Report on the economic benefits of the Luxury Sector in the Global Economy

Index

Introduction
Direct and Indirect Contribution to Gross Domestic Product (GDP)
2.1. Contribution of the Luxury Sector in France
2.2. Italy: Fashion and Luxury Automotive as Economic Drivers
2.3. United States: A Key Expanding Market
2.4. United Kingdom: Impact of Luxury on the Economy
2.5. Emerging Markets: Rapid Growth and New Opportunities
Employment Generation and Multiplier Effect
3.1. France: Employment in the Luxury Industry
3.2. Italy: Fashion as a Source of Employment
3.3. United States: Growth of Employment in Luxury Retail
3.4. Switzerland: Employment in Luxury Watchmaking and Jewelry
3.5. Asia: Expansion of Employment in the Manufacturing and Sale of Luxury Goods
Fiscal Revenues and Contributions to the Public Treasury
4.1. Japan: Contribution through Luxury Goods Taxes
4.2. China: Import Tariffs and Fiscal Policies
4.3. United States: Tariffs and Sales
4.4. European Union: Luxury Taxes and Import Regulations
4.5. Brazil and Mexico: Fiscal Revenues and the Luxury Market
Attracting Investments and Infrastructure Development
5.1. Europe: Expansion of Luxury Infrastructures
5.2. Expansion in Asia and the Middle East
5.3. Latin America: Investment and Development in the Luxury Sector
5.4. Africa: New Frontiers for the Luxury Market
Boost to Luxury Tourism and Hospitality
6.1. Paris and London: Capitals of Shopping Tourism
6.2. Asia and the Pacific: Accelerated Growth
6.3. Middle East: Luxury Tourism in Dubai and Abu Dhabi
6.4. United States: Impact of Luxury Tourism in Key Cities
Innovation, Sustainability, and Technological Development
7.1. Investment in Sustainability
7.2. Adoption of Digital Technologies
7.3. Innovation in Customer Experience: Virtual and Augmented Reality
7.4. New Business Models: Circular Luxury and High-End Goods Rental
Outlook to 2030
8.1. Growth in Emerging Markets
8.2. Sustainability as a Pillar of the Future of Luxury
8.3. Digitalization and New Technologies
8.4. Evolution of Luxury Tourism
8.5. Challenges and Opportunities
Conclusion
Information Sources

1. Introduction

The luxury sector, which includes fashion, jewelry, watches, automobiles, hospitality, and luxury tourism, is one of the most dynamic and resilient industries in the global economy. In 2024, the global luxury market was valued at approximately €390 billion (around $420 billion), reflecting sustained growth despite economic challenges, such as market fluctuations and post-pandemic recovery. This report provides an in-depth analysis of how the luxury sector contributes to the global economy through various channels, including employment generation, fiscal revenues, attracting foreign investments, and boosting tourism, using updated data and detailed examples from various countries.

2. Direct and Indirect Contribution to Gross Domestic Product (GDP)

The luxury sector significantly contributes to the GDP of many economies, both developed and emerging. This contribution can be direct, through the sales of luxury goods and services, and indirect, by boosting related sectors such as tourism, hospitality, manufacturing, and financial services.

2.1. Contribution of the Luxury Sector in France

France is the world leader in the production and sale of luxury products. In 2024, the luxury industry accounted for more than 4% of France's GDP, equivalent to approximately €120 billion. French brands, such as Louis Vuitton, Chanel, and Hermès, not only dominate the global market but are also essential economic pillars for France. Louis Vuitton Moët Hennessy (LVMH), for example, reported revenues of €90 billion in 2023, with a growth of 12% compared to the previous year. The contribution of the luxury sector to the French economy exemplifies its direct impact on GDP, driven by strong exports and high domestic demand for high-end products.

2.2. Italy: Fashion and Luxury Automotive as Economic Drivers

Italy is another key player in the luxury sector, particularly in fashion and automobiles. In 2024, the Italian luxury sector, which includes brands like Gucci, Prada, Ferrari, and Lamborghini, accounted for approximately 3% of Italy's GDP, or about €65 billion. The luxury automotive industry has experienced an 8% year-on-year growth, driven by global demand for high-end Italian vehicles. Exports of luxury goods, including textiles, leather, and automobiles, represent a significant portion of Italy's foreign trade, contributing substantially to the country's positive trade balance.

2.3. United States: A Key Expanding Market

The luxury goods market in the United States reached approximately $80 billion in 2024, representing about 1.5% of the country's GDP. American brands like Tiffany & Co., Coach, and Ralph Lauren have shown stable growth, with a 5% increase in sales compared to 2023. Additionally, technology companies that have ventured into the luxury sector, such as Apple with its high-end products, have also significantly contributed to this growth.

