A 20 percent increase in global spending by luxury consumers has been forecast for 2020, according to a study by Boston Consulting Group and Altagamma, an Italian luxury goods association.
The biggest spending will occur in the U.S., then China, the E.U. and the Middle East.
The study, reported by Reuters, predicted luxury spending on personal goods and services will hit 880 billion euros ($1.2 trillion). Researchers conducted 40,000 interviews among consumers in some 20 countries for the study.
E-commerce sales are expected to hit 15 percent of all luxury goods sales, according to the study, up from today’s 5 percent.
Buyers of luxury goods worldwide now number close to 380 million, according to estimates. By 2020, another 60 million people will be added to the international population of big spenders, bringing the total to 440 million, a sizeable consumer base for luxury items and services.
Most of the new luxury will come from China and they will likely be the biggest spenders, according to the study. Some 40 percent of the luxury consumer market is made up of these top spenders–a group of consumers designated in the study as “core” buyers–which spend an average of 10,000 euros ($13,700) annually.
Same store sales volume is expected to account for about 67 percent of the growth, as revenues increase year-over-year over the next six years, the study predicted.
As usual, quality, craftsmanship and exclusivity are the principal features of the luxury items most frequently bought. An increasing numbers of consumers, the study showed, are also scrutinizing labels and product information to see where the goods were manufactured. High fashion from Italy also attracts luxury buyers.
Although the outlook for luxury spending is bullish, such spending has declined in the U.S., E.U. and Japan, with one million consumers dropping out of the luxury market.
The resulting loss of these former luxury buyers could account for a 4 billion euro ($5.4 billion) dip in revenues for firms selling luxury products.
The study also revealed that men are increasingly buying luxury goods both as gifts and for themselves, and about half of luxury purchases are transacted in foreign locations–outside the U.S. and in countries other than the consumers’ home base where low prices, wider selections and established brands are available.