Big spenders

In the recent Paris Olympics, perhaps one of the most surprising sponsors was Louis Vuitton, the maker of the Olympic medals, torches, and gifts throughout various events. Also acting as an apparel sponsor for many athletes, one could wonder what a luxury brand has to gain from such a mass-market event. One of the reasons could be that amid the current slowdown after a pandemic-induced boom in luxury goods sales, luxury brands are eager to recruit new customers to accelerate sales growth and sell entry-level prices items to them. Turning to long-term dynamics, as a proxy for the potential number of big spenders, USD millionaires are expected to grow over the next few years. UBS expects 15% growth between 2023 and 2028. Taiwan, Turkey, Indonesia and Japan are forecast to have the highest percentage growth in the number of USD millionaires. The US is expected to add the most in absolute terms with about 3.5 million while growth in China is more muted with half a million millionaires to be added through 2028.

Source: JP Morgan Research, Euromonitor, August 2024.