Ultra wealthy to spend more on luxury goods
London, March 6, 2014
The spending of ultra-high-net-worth individuals (UHNWIs) on luxury goods is set to increase globally this year, said a survey.
The Wealth Report’s Attitudes Survey found that over a third of the wealth advisors expected their clients to spend more on luxury goods this year, while only seven per cent predicted a fall in expenditure.
The respondents in Africa were the most bullish about their clients spending activity with almost half anticipating higher levels of luxury purchasing activity, while Europeans were the most cautious, with only 31 per cent expecting an upturn in spending.
A new Luxury Opportunity Index, compiled by leading luxury analyst Ledbury Research, highlighted the top 10 locations around the world with the greatest potential for luxury growth.
Qatar topped the index, followed by UAE and Saudi Arabia in the Middle East, Ghana, US, Kenya, Nigeria, South Africa, Zimbabwe and Mexico.
Andrew Shirley, editor of the Wealth Report, said: “Africa is clearly an exciting growth story at the moment. In many parts of the continent a growing middle class with increasing levels of disposable income is creating new demand for luxury goods and a higher-quality retail experience.”
James Lawson, Ledbury research director, said: “In absolute terms, Asia still has the largest proportion of the world’s luxury brand outlets, but growth is slowing. Many CEOs of global luxury brands are pointing to North America as the most important market for growth over the next five years.”
However, he pointed out that a significant proportion of luxury spending in the US, as in Europe, is now being driven by the growing number of Chinese tourists visiting the country.
“A lot of brands expanded too quickly in China. What they have now realised is that many Chinese consumers like to shop abroad. Prices are cheaper and there is more cachet attached to buying, say, a Gucci handbag in Milan than in Shanghai,” said Lawson.
Although Africa’s luxury industry is still only embryonic, with most major brands restricting themselves to South Africa for now, the sector is keeping a close eye on the continent’s increasing number of UHNWIs, he said.
The survey also found that investments of passion such as art and classic cars are also growing in popularity around the world, with classic cars having grown in value the most (456 per cent) over the past 10 years.
“This performance shows that objects that are beautiful to look at can also make good investments, but markets such as art can be very volatile and the performance of an index will not necessarily be reflected by individual works,” added Shirley. - TradeArabia News Service