MILAN (Reuters) - Luxury goods consumers around the world will spend 880 billion euros ($1.2 trillion) on personal items and experiences like holidays a year in 2020, 20 percent more than is spent on such goods today, a study said on Tuesday.
There are currently 380 million luxury goods consumers and this number is set to rise to 440 million in 2020, according to a study conducted by Italian luxury goods association Altagamma and consultancy Boston Consulting Group.
The study found two-thirds of the growth in the luxury market over the next decade will be organic as sales volumes generated in the same stores rise year-on-year.
The biggest proportion of luxury shoppers - dubbed “core” consumers by Altagamma and Bain - spend on average 10,000 euros ($13,700) a year on luxury goods excluding cars and make up 40 percent of the market.
Most of the new core consumers will come from China, according to the study, which was conducted based on 40,000 interviews with consumers in more than 20 countries.
Meanwhile, among the established markets for luxury goods, such as the United States, the European Union and Japan, around one million consumers will become “disaffected” and drastically reduce their spending, putting at risk around 4 billion euros of revenues for luxury goods companies.
“Intrinsic” values of craftsmanship, quality and exclusivity have returned to being the most important factors behind a luxury purchase, influencing around 70 percent of purchases among the people surveyed. More than 80 percent of consumers surveyed now check the origin of a product.
Men have become keener buyers of luxury goods, the study found, and one man in four surveyed now buys jewelry, handbags, perfume and cosmetics for himself.
Romance is not dead, however, and 70 percent of gifts - which overall account for about a third of purchases - are made by men, for personal rather than business reasons.
Around 50 percent of luxury goods purchases are made outside the shopper’s home country, motivated by better prices and more choice. In order to be chosen abroad, however, the brand still needs to be known by the buyer at home.
Reporting by Isla Binnie, editing by David Evans