World Wealth Distribution & Ultra-High-Net-Worth Consumers

Madelaine Ollivier, Senior Luxury Analyst at Wealth-X, examines what 2016 holds for the luxury market with regards to global spending, the Ultra-High-Net-Worth (UNHNW) population and sector preference.

Spending on luxury goods continued in 2015 to be focused within a handful of global cities and driven by a consumer class of global citizens. Beneficiaries of this global movement included brands with a strong presence in luxury capitals such as London, New York and Paris. Brands present at travel retail, particularly at airports, also profited from the growing number of global travellers.

The effect of foreign exchange rates on luxury purchases was a strong driving force in 2015. We see the impact of foreign exchange continuing to weigh in on luxury purchases in 2016.

However, the continual strengthening of currencies such as the US Dollar and UK Sterling may deter tourist shoppers.

Similarly, the threat of terrorist attacks will, we believe, weigh on the minds of some consumers and potentially curb travel rates to certain destinations.

A relative tumultuous macro-economic situation across many emerging markets in 2015 has been one of the contributing factors to a growth in spending on fine jewellery, watches and collectibles.

In 2016, we believe there will be a growing preference for high-ticket items across these categories. Consumers seek assets with a tangible value that will appreciate over time and can be liquidated if needs be.

“ One of the biggest Millennial trends that will continue in 2016 is the drive for experience-based spending ”