As pessimistic consumers switch from big-ticket items to the affordable-luxury realm, this is set to affect the luxury-good market in the Asia-Pacific region and a loss of US$2.1bn in predicted.
Retail intelligence group GlobalData has forecast luxury sales in the region will decline by 3.4 per cent to reach $60.3bn this year, compared to $62.4bn last year.
The industry has been hard hit by the coronavirus pandemic, leading to the closure of numerous luxury stores across APAC. Sagging consumer confidence across the region means luxury retailers are not expected to regain their sales growth anytime soon, according to the GlobalData.
“Covid-19 has forced luxury brands to postpone their fashion shows, cancel promotions events, and disrupted supply chains,” said GlobalData Retail Analyst Suresh Sunkara. “However, since the start of the second quarter of this year, several countries in the region including China, Japan and South Korea have lifted most of their lockdown measures to bring normalcy in their economies while countries such as India have begun phased relaxation of lockdown measures. This will bring some relief to luxury retailers as they can now open their stores and resume operations.”
