By Andy Sambidge
Bain & Co report says shoppers in region have highest per capital spending in the world
Middle East consumers have the highest per capita spending on luxury goods in the world at about $1,900, accrording to a new report from Bain & Company.
Luxury goods sectors favoured by the region's spenders include leather goods, watches, cars and overseas holidays, while Dubai retains its title as the biggest market, the report added.
Globally, Bain and Co said the number of luxury consumers has more than tripled over the past 20 years, from roughly 90 million in 1995 to 330 million at the end of 2013.
Cyrille Fabre, Bain & Company partner who leads the Retail & Consumer Products practice for the Middle East, said: "Middle East consumers have the highest per capita spending on luxury goods, at about EUR1,400 ($1,928) per year.
"The vibrancy of this market, however, has given light to a more cautious spending consumer, who shows high preference for well-known brands and logos. Their key luxury categories include leather goods, watches, cars and overseas holidays - with Dubai remaining the biggest market in the region with almost 30 per cent of the total market share," Fabre added.
According to the report, a net total of 10 million additional consumers enter the luxury market yearly.
The number of luxury consumers is expected to reach an estimated 400 million worldwide by 2020 and 500 million by 2030.
In its analysis of approximately 10,000 luxury consumers, the report found significant differences within the global luxury market and its consumer base, which is shifting from a historically-homogenous base of affluent consumers worldwide to a broader and highly heterogeneous class of luxury shoppers.
"The race is on to capture an explosion in worldwide luxury consumer growth," said Claudia D'Arpizio, Bain partner in Milan and lead author of the report.
"But the luxury consumer of the future will become increasingly heterogeneous and luxury brands and operators need an immediate upgrade to their consumer strategies in response to this growing diversity, or else risk falling behind."
Within the luxury segment's current 330 million consumer base, 55 percent (180 million) shift between luxury and merely 'premium' purchases, including products such as designer second lines, beauty products, and small accessories.
The report said the remaining 45 percent (150 million) represent 'true luxury consumers' who consistently dedicate part of their discretionary spending to personal luxury products of various nature, usage occasions and price point and make up roughly 90 percent of global spending, purchasing an average of EUR1,250 per capita annually.