others



Global Luxury Fashion Market, by End User



  • Men

  • Women

  • Unisex


Luxury Fashion Market, by Distribution Channel



  • Store-Based


    • Supermarkets & Hypermarkets

    • Specialty Stores

    • Others


  • Non-Store-Based


Luxury Fashion Market, by region



  • North America


    • US

    • Canada

    • Mexico


  • Europe


    • UK

    • Germany

    • France

    • Italy

    • Spain

    • Rest of Europe


  • Asia-Pacific


    • China

    • India

    • Japan

    • Australia and New Zealand

    • Rest of Asia-Pacific


  • Rest of the World


    • South America

    • Middle East

    • Africa



Intended Audience



  • Luxury Fashion manufacturers

  • Raw Material Suppliers

  • Distributors

  • Governments, Associations, and Industrial Bodies

  • Investors and Trade Experts



Report Scope:

Report Attribute/Metric Details
  Market Size    USD 333.8 Billion
  CAGR   3.59% (2021-2028)
  Base Year   2020
  Forecast Period   2021-2028
  Historical Data   2019
  Forecast Units    Value (USD Billion)
  Report Coverage    Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
  Segments Covered   By Product Type, By End User, By Distribution Channel and Region
  Geographies Covered    North America, Europe, Asia-Pacific, and Rest of the World (RoW)
  Key Vendors   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), Burberry Ltd. (UK)
  Key Market Opportunities   Social Media Promotions and Celebrity Endorsements
  Key Market Drivers   Increasing Per Capita Disposable Income


Speak to Analyst Ask for Customization

Frequently Asked Questions (FAQ) :

The Key players of the market are Shiseido company, Louis Vuitton, Ralph Lauren, Financiere Richemont, Loreal group, Kering SA and The Estee lauder.

Consumer spending from the wealthy society is the crucial driver for the market. Also, attractive promotional methods are another crucial drives.