2.4. United Kingdom: Impact of Luxury on the Economy

The United Kingdom is an important market for luxury, especially in fashion, watches, and jewelry. In 2024, the luxury sector represented approximately 2% of the UK's GDP, equivalent to about £40 billion. London, with its iconic luxury shopping areas such as Bond Street and Knightsbridge, is a global hub for luxury shopping tourism. Furthermore, British brands like Burberry and Rolls-Royce have significantly contributed to the national economy, particularly through exports and tourism.

2.5. Emerging Markets: Rapid Growth and New Opportunities

Emerging markets such as China, India, Brazil, and Mexico have shown rapid growth in the luxury sector. In 2024, China became the largest luxury market in the world, with an estimated spending on personal luxury goods of over $80 billion, representing approximately 3% of the country's GDP. In India, the luxury market has grown at a compound annual rate of 10% over the past five years, driven by an expanding middle class and greater exposure to international brands.

3. Employment Generation and Multiplier Effect

The luxury sector is a significant generator of employment, both direct and indirect. In 2024, more than 2.5 million people were directly employed in the luxury industry worldwide, and this figure rises to nearly 6 million when including indirect jobs.

3.1. France: Employment in the Luxury Industry

In France, more than 180,000 people are employed directly in the luxury industry in 2024, with a 3% increase compared to 2023. This sector provides well-paid jobs, with salaries exceeding national averages by 30-40% due to the high skills required. Major employment centers include Paris and Lyon, where fashion factories, design centers, and retail stores are concentrated.

3.2. Italy: Fashion as a Source of Employment

Italy employs more than 150,000 people directly in the fashion and luxury goods sector in 2024. Additionally, over 300,000 indirect jobs have been created in areas such as textile manufacturing, leather, and retail services. The Tuscany region, famous for its leather production, has seen an economic revitalization due to the demand for luxury items, providing jobs to over 20,000 local artisans.

3.3. United States: Growth of Employment in Luxury Retail

In the United States, the luxury retail sector directly employs more than 100,000 people in 2024, with a 4% growth since 2023. Cities like New York, Los Angeles, and Miami have seen an increase in employment opportunities in luxury boutiques and high-end malls. Additionally, the employment multiplier effect in this sector is estimated at 2.2 indirect jobs for every direct job.

3.4. Switzerland: Employment in Luxury Watchmaking and Jewelry

Switzerland, known for its luxury watchmaking industry, employs more than 60,000 people in the production of high-end watches. Swiss watch exports reached a value of CHF 21 billion in 2024, highlighting the importance of the sector to the Swiss economy. The high demand for Swiss luxury products has generated employment both in manufacturing and in the supply chain.

3.5. Asia: Expansion of Employment in the Manufacturing and Sale of Luxury Goods

In Asia, the expansion of luxury has led to a significant increase in employment, particularly in China and India. It is estimated that more than 500,000 people are employed in the manufacturing and sale of luxury goods across Asia. Luxury brands have established factories and distribution centers in these countries, generating thousands of local jobs and stimulating the economy.

4. Fiscal Revenues and Contributions to the Public Treasury

The luxury sector is an important source of fiscal revenue for many governments, through sales taxes, import tariffs, income taxes, and other levies.

4.1. Japan: Contribution through Luxury Goods Taxes

In Japan, luxury goods sales generated over $6 billion in sales taxes in 2024. Japan applies high tax rates on luxury goods, contributing significantly to national fiscal revenues. Additionally, imported luxury goods are subject to additional tariffs, further increasing tax collection.

4.2. China: Import Tariffs and Fiscal Policies

China, as the largest luxury market in 2024, generated more than $10 billion in fiscal revenues through import tariffs and consumption taxes on luxury goods. The Chinese government has implemented favorable fiscal policies to encourage luxury brands to establish local operations, which has further increased the tax base and contributed to fiscal revenues.

4.3. United States: Tariffs and Sales

In the United States, tariffs on imported luxury goods generated more than $3 billion in revenues in 2024. Additionally, sales tax rates in cities with a high concentration of luxury boutiques, such as New York and Los Angeles, have significantly contributed to local and state revenues.

4.4. European Union: Luxury Taxes and Import Regulations

In the European Union, taxes on luxury goods and import regulations generate significant fiscal revenues. In 2024, it is estimated that taxes on luxury goods contributed more than €15 billion to EU fiscal revenues. Additionally, import regulations for luxury products in the EU have generated additional tariffs that benefit member states.

4.5. Brazil and Mexico: Fiscal Revenues and the Luxury Market

In Latin America, Brazil and Mexico are the largest luxury markets, and both countries have seen an increase in fiscal revenues from the sale of luxury goods. In 2024, Brazil generated more than $2 billion in fiscal revenues from the luxury sector, while Mexico collected approximately $1.5 billion. These revenues are essential for funding social and economic development projects.

5. Attracting Investments and Infrastructure Development

The luxury sector is a catalyst for attracting foreign investments and developing local infrastructure, especially in emerging markets and developing regions.

5.1. Europe: Expansion of Luxury Infrastructures

In Europe, investments in luxury infrastructures have been significant. In Paris and Milan, investments in new flagship stores and