Rising Economic Confidence across Mexico’s Luxury Goods Industry
Although it boasts the second-largest economy in Latin America, beaten only by the colossus that is Brazil, it may come as a surprise to some to learn that Mexico is now home to one of the biggest luxury goods markets in the world. Rather unfairly, the general image of Mexico has never really gelled with that of a luxury goods society, but in the past couple of years the country has proved that appearances can be deceptive. In terms of Latin America alone, Mexico now sits proudly at the top of the table in terms of luxury goods market value, overtaking Brazil in 2012 to grab the number one spot.
An Emerging Economy
The overall economy of Mexico has developed rapidly in recent years, recovering from being badly hit during the global recession of 2008. Today the country has the 14th-largest economy in the world and has joined the likes of Brazil, India, Russia and China as one of the top five emerging economic countries on the planet. Some forecasters are predicting that within ten years the Mexican economy will be on a par with its illustrious neighbour, the United States.
The rise in confidence in Mexico as it relates to financial prosperity has led to an explosion in the popularity of luxury goods. With an increase in the number of high earners in the country and a rapidly growing population of young, affluent workers keen to enjoy the finer things in life, the value of the luxury goods market in Mexico rose by an impressive 12% in 2013. In terms of native millionaires, the number living in Mexico is predicted to rise by 7% this year.
Designer clothing and luxury footwear currently lead the way in terms of sales, increasing by nearly 5% during 2013 to a staggering value of $685 million. The luxury accessories market, which includes designer handbags, raked in almost $300 million in sales. It is clear that Mexico is an economy on the rise.
As a result of this shift of popularity in luxury goods from Brazil to Mexico, many more designer brands are taking an interest in the latter country and are looking at ways of breaking into the market there. A number of brands are now starting to open their own stores in shopping malls across the country, breaking away from the more traditional retail strategy of trading from department-store concessions. This strategic change has broadened the appeal of many luxury brands as they become noticed by a wider audience.