Luxury will see India as a prime market in 2024

Travel resumed in earnest this year after the final pandemic lockdowns lifted, and Europe’s biggest luxury brands were keen to take their audience around the world to new and emerging markets. From in Mumbai to Chanel’s 2023 Métiers d’Art collection in Tokyo, there was an opportunity to not only attract new customers and scale retail, but champion and learn from local communities and their artisans.

The global luxury market is expected to grow by 11 to 13 per cent and reach €1.5 trillion in 2023 as brands lean into experiences and see an uptick in sales across most geographical markets, according to a recent report published by management consultancy Bain and Italian luxury association Altagamma.

However, advanced economies like the US are set to remain stagnant this year, says Fflur Roberts, head of luxury goods at Euromonitor International. China — another important market for — also continues to face macroeconomic headwinds. High end giants are therefore looking to emerging markets for growth.

“Despite inflationary concerns in the emerging regions, many leading luxury players have been vying for growth in these markets, with Latin America (Mexico), the Middle East (Saudi Arabia) and Asia (India and Philippines) being of note,” says Roberts. “This is owing to the huge opportunities they offer, thanks to their untapped per capita potential, rising disposable incomes and overall wealth expansion — particularly among younger consumers.” breaks down the four emerging markets spotlighted in 2023, and what it tells us about the year ahead.

Despite instability in the Middle East, the region was an important destination for luxury brands (particularly the GCC countries, comprising the UAE, Saudi Arabia, , Oman, Kuwait and Qatar). Analysts point to the Middle East’s relatively young population and large proportion of high net worth individuals (HNWI), and forecast continued strong growth across the region in 2024.

According to Euromonitor International, the Middle East and Africa market is expected to hit $47.1 billion this year and is set to climb by around 15 per cent to $54.7 billion in 2024. The UAE remains a dominant fashion hub in the Middle East. The area is known for its high expat population as well as ultra wealthy shoppers, an attractive combination for luxury brands who are keen to target consumers with high spending power and who are fashion savvy.

From 2021 to 2030, the number of in the UAE will more than double to 127,000, per Euromonitor. Earlier this year, Venezuelan designer presented pieces from her Spring/Summer 2024 and resort collections during Dubai Fashion Week (DFW). Dubai’s a city that has always been important to the brand, Wes Gordon, creative director of Carolina Herrera, told There’s an opportunity for the wider industry to recognise the nuance of the budding fashion landscape, as there’s a “misconception” that consumers in the region only gravitate towards evening attire, Gordon added.

Other international players such as Jil Sander and Parisian brand Weinsanto have also held a presence during DFW. In October, Tapestry owned announced it will host its first show outside of New York in Dubai; and last month, Turkish streetwear brand Les Benjamins unveiled plans to expand its retail footprint across the Middle East, particularly targeting the UAE and Saudi Arabia.

Another emerging hotspot in this region is Saudi Arabia, the second largest fashion market in the GCC, according to Bain. More than half the population is aged 30 and under, and the number of HNWIs in Saudi Arabia is currently 1.5 times larger than the UAE — expected to double in the next five years.

Analysts and experts say the market is accelerating quickly thanks to the government’s attempt to reduce its heavy reliance on oil production and instead shift its attention to other industries, including fashion. The government has incentivised international investment by improving tax credits, making the visa application process easier and providing assistance to businesses that seek to relocate non Saudi staff to the country.

Similarly to neighbouring UAE, international heavyweights such as , Dior and Tiffany have an already established presence in the market. But with this new government strategy in place, Saudi Arabia is hoping to lure even more luxury brands. “[Saudi’s] macroeconomic environment is favourable for long term growth, with lower level of inflation versus other geographies and a steadier GDP growth, supported by government incentives on large scale investments,” Federica Levato, senior partner and EMEA leader of fashion and luxury at Bain told earlier this year.

A slowdown in markets like South Korea and mainland China have given Southeast Asia a boost. As highlighted in a recent report, the region has experienced consistent growth since 1991, with the strongest markets — Thailand, Vietnam, Singapore, Malaysia, Indonesia and the Philippines — expected to grow 4.8 per cent in 2024, according to Bain.

The management consultancy noted that Thailand is leading the growth in Southeast Asia thanks to a swelling local consumer base, tourism from neighbouring Asian countries and a rise in foreign investment. The luxury goods market in Thailand is expected to hit approximately $13 billion in 2024, up from $10 billion this year, according to Euromonitor; drawing in luxury brands, who have formed new partnerships with Thai influencers and celebrities, in a bid to build cultural relevance in Thailand and Asia more broadly.

Thai actors, influencers and celebrities were spotted front row during major shows at Paris Fashion Week including actor Metawin Opas iamkajorn, also known as Win, who sat front row at Prada’s menswear show in June, as well as Thai actress and singer Davika Hoorne, who made her front row appearance at in Seoul in May.

Others are being named as brand ambassadors: Nattawin Wattanagitiphat (Apo), who skyrocketed to fame in the drama , was named as a Dior ambassador in June, as was fellow Thai actor Phakphum Romsaithong, also known as Mile. Elsewhere, BamBam, the Thai singer and member of K pop band Got7, was seen attending the Louis Vuitton SS24 menswear show in Paris this summer.

Luxury brands looked to actors and celebrities to drive social media buzz this SS24 season. Actors Wattanagitiphat and Romsaithong, who both signed as Dior ambassadors in June drove 24 per cent ($10.5 million) and 17 per cent ($7.6 million) of Dior’s EMV (earned media value) respectively. Comparatively, ambassador Jisoo of K pop band drove 26 per cent or $11.5 million of the brand’s total EMV.

