In 2000, luxury goods sales amounted to just over $100 billion, while in 2023 they exceeded $400 billion. Two were the main drivers of this growth: globalization and the democratization of luxury.
Globalization has allowed luxury brands to expand far beyond the Western elites of New York, London, or Paris, with strong expansion in China and other Asian markets. In 2000, China had only 39,000 millionaires. By 2023, that number had risen to 6 million, an increase that surpassed every other country outside the United States. The Chinese market, which accounted for a small portion of sales in 2000, reached 15% in 2023, making it a focal point for the industry.
“democratisation” of luxury has enabled brands to reach a wider customer base. “Affordable” products, such as Gucci’s $200 white socks, have been created to appeal to a wider range of industry email list consumers, without sacrificing the brand’s appeal. Brands such as Armani and Valentino have launched lower-priced sub-brands that focus on more casual clothing, giving rise to the concept of “affordable” or “aspirational” luxury. Today, a shopper who spends just €2,000 a year on luxury goods represents nearly two-thirds of total sales.
However, this growth model now appears to be under pressure. The middle class in the West has been strained by high interest rates and a sluggish job market, reducing spending power. In China, the housing crisis and government policies against ostentatious displays of wealth have dampened demand. Young Chinese, for example, prefer to carry plastic bags, marking a shift in consumer trends, where frugality is becoming a hallmark.