Luxury knows no bounds

THE international market for luxury goods such as fine art, fast cars and expensive jewellery is worth $1.4 trillion a year, despite generally negative perceptions of the global economy, a report shows.

The report, released by the Boston Consulting Group this week, claims luxury spending is likely to increase by 7 per cent over the next year, pushed up by affluent segments of developed and emerging countries.

”Overall, the worldwide luxury market has shown itself to be robust,” authors said.

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”The uncertainties and worries that characterise most of today’s economic headlines are nowhere apparent in recent reports on the world’s luxury players.”

The research polled 1000 wealthy individuals in France, Germany, Italy, Japan, South Korea, Spain, Britain and the US, as well as the four emerging BRIC countries (Brazil, Russia, India and China).

It showed that aggregate annual spending on what those individuals described as luxury items was $1.4 trillion, including $770 billion on luxury experiences, $350 billion on luxury cars, and the rest on personal goods such as watches and handbags.

Industry figures in Australia said they had witnessed the trend here, with a slowdown in the low-to-medium end of the market and an acceleration in the high end.

”We have seen that the Australian consumer is increasingly seeking high-quality products, exceptional craftsmanship and service that exceeds their expectations,” Louis Vuitton Australia chief executive Philip Corne said.

”Brands that have recognised this shift and can consistently deliver the highest standard of product and service are best-placed to grow their market share in both difficult and buoyant economic conditions.”

Sotheby’s Australia chairman Geoffrey Smith said that although the lower end of the market was slow, art investors were spending record levels at the top end.

”What we have found is that it is not about a price threshold, but about quality,” he said. ”Our clients will, with no hesitation, buy something that is very special, unique, singular, as opposed to works of art that are more common.”

Luxury knows no bounds

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