Luxury retail market sales 4 times higher than in pre-pandemic period
New-generation shoppers give a big lift despite economic sluggishness
Sales in the luxury retail market in the first half of this year increased four times from the same period in 2019, before the Covid-19 pandemic, according to a market survey published by The 1 Insight on Thursday.
The data insight platform that focuses on consumer lifestyles said the main contributors to the big growth despite the sluggish economy were new generation shoppers.
The 1 Insight said the trend was in line with the “lipstick effect”, which is used to describe the same situation in several countries around the world. The lipstick effect theorises that when facing an economic crisis, consumers will be more willing to buy small indulgences such as premium lipsticks.
It added that among top segments of the luxury market, beauty products outperformed fashion products by about 10%.
The report said popular products in the beauty segment include lipsticks, makeup palettes, and perfumes. Meanwhile, top sellers in the fashion segment include handbags, accessories and shoes.
When divided by age groups of shoppers, those in the Gen Z group (born 1997-2012) prefers to buy luxury items such as cosmetics, perfumes and skincare products, respectively.
Gen Y (born 1981-1996) prefer items related to fashion products, skincare, and perfumes, respectively.
Gen X (born 1965-1980) prefer skincare and fashion products, cosmetics, and perfumes, respectively.
Baby Boomers (born 1946-1964) often buy skincare items, fashion products, and cosmetics.
The survey also found that Gen Y, Gen X and Baby Boomers have higher brand loyalty than Gen Z, who are more open-minded about switching their favourite brands.
Older shoppers (Gen X and Baby Boomers) also prefer shopping via storefront more than online channels, either e-commerce platforms or social media, which are highly popular among younger spenders.
The 1 Insight mentioned a survey by CRC VoiceShare during May-June 2024, which found that 50% of respondents had bought at least one item in the fashion or beauty category in the past month.
The majority of respondents also said that they preferred shopping at department stores, as they provide a better customer experience as well as the feel of luxury.
