With emerging countries accounting for almost a third of all luxury products sales globally. Their contribution to growth is even bigger with around three-quarters of luxury industry growth originating from the emerging world. According to an article in FTAdviser "Given the good prospects for emerging markets in the long term, they are already the principal growth driver for western luxury brands and are likely to be even more important in the future".
Despite the current economic woes of some of the luxury brands in some markets, most notably the US, Russia and some parts of Europe, there is certainly a comfort in knowing these brands will 'ride' again. The interest for the classic brands in China, India and the Middle East is intense and therefore bodes will for a strong future investment.
Luxury is a satisfying and profitable business. There is no coincidence that the wealthiest man in France is the CEO of LVMH group. As we have reported many times before here at The MO Down the success of luxury brands is still in the innovation, uniqueness and rarity of their environments and products. The consistent excellence in their service offer and the quality of their products. In addition the most successful companies "have sound balance sheets, which give them the financial capacity to continue to invest in tougher times. Good examples are brands like Hermès and Louis Vuitton for accessories, and Cartier and Omega for watches and jewellery. These brands are expected to continue to show double-digit margins even this year, reflecting their pricing power.", according to the article in FTAdviser.
China is still in its infancy and India relatively untouched, so it would seem the future holds prosperity for luxury brands that continue to deliver. We're definitely on board and look forward to riding on this long wave!
Article By: Melinda O'Rourke