Thai drama emerged as this year’s key casting strategy, expected to follow a similar trajectory to K Pop, Karla Otto’s Year in Data report predicts. The trend is likely to continue throughout 2024. Vietnam and Singapore are also important and evolving markets. The Singaporean luxury goods market is expected to hit $9 billion this year and increase to $11.1 billion in 2024, according to Euromonitor.

Similar growth is predicted for the Vietnamese luxury market: it is expected to be worth £957 million in 2023 and forecasted to grow by 3.3 per cent annually through to 2028, according to market research firm BMI. Luxury heavyweights have begun expanding their retail footprint in both countries. In July, Vietnam based multi brand luxury retailer Runway opened its largest flagship store in Ho Chi Minh City, offering a broad portfolio of brands — ranging from Chanel to Rick Owens and Self Portrait.

, Tory Burch and Korean streetwear label ADLV have also opened stores in the city. Ralph Lauren opened its first café in Marina Bay Sands, Singapore, in July while luxury Swiss watchmaker Richard Mille unveiled its largest flagship store in October. This year was a “coming of age” moment for , signalled by Dior’s pre fall 2023 show in Mumbai in March.

There’s a growing interest in luxury among India’s local clientele and the region is set to “turn into a magnet for Western brands”, according to the recent Bain report, with numerous brands hoping to tap into the country’s young and wealthy population. Approximately 1.66 million people in India are forecast to hold , making it an attractive destination for high end labels.

Indian tycoon Mukesh Ambani, chairman and managing director of conglomerate Reliance Industries, unveiled a luxury mall in Mumbai in November, which is home to the likes of and others. Also last month, SMCP, the French owner of brands including Sandro and Maje, signed a deal with Reliance to expand into India, adding to the growing cohort of European brands launching stores in the region.

Alongside its burgeoning luxury fashion landscape, India is cementing its position as a beauty hotspot, where emerging brands rooted in ayurvedic practices in particular are thriving. Mergers and acquisitions (M&A) activity has ramped up, with global conglomerates like Companies, Puig and L’Oréal.

LVMH owned Sephora has teamed up with Reliance to help operate the beauty giant’s stores across the country and tap into the fast growing beauty and cosmetics market. Although M&A activity has slowed compared to 2022, the beauty market in India remains on track to reach $17.4 billion by 2025, according to Euromonitor.

L’Oréal chief executive Nicolas Hieronimus said during the company’s 2022 annual earnings conference that 40 per cent of L’Oréal’s growth was originating from “high potential” emerging countries, such as India, Mexico and Brazil. From designers such as Cape Town’s Lukhanyo Mdingi winning the 2023 Amiri Prize to Lagos Space Programme winning the renowned Woolmark Prize in May, the spotlight was on African brands from on and off the continent this year, as they built international recognition.

The continent holds immense potential for domestic and international , particularly as consumer demand within Africa increases and the region’s high spending consumers multiply. However, challenges remain, including socio economic uncertainties, poor infrastructure, lack of investment and limited educational and training systems.

Leading governmental institutions are recognising the potential impact African fashion can have on the industry’s global ecosystem. Growing interest in the market prompted Unesco to release its first ever report unpacking the challenges and opportunities for fashion in Africa in October. It’s the type of documentation many creatives and organisations in the region have long called for.

Unesco says the plan is to continue this research and by 2025, the governmental organisation hopes to release more detailed information on how to make the African fashion system prosper. “Fashion is really taking off in Africa, and this report shows that it can be developed even further,” Audrey Azoulay, director general of Unesco, said at the time.

“The potential is enormous, not only for the economy, but also for young people’s inclusion, women’s empowerment and for African culture to resonate globally.” Despite socio economic headwinds, Lagos Fashion Week returned for another year in October — and this time it was even bigger. Designers large and small flocked to the Nigerian city to showcase their SS24 collections.

Heavyweights such as Orange Culture returned to the schedule. This season, there was an air of pan Africanism: designers from Kenya to the Ivory Coast travelled to Lagos to make their debuts and to cash in on the buzzy event, building brand awareness. “Lagos is the rite of passage,” Ria Ana Sejpal, founder of sustainable Kenyan brand Lilabare, told backstage.

“It’s the African fashion capital.” Over in Paris, 10 designers from Ghana, Nigeria, Columbia, Côte d'Ivoire, New York and London presented their collections at The Folklore Connect’s debut showroom in September. It was a way for the to keep a presence during the industry’s biggest fashion week and connect with potential buyers, without the logistical or financial burden of a standalone show.

From Afrobeats to Amapiano, music from the continent is gaining global popularity and African fashion brands are cashing in on this international attention. African designers (and those within the ) are forging partnerships with some of the continent’s biggest musical stars. Brands like Burberry are keen to work with names such as Burna Boy in a bid to build cultural relevance.

Other names, like Daily Paper, work with a mix of emerging and established musicians including Wizkid and Burna Boy. In December, Nigerian streetwear brand Ashluxe teamed up with the Fela Kuti estate to produce a capsule collection inspired by the influential Afrobeat and highlife (a West African music genre) musician.

Looking ahead, the global luxury industry is set to normalise. Countries with the highest growth potential include Japan, , Taiwan, Hong Kong and Mexico among others. “The ‘new economic normal’ is giving rise to alternative values and spending criteria,” says Roberts of Euromonitor. “The meaning of luxury has undoubtedly undergone a metamorphosis.

Diversification, digitalisation, value proposition and sustainability, are the evolving trends that will continue to shape the industry.”.