Luxury Mkt Poised For Transformation As Sustainability, Tech Take Center Stage

Leading brands such as Chanel, Dior, Gucci, and Louis Vuitton dominate the industry, yet 67 percent of the market remains highly fragmented. The United States leads in luxury spending, with projected revenues of $83.3 billion in personal luxury goods by 2028, followed by China

As we move forward, it is anticipated that luxury market will experience significant evolutions, marked by sustainability, technology, and personalisation. Between 2025-2030, the luxury market, with a projection of steady growth across all sectors, will be a testament to social and value transformations.

Revenue in the luxury goods market amounts to $495.16bn in 2025. The market is expected to grow annually by 3.94 per cent (CAGR 2025-2029). The market's largest segment is the luxury watches & Jewellery segment with a market volume of $166.44 billion in 2025. In relation to total population figures, per person revenues of $63.38 are generated in 2025. In the luxury goods market, 13.4 per cent of total revenue will be generated through online sales by 2025.

The global luxury goods market revenue is projected to reach $418.89 billion in 2028.

The forecast for 2027 shows online sales continuing to rise to 18.2 per cent. While offline sales further declined to 81.8 per cent. Reflecting an ongoing shift towards digital channels in the luxury goods market. The global luxury goods market is characterized by the presence of several prominent brands, each holding varying market shares.

The global luxury goods market is characterized by the presence of several prominent brands, each holding varying market shares. Leading the market is Chanel, with a 6 per cent share, followed by Dior at 5 per cent. Gucci and Louis Vuitton each capture 4 per cent of the market. Hermes, Ralph Lauren, and Tommy Hilfiger each hold a 2 per cent share. Several other brands, including Michael, NARS, Prada, Ray-Ban, and SK-II, each account for 1 per cent of the market.

Collectively, these well-known brands comprise a significant portion of the market. However, a substantial 67 per cent of the market is occupied by other brands, indicating a highly fragmented and competitive landscape in the luxury goods sector.

The global luxury goods market exhibits significant revenue contributions from various countries. The United States leads the market with a substantial revenue of $77,820 million. Projections for the coming years indicate continued growth, with the average revenue per capita expected to reach $47.61 in 2024 and $48.93 in 2025.

By 2026, it is anticipated to rise to $50.12, followed by $51.22 in 2027 and $52.36 in 2028. This progression reflects a robust and increasing consumer spending on luxury goods over the forecast period.

Personal luxury goods is the second-largest segment of the luxury industry after luxury cars. Encompassing luxury apparel, accessories, watches, jewellery and eyewear, the revenue of the personal luxury goods market has increased at a steady pace over the past decade, apart from the hiccup caused by the coronavirus (Covid-19) pandemic. The United States is projected to be the market leader in personal luxury goods with a revenue of about 83.3 billion US dollars, followed by China. By 2028, the United States is expected to retain its position as the leading country where the personal luxury goods market generates the highest revenue worldwide. Parallel to this, American nationals make up the leading consumer group when it comes to luxury goods consumption.

The luxury goods market is a dynamic and evolving sector known for high-quality, exclusive products that command luxury and premium prices. Despite challenges such as maintaining brand exclusivity, ensuring sustainability, and navigating complex international regulations, the industry continues to thrive.

Key brands like Louis Vuitton, Hermès, and Chanel lead in market value and consumer trust. The rise of e-commerce and the influence of younger generations, including Millennials and Gen Z, are transforming market dynamics.

Emphasizing corporate social responsibility and sustainable practices has become crucial. Aligning with the values of socially conscious consumers. The sector’s future success depends on innovation, adaptability, and strong consumer engagement.

Today, almost every luxury brand agrees with the fact that “push promotion strategy” is not the way to connect with their audiences. According to forecasted luxury trends of 2025, luxury brand marketers are planning to increase their budgets and tap into “pull marketing” instead. Rather than getting the products in front of the consumers, they will develop a natural interest in their products through relevant content.

The giants in the luxury sector are quickly adapting to this change in consumer sentiments. Take for example, Gucci’s holistic approach towards modern consumers is based on creating a visual language of its brand and maximalism in social media. This is why, as of 2024, Gucci was among the four most valuable luxury brands in the world, in the same league as Hermès, Louis Vuitton, and Chanel.

However, the smaller luxury brands are feeling this economic turbulence more than ever. With the ever-shifting consumer spending habits and cautious purchases, limited marketing budgets are becoming one of the toughest challenges against the luxury trends of 2025.