This year, the luxury industry in Western Europe grew by 2.8%, falling short of the anticipated 5.5% growth. Over the next four years, a steady growth rate of around 4% is projected, with the Adriatic region expecting a robust annual growth rate of 7%.
Ivana Laković, the president of an industry association, discussed the key trends shaping the luxury market in 2023. She highlighted that the global revenue from luxury products and services is expected to reach $473.9 billion by 2024, with an annual growth rate of about 4%. The dominant sector in this market remains luxury watches and jewelry, projected to generate $157.6 billion in sales in 2024.
China, the largest market for luxury goods, is expected to bring in $102 billion in 2024, followed closely by the U.S. with $100 billion in sales. Italy and France continue to be the top exporters of luxury products and services.
Laković also pointed out the growing consumer base in India and the Middle East, despite political instability that has slowed growth compared to previous years. However, she predicts stable growth in Southeast Europe, particularly in the Adriatic region, which is expected to see a 7% growth rate annually.
The luxury market in Serbia is estimated to be worth $1 billion, with stable regional growth expected. The greatest demand is forecasted in major cities such as Belgrade, the Istrian region and Montenegro’s coast, driven by rising purchasing power, tourism, and a cultural shift toward Western lifestyles.
Despite facing a challenging second and third quarter, referred to by analysts as a “cruel summer,” the luxury market saw global growth. Laković explained that many analysts revised their initial growth projections, but she emphasized that the overall trend is still positive for the region, as companies are looking to expand into new markets.
Fashion, jewelry, and the automobile industries are among the fastest-growing sectors in luxury. International luxury brands like Brunello Cucinelli, Santoni and Zegna have plans to enter the Serbian market between 2025 and 2026. Brands are increasingly tailoring their strategies to local preferences and cultural specifics, with a focus on authenticity and respect for regional values.
Ivana Laković noted that niche luxury brands, which emphasize authenticity, are expected to make up a more significant portion of the luxury market by 2030. She also mentioned that the entry of brands like Louis Vuitton, set for 2026, will likely encourage other luxury brands to explore the Serbian market.
Luxury brands assess the viability of entering new markets based on consumer power, socio-economic profiles, and the competitive landscape. Key factors include the local market’s economic stability, demand for luxury products and the readiness of consumers to embrace luxury goods.
Laković emphasized that luxury brands are also paying attention to consumer behavior, including the shift toward experiential luxury, especially among younger generations. Millennials are increasingly drawn to luxury experiences like travel and wellness, while Gen Z is expected to account for a significant portion of luxury consumption by 2030, valuing transparency, sustainability and diversity in the brands they choose.
The trend toward online shopping in the luxury market is also growing, with online sales projected to represent 20% of total luxury goods revenue by 2026. To remain competitive, luxury brands will need to engage and retain their customers by offering personalized experiences and emphasizing their craftsmanship and superior materials.
In conclusion, the luxury industry is undergoing significant transformations, with younger consumers driving demand for both exclusivity and sustainability. Brands are adapting to these changing preferences by offering products and experiences that align with the values of the next generation of luxury consumers.
