Here's Everything You Need To Know About The New Era Of Luxury Goods

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on flickr” url=”http://www.flickr.com/photos/uggboy/4983970643/sizes/o/in/photostream/”]Despite the luxury good market suffering from a global crisis in 2008, the industry is now projected to increase by 10% to €168 billion by the end of 2010, according to Bain & Company. This is close to its 2007 historical market peak of €170 billion.With big brands becoming bigger and the emergence of an increasingly sophisticated consumer, luxury good providers have much to learn from the rapidly evolving market trends.

2009 saw an 8% decline in luxury goods after the 2008 subprime and financial crisis

In 2010 there was a 9-11% rebound in customer confidence, which continues to grow

Analysts expect 10% growth in 2010 and 9-12% growth in 2011 (counting inflation)

The new luxury era depends on one thing... China

The Asia-Pacific region is growing in importance -- while Europe and Japan are shrinking

China is the world leader in growth, up 30% in '08, 20% in '09 and 30% in '10

And the Chinese love traditional luxury brands

One problem for Japan: Young Japanese eschew luxury brands, preferring to set their own trends

Brazil is leading other emerging markets -- and didn't lose any speed during the recession

The US still leads the world in luxury spending, but this figure was down 15% last year

Accessories like watches and jewelry are the biggest growth area for luxury

Most luxury brands are investing in men, who currently make up 38% of the market

What it will take to succeed in the luxury goods market in the next 15 years?

There are three factors to pay attention to: China, a generational shift and an enhanced customer experience. Penetrating into China's market with a tailored value proposition will be important. Also, recognising the general shift --baby-boomer retirement and the connectedness of Gen Y-- is crucial. And finally, enhancing the customer experience with an integrated online and offline experience will be essential to gaining customer loyalty.

Source: Bain & Company

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