The multiband trade is in a crisis. This applies above all to those who focus on clothing and leather goods, but not on beauty and watches. This requires an ever closer relationship with customers. The luxury sector experiences a phase of stagnating growth. Also with the aspiring consumers: a disappointment can be determined inside.
This overview of the luxury market was given on Tuesday in Milan at the eleventh edition of the Altagamma Consumer and Retail Insight. Matteo Lunelli, President of Altagamma, emphasized in his speech that the uncertainties on the market are still unsolved. The tariffs will play an important role. The countries with the greatest potential for luxury companies include India, Indonesia and Thailand.
“We face many challenges in Europe,” said Lunelli, “from sustainability to artificial intelligence. We have to tackle these challenges at European level”. Recently, the study on the effects of the European luxury industry was presented in the European Parliament of ECCIA, the European Alliance of the Luxury and Creative Industry.
The eleventh edition of the Altagamma Consumer and Retail Insight presented a qualitative analysis of luxury consumers: inside and new trends in retail.
“The study by the Boston Consulting Group shows that 35 percent of the aspiring consumers have bought less on the inside due to loss of purchasing power and a decline in consumption in China. The top segment of the pyramid, which is 0.1 percent of the overall market. Or to increase the top customer.
Estimating consumer: Inside: over 74 percent of the total market value
The democratization process has led to exceptional growth. Emergency consumer: Inside, over 74 percent of the total market value now account for. This segment now shows some weaknesses. Although it is still 61 percent of the luxury market, it has a decline of 13 percentage points compared to 2013. The causes certainly include losing purchasing power due to the global uncertainty and the geopolitical crisis.
Top customer: Inside: over 50,000 euros per year for luxury goods
Top customer: Inside, which spend over 50,000 euros annually for luxury goods and services, are the real protagonist today: inside of the market. Not only in categories such as yachts or jets in which they make up the entirety of the segment. They are also active in a variety of other areas, including design, wines and spirits, cars, wellness, watches and jewelry. These make up most of their consumption. With a preference for experience -oriented luxury and the new trend ‘health as prosperity’. Well -being, aesthetics and the care of personal spaces are considered primarily. It is expected that expenses will increase by around ten percent over the next 18 months.
The study ‘True-Luxury Global Consumer Insight’, which was carried out by the Boston Consulting Group (BCG) in cooperation with the Fondazione Altagamma, shows: Top-Cond: Inside are at the top of the output hierarchy. They have annual average editions of around 360,000 euros and a minimum expenditure threshold of over 50,000 euros. Although they make less than 0.1 percent of the luxury consumer: in 2024 they generated over 23 percent of the total expenditure of the market. Luxury mobility and wellness/durability are excluded here. With these categories you can reach 37 percent and have a significant impact on the direction and dynamics of the entire sector.
With a view to 2025, the market for luxury goods will continue to be faced with headwind. A stagnating or slightly declining growth is expected. The scenario reflects a combination of critical factors: demand for demand in China, persistent macroeconomic uncertainty in the USA and persistent shrinkage of the segment of the aspiring consumers: inside. All of these are signs of a change in upheaval.
Reasons for the weakening of the market for luxury goods
One of the most common reasons for the recent weakening of the market for luxury goods is the decline in the consumption of luxury goods due to aspiring consumers: inside. What really happens here? This year’s edition of True-Luxury Global Consumer Insights examines the historical development of luxury up to its origins in the 19th century. At that time, luxury was only reserved for a wealthy elite. In the course of the last century, however, the luxury opened gradually to a wider audience. The democratization process led to exceptional growth. The aspiring consumers: inside that spend less than 5,000 euros a year accounted for over 70 percent of the overall market volume.
The segment, which once drives up growth, now shows its fragile side. The expenditure of the emerging consumers: inside proved to be extremely susceptible to macroeconomic cycles. While top customer tends to spend anti-cyclical on the inside, supported by the positive development of the financial markets and immune to general economic volatility, the expenditure of the aspiring consumers is correlated closely with the development of global gross domestic product. The correlation is 0.97, according to the study.
Due to this strong market volatility, the segment of the emerging consumers makes 60 percent of the luxury market inside. This corresponds to a decline of 13 percentage points compared to 2013.
Last year alone, around 35 percent of the aspiring consumers: Inside, reduced or discontinued their expenses for luxury goods. This proportion rose to 45 percent in China and around 30 percent in Europe and the United States. The main reasons for this development are price increases, the loss of perceived value and greater financial caution. The three main categories in which the consumers: in the inside are: savings or financial systems (22 percent), wellness/durability (13 percent) and second-hand luxury (13 percent).
Top customer: Plan inside, increase your luxury expenses
“Today, aspiring consumers rely on investments in timeless products and are increasingly critical of price increases that are not justified by innovation or quality. Half states to prefer iconic or timeless pieces, and three out of four have dropped out due to a negative perception of the price-performance ratio,” continued the study.
It’s not just about economic caution, but probably about a redefinition of the luxury concept for this segment.
The prospects for 2026 remain for emerging consumers: Conduct: 50 percent still feel financially vulnerable (compared to ten percent of the top customers: inside) and 60 percent state that they are concerned about macroeconomic stress such as tariffs. Overall, 25 percent expect a further reduction of between five and 25 percent in the next 18 months, while 40 percent of them assume that their expenses for luxury goods will remain stable.
In contrast, top customers are preparing to increase their luxury expenses inside. 51 percent expect growth between five and 25 percent in the near future, while 34 percent want to keep their expenses stable.
What effects does this have on luxury brands? For brands that are strongly dependent on this segment, the consequences are obvious today: brands that have more than 50 percent of their customers among the up -and -coming consumers: inside the strongest declines. Their performance has been significantly weaker in the past three years and especially in the last twelve to 18 months. In contrast, brands that have remained loyal to their core of top customers are not only stood by the crisis. You even experience a strong growth phase.
Who are the top customers: inside?
In the center of the True Luxury sector there is a small but extremely influential group: the top customer: inside. Although they only make up 0.1 percent of the total customer, they have an annual purchasing power of over 50,000 euros and contribute to a considerable part of the luxury market alone. The importance of these customers is closely linked to a solid and growing demographic group: the wealthy private individuals (High net Worth individuals, HNWI). In 2024, the HNWI population exceeded 940,000 people worldwide. By 2030, an increase in this group with an average annual growth rate (CAGR) of nine percent in relation to the number and eight percent in relation to assets will be expected. In just six years, the assets held by this segment will increase from 68 trillion to 103 trillion euros.
North America remains the center of global HNWI assets. It holds 46 percent of the total assets and continues to drive the market. At the same time, new growth regions are created: regions such as India and Southeast Asia have a significant acceleration of wealth formation. In India in particular, the number of HNWI will increase between eleven and 15 percent by 2034 with an estimated CAGR. This is supported by an increasingly international and more dynamic clientele.
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