The growth of the global luxury market may have slowed down a bit the past couple years, but the demand for luxury brands is still increasing. The market has expanded well beyond North America and Western Europe since the turn of the decade.Currently, the two largest luxury markets are China and Japan – and the Middle East market is not far behind.
While there are consumers who believe that purchasing or investing in luxury brands is a manifestation of extravagance, it does provide various advantages, including the following:
One of the most known benefits of consuming luxury brands is its invaluable contribution to the economy. It is a major source of income for the government because the additional taxes (such as luxury or excise tax) levied on luxury goods are generally higher than the taxes imposed on regular items. Furthermore, the production and subsequent sale of these items help a nation’s GDP (gross domestic product) and create employment opportunities for a number of people.
Sense of accomplishment
Every once in a while, an individual will look to reward himself for all his hard work resulting in financial success. Luxury goods have proven a pleasant incentive, because it satisfies desires and carries a much higher price than other products.
In Western culture, consumers generally attach less psychological meaning to luxury goods. This is evidenced by the fact that the brands that offer these products are available almost everywhere. The culture is different in Asian countries. For example, in India, luxury brands are a manifestation of social status, wealth, and prestige. Meanwhile, in Indonesia, consumers seek an enhancement of themselves when they purchase from high-end lines.