Luxury retail stalls as $1.75t market pivots to lifestyle

Jewellery and watches are standout categories. 

Global luxury spending has plateaued, but the real story for retailers lies in where the money is now going, according to industry leaders.

Chanisa Kaewruen, head of creative and innovation at Siam Piwat Co., Ltd., told the Retail Asia Summit held in Thailand that total global luxury industry spending stands at approximately $1.75t (€1.5t).

"The category is not so much on fashion and luxury products anymore, but it is going into more lifestyle-driven sectors," Kaewruen said, pointing to hospitality, dining, and investment assets as the primary beneficiaries of this shift. 

Most notably, she flagged jewellery and watches as a standout category, recording growth of around 15%.

Consumers at the top of the spending pyramid are increasingly seeking meaning alongside their purchases, forcing brands to rethink their value propositions from the ground up.

Kaewruen described Siam Piwat's response to this shift with the launch of The Watch House, a curated platform bringing together more than 30 watchmakers alongside experts and a community of watch investors. 

"It's not just about buying, but it is more about connecting to like-minded people and getting educated about things that they love," she said.

This view was echoed by Oraya Koonlinthip, head of Wealth Segment at The 1, Central Group, who noted that for her organisation, growth amongst high-value consumers has been driven not merely by volume but by depth of engagement. 

She revealed that The 1 Exclusive's top-tier members — representing just 1% of the total database — spend 40 times more than the average customer and visit across multiple business units twice a week.

Ratikorn Kaewpichai, chief commercial officer of the Fashion Business Unit at The Thai Silk Company Limited (Jim Thompson), added that the shift away from purely transactional luxury was reshaping brand strategy at the product level. 

The 75-year-old heritage brand, historically known as a gifting label, is actively repositioning itself as a premium lifestyle brand.

"Gifting, if it is only functional and feasible, the value is very low," Kaewpichai noted, underscoring the challenge facing legacy brands that have not yet made the pivot.

Moderating the session, Leona Tan, Principal at Kearney, framed the stabilisation of luxury spending not as a warning sign but as a maturation of the market — one that rewards retailers who move early to capture the lifestyle-driven categories gaining momentum.

"Markets like Asia's local distribution have been growing a lot, so that contribution has been coming to our region much more," Kaewruen added.