You will get dizzy when you see the amounts spent by these 10 countries that spend the most on luxury goods. Although one could argue they could share some of that money to charities, who are we to judge. We live in a (mostly) free world and one of its perks is the freedom to spend your hard earn money on whatever you want.
The definition of luxury and luxury goods is broad and it largely depends on where you live. We are here to discuss the common perception of luxury goods: sports cars, expensive jewelry, designer clothing, yachts, etc. On the other side of the medal, for some people luxury goods are smartphones, new shoes or even a working shower. Luxury goods have many definitions, but the simplest one would be that luxury goods are goods that aren’t available to masses but limited to the smaller circle of people who can afford them.
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If you ever stood in front of a shop window and tried to figure out why is that handbag worth 2,500$, this may give you a good answer. We will quote Michel Chevalier and Gérald Mazzalovo, who describe luxury brands in their book Luxury Brand Management: A World of Privilege, “One could say that a luxury brand is a selective and exclusive one; that is, it is almost the only brand in its product category, giving it the desirable attributes of being scarce, sophisticated and in good taste. It also has a slightly understated and aristocratic dimension.” When it comes to categories of luxury goods, accessories make up to 30% of the market, followed by apparel and hard luxury.
As you can see, it is all about sophistication and class. There is no way these luxury goods could be bought by a factory worker. They are reserved for the selected clientele and following these trends can give us an excellent insight just how big is the difference between being rich and being poor. The fact is that there is more money spent on luxury every year. If you compare this list with our 10 countries that spend the most on infrastructure, you will see that they spend similar or even greater amounts on luxury goods.
To figure out 10 countries that spend the most on luxury goods, we took Worldwide Luxury Goods Report by Bain and Company made in 2015.Note: Spent amounts were converted from Euros to USD. We consulted other sources like Deloitte and Knight Frank that had the similar stats but they didn’t have expressed amounts of spending.
10. Russia
Russia’s presence on the list should don’t come as a surprise if you are aware of all those billionaires. Just think of Roman Abramovich and the world’s most expensive yacht. The thing is that most of those oligarchs live outside Russia and their influence on country’s economy and spending trends is quite small.
Amount spent for luxury goods: 3.5 billion $
9. Hong Kong
Hong Kong’s spending spree on luxury goods has been smaller than in some recent years, but the market is still stable. One of the highlights of country’s position in luxury is Michael Kors company. This company from Hong Kong is the fastest growing luxury company in the last 5 years.
Amount spent for luxury goods: 7.5 billion $
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8. South Korea
South Korea had a growth of 4% in 2015 compared to 2014, and the spending on luxury goods is still going strong. One of the possible reasons for this is the growing popularity of Korean cosmetics brands that are gaining huge popularity all across Asia.
Amount spent for luxury goods: 12 billion $
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7. Germany
Germany is the first European spender on our 10 countries that spend the most on luxury goods list. Although being Europe’s biggest economy force, Germans are careful with their spending habits. One of the reasons could be the crisis in Eurozone.
Amount spent for luxury goods: 13.2 billion $
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6. UK
The UK has recorded an increase in spending on luxury goods with growing economy being one of the most important reasons. The other reason is the popularity of shopping tourism in UK’s biggest cities like London and Manchester. The sales are especially boosted by Middle East tourists.
Amount spent for luxury goods: 17.3 billion $
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5. France
Although 19 billion $ spent on luxury goods may seem more than well, the fact is that France is losing the race. Expenditure is smaller every year due to country’s slower economic growth in the past few years. It is estimated that almost half of the money spent on luxury goods, France owes to the foreign tourists. The reason for France’s high place on the list should be attributed to LVMH, the biggest luxury company in the world and Paris as one of the most famous cities in the world.
Amount spent for luxury goods: 19 billion $
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4. Italy
It seems that the problems that followed luxury goods market in Italy are finally over. Italy is having small but steady growth in consumption of luxury goods. Of course, Italy was always one of the biggest luxury centers with apparel brands like Dolce & Gabbana, Armani, Prada, and Versace.
Amount spent for luxury goods: 19.2 billion $
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3. China
It is estimated that China will be world’s second biggest luxury spender by 2018 if this trend continues. Chinese luxury shoppers are spending just 20% of their money in their native land. Their destination choices are usually Europe, South Korea or Japan.
Amount spent for luxury goods: 19.9 billion $
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2. Japan
Although in 2000 luxury shoppers from Japan represented more than quarter of global luxury purchases, now they are down to only 10%. One of the reasons is the increase in VAT (Value-added Tax) that jumped from 5 % to 8% at the beginning of 2014. Also due to Yen weakening, Japanese shoppers are now spending more money domestically than they ever did before.
Amount spent for luxury goods: 22.3 billion $
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1. United States
If you know that there is bigger expenditure for luxury goods in New York City than in Japan, seeing the United States on the top 10 countries that spend the most on luxury goods is far from surprising. Expenditure in the United States is bigger than in all of 4 previous countries combined. Now the United States are taking the role that Japan had in 2000, spending one-quarter of all expenditures on luxury goods in the world The best news for the economy of United States is that Americans are accustomed to doing their luxury shopping in their native country.
Amount spent for luxury goods: 87.5 billion $
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