Growth in Asia-Pacific Luxury Market Driven by Local Millennials and Gen Z

Rising popularity of aspirational luxury products, increasing internet penetration among the local millennials and Gen Z, and the active engagement of brands on social media have combinedly facilitated the growth of the Asia-Pacific (APAC) luxury sales. Leading data and analytics company, GlobalData have found that with this strong growth, 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.

The APAC luxury retail market sales fell by 14.6 percent in 2020, at a loss of $16.1 billion, according to GlobalData’s latest report, ‘Asia Pacific (APAC) Luxury Retailing Market Size, Consumer and Retail Trends, Competitive Landscape and Forecast, 2016-2026’. Covid-19 induced economic uncertainty made consumers wary of making high value purchases which particularly had the worst impact on the brands operating in luxury. However, as vaccination drives opened up retail access, the market bounced back and experienced a growth of 29.7 percent in 2021 to reach $122.0 billion, 10.8 percent above 2019.

Luxury sales brands within the Asia-Pacific region had sales boosted as consumers who would earlier shop luxury items in Europe were no longer able to travel, and shifted their purchases to within the region. 

Brands are hiring regional celebrities to market their products. Some brands are opting to create their own resale platforms, helping the brand to provide a better customer experience and maximise gains from the younger generation’s ongoing trend of buying products that are more accessible and allow them to update their wardrobes more frequently.

“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,” said Retail Analyst at GlobalData, Koyel Ray.