Analysis firm Deloitte has released data that suggests that Australia’s luxury industry is set to grow. The firm estimates that the Australia luxury goods market will grow between 6% to 8% every year until 2024. While the growth of the sector seems to have peaked at 16% (reached in 2016), it does show that there is a major demand for luxury items in the region.
Luxury brands and platforms have already taken note of this and many are ramping up their efforts in Australia to benefit from this growing market. From retail outlets to tourism, there are many things happening that will get luxury shoppers spending in Australia.
More brands open stores in Australia
While Deloitte suggests that Australia’s luxury sector could grow, it seems that some brands had not been expecting this development and had failed to set up shop (literally) in the region. In 2017, it was revealed that 50 different luxury retailers were planning a move to Australia as experts said that their luxury market could become as profitable as Europe’s.
Australia has a low brand penetration level – just 30% compared to 45% and more in Singapore, the UK, and Hong Kong. While some have ascribed this discrepancy to Australia’s position on the map (it makes it expensive to get goods to the region), it seems that luxury brands are now realizing that Australia’s market is too valuable to be ignored.
Luxury services become more accessible
The growth of the luxury market in Australia is also leading luxury services and luxury shopping to become more accessible. Online shopping for luxury brands is expected to grow as more people choose to shop via their computers and smartphones. The lack of luxury brand stores in Australia will also get more people shopping online.
We are also seeing other online services make luxury versions, reflecting the appeal of higher-end products and services to customers. One VIP casino has launched its “Club Royale” for casino players in the UK, and it may come to Australia too. The casino, which already offers slots and casino games to all players, has created a membership-only club with bespoke offers and promotions, as well as a concierge service. This does show how platforms are thinking more about creating luxury experiences. Australia Launches a Tourism Campaign for China.
Tourists from China in Australia play an essential role in the growth of Australia’s luxury goods market. These visitors have money to spend when on holiday and are choosing to spend it on luxury brands found in the stores of Sydney and Melbourne. It is estimated that people from China make up two-thirds of the luxury goods market income in these two cities.
The luxury market in Australia could grow more because of a new tourism campaign launched by Australia. The country is spending $5 million to attract free and independent tourists (FITs) from China to the country. People travelling in smaller groups and with a self-booked itinerary – so-called FITs – are more likely to spend more and stay longer.
While some brands may have spent much of their time looking at other regions, it is now time for the luxury goods market of Australia to grow. With huge effort going into the growing industry, it could be a very valuable one for the country.