What’s in a bag? If you ask Chanel, Dior, Louis Vuitton, or Coach, the answer is “enough.” It’s possible that inflation is going up, the cost of housing is going up, and contrary to what some people might believe, the global COVID-19 pandemic is far from done. In spite of this, analysts anticipate that the global market for luxury handbags will be worth more than 35,4 billion dollars by the year 2031. Manufacturers of luxury handbags are luring buyers with the creation of bags that combine fashionable design with cutting-edge functionality.
According to the findings of a study conducted by Transparency Market Research, it is anticipated that the market for luxury handbags will expand at a compound annual growth rate (CAGR) of 5.9 percent between the years 2021 and 2031. Even though there has always been a desire for a fine handbag, how is it that the luxury handbag business is doing so well despite the fact that economic circumstances are not promoting the expansion of fashion? The solution can be found in one of the most influential economic forces in the world: women who are employed.
The increasing proportion of working women around the world is driving up demand for high-end handbags.
The rise in the number of working women around the world is resulting in an increase in the total amount of revenue that is considered disposable; this is excellent news for the luxury fashion industry. The percentage of women who participated in the labour force around the world fell from 50.1% in 1990 to 46.9% during the global COVID-19 epidemic, which caused the overall number of women who worked to decrease. On the other hand, the increasing number of women pursuing higher education across the world is offsetting this trend.
Companies that are active in the international luxury handbag industry are increasingly placing an emphasis on the development of novel and cost-effective products, and at the same time, they are seeking for growing markets to target. Asia remains a crucial market for the expansion of the luxury handbag industry. The use of social media is the most important factor in getting working women to purchase more luxury handbags.
According to Listen First Media’s rankings, the major players in the luxury handbag market continue to dominate the social media scene. These major players include Dior, Gucci, Louis Vuitton, Versace, and Chanel. These major companies all have engagement scores of 8 million or more. It is possible that social media and the culture of influencers played a significant role in the resurgence of the Dior Saddle Bag.
The Dior Saddle Bag has been seen on a number of significant influencers, including Susie Bubble, Bryanboy, and Chiara Ferragni, among others. It didn’t take long for the handbag to become one of Dior’s most popular items, which was wonderful for the company’s bottom line. The market for luxury handbags is looking particularly lucrative for young working women, particularly in the Asia Pacific region.
According to Ricardo Rubi, a senior partner at the luxury brand consulting firm Simon-Kucher Partners, the surge in the market for luxury handbags is most certainly caused by people finally going out again following the COVID-19 lockdown. This information was provided to FashionUnited. People are also starting to make their way back to the office. There has been growth in the number of people engaging in the practise of revenge shopping across a variety of categories, including fashion and cosmetics.
As a result of inflation, luxury goods manufacturers have also raised their prices, which has led to a rise in revenue. Rubi told FashionUnited, “When we are discussing about dollars, people need to remember that we are talking volume.” “Companies almost never discuss the number of sales units. Taking into account the pricing within those dollar values is important. Companies who were historically very risk averse when it came to boosting their prices are now taking calculated gambles as a result of increased revenues and fluctuating budgets. When it comes to price hikes, companies may be quite daring until the situation once again becomes unclear, which may occur as a result of rising interest rates.
Because there is still room for expansion in that region, particularly in China with its rapidly expanding middle class, the Asia Pacific market will continue to be of critical importance to the luxury industry. In an interview with FashionUnited, Rubi stated, “For a very long time, all eyes have been on China.” “When it comes to luxury goods, China has been able to command some of the highest margins that have ever been seen in Asia at any given time.”
Rubi told FashionUnited that “one of the issues with emerging economies is that they oscillate,” despite the fact that there is a surge in the number of working women in emerging economies. When one emerging economy is thriving, it doesn’t necessarily mean that the others are doing as well. You should focus your attention on economies that are getting more stable even while other economies are becoming less stable. We are all aware of what is taking place in Russia at the moment, and we can anticipate that this will have an impact on the luxury goods industry for some time. Russia has a segment of the market that was comprised of very high spenders.
In addition to this, he stated that “India is one market that has a lot of space for growth in the luxury sector.” When looking at marketplaces in Latin America, it is exceedingly difficult to do so because each country in the region has such a unique economic status. The fact that COVID-19 is having a detrimental effect on these countries’ economies is the one thing that all of these nations have in common. Now is the time to consider if the governments that are now in place will be conducive to economic expansion.
According to Rubi, the current moment is an excellent opportunity for luxury firms that are considering price increases to do so because “Demand is going up.” China is another country that is contributing to a lack of available supplies. That provides luxury goods manufacturers with the justification they need to raise their prices. There is a lot of money available on the market right now as a result of the European Central Bank and the Federal Reserve releasing a large amount of money into the economy, which has led to an increase in the amount of money that is considered to be disposable income. The supply is decreasing while demand is increasing. The rise in prices that is widely anticipated really materialises as a consequence of this expectation. It seems likely that prices will continue to rise until interest rates can manage inflation, demand can be reduced, and we find a solution to the problems with the supply chain.
Given that luxury labels like as Chanel and Louis Vuitton are likely to continue raising their prices in the near future, now might be a good time to make that investment purchase, before those firms raise their prices once more. As we speak, the market for luxury handbags has reached its pinnacle level.