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Luxury Forecast: wealthiest customers will increase their spending by 2024

By Bettina Bush Mignanego22 août 2023

According to the 9th edition of Altagamma Consumer and Retail Insight, the wealthiest customers in the luxury market will increase their spending by 2024. Out of 370 million high-end consumers, 20 million will be very active. China will lead this trend with strong local demand, followed by the United States, while Europe will be notably more cautious.

Altagamma Consumer and Retail Insight forecasts significant growth for the luxury goods market in 2023, with notable changes in consumer habits and a move towards more exclusive retail experiences (Shutterstock)

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Forecast for the Middle East luxury consumer market in 2030

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The value that Millennials and GenZ represent for the industry in 2022

82%

of total spending in China in 2023 will be attributed to local demand

The "Altagamma Consumer and Retail Insight" edition, prepared by the Boston Consulting Group in collaboration with Altagamma, was published last July. According to Guia Ricci of the Boston Consulting Group, two scenarios are emerging: one projecting a 7.9% growth in 2023 compared to 2022 with a cautious outlook on China, the other more optimistic between 11% and 13%, driven by a strong luxury market recovery in China and increased consumer confidence in the United States. It's noteworthy that 68% of Chinese luxury product consumers are willing to spend more within mainland China as the advantages of overseas shopping (such as prices and product ranges) gradually decrease. "The high-end consumer has double figures increasing propensity to spend. The number of points of sale is stable but with a significant increase in size and with the creation of unique experiences that are increasingly personalized and exclusive," notes Matteo Lunelli, President of Altagamma. Consumer habits, values, and omnichannel distribution methods are evolving, while new collaboration and consolidation strategies upstream and downstream in the supply chain are emerging.

The Middle East, and Saudi Arabia in particular, is experiencing rapid growth in the luxury goods sector, which is expected to double to 30 billion euros by 2030, supported by significant investments and expansion projects in Riyadh (Shutterstock)

Saudi Arabia: a growing market

The market is strongly evolving due to the significance of the Middle East. This geographical area is increasingly attracting high-end brands, with the luxury sector currently valued at 15 billion euros. This figure is expected to double to 30 billion euros by 2030, driven in particular by the growing importance of Saudi Arabia. "The Middle East is one of the new frontiers of luxury," explains Filippo Bianchi of the Boston Consulting Group, “especially Saudi Arabia, which has developed very few luxury-dedicated commercial spaces until now. The value of luxury sales in this country is about 3 billion euros and is projected to reach 6 billion euros by 2030, with a growth rate of 10% to 12% per year.” Tourism is a key pillar of the "Vision 2030" initiative launched by the government in 2016, with investments exceeding 1 trillion euros. In Riyadh alone, plans include 500,000 square meters dedicated to luxury and three large shopping centers.

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