Luxury Goods Industry

The global industry that produces and sells luxury goods, products and services for which demand rises more than proportionally as income rises, unlike necessities whose demand grows in step with income. Luxury goods are defined by scarcity and elevated pricing and by high income elasticity of demand, so that a 1 percent rise in personal income can lift demand for them by 2 percent or more, while income declines cause disproportionately sharp drops in demand; owning them typically signals resources and confers prestige. The global luxury market was valued at roughly 170 billion dollars in 2000, China overtook Japan as the world largest luxury market by 2012 and now accounts for more than a quarter of global luxury spending, and the sector spans automobiles, yachts, watches, jewelry, designer clothing, cosmetics, wine and designer handbags as well as luxury services such as domestic staffing and specialized financial services.