APAC, US to drive global luxury apparel market growth: report
The APAC luxury market will post a CAGR of 7.9% between 2022 to 2025.
Global luxury apparel market growth will remain high at 10% in 2022, despite slowing down compared to the growth in 2021, which will be driven by boosted by strong domestic demand in the Asia Pacific (APAC) region and the US, according to GlobalData.
Louise Deglise-Favre, an apparel analyst at GlobalData, said APAC and the US demand will be strong despite “mounting economic difficulties,” with the APAC expected to outperform the luxury retail market until 2025 with a compound annual growth rate (CAGR) of 7.9% from 2022 to 2025, compared to 6.7% globally.
“This is due to sustained demand for luxury goods and the investment luxury brands have made through opening stores and targeted marketing campaigns and collections,” Deglise-Favre said.
The US, meanwhile, is resilient as consumers’ disposable income was supported by stimulus cheques in 2020 and 2021, with many of them investing in luxury goods, especially handbags.
The country is experiencing strong growth in 2022 and the next years, with a CAGR of 11.3% between 2020 and 2025 because of the continued demand for aspirational luxury goods.
Globally, the luxury apparel market is expected to reach $149.2b in 2022., with its 10% growth outperforming the global apparel market which is seen to increase by 8.4% in the same period.
GlobalData said the surge in popularity of the luxury apparel products is due to Gen-Z and millennial consumers seeing them as “increasingly aspirational,” with brands like Balenciaga and Louis Vuitton aligning their offers with the younger shoppers.
“Luxury brands have been incorporating more casual and streetwear styles into their ranges, embracing the general casualization trend sweeping the fashion industry,” Deglise-Favre.
She cited Louis Vuitton, Dior, and Gucci which have collaborated with leading sportswear brands like Nike, Adidas, and The North Face on limited-edition collections, adding that these collaborations popular with younger consumers place luxury brands in an “ideal position for growth in the 2022 and beyond.”
“The luxury market is well-positioned in 2022, as the wealth of its core shoppers will protect them from the rising inflationary pressures on their discretionary incomes,” she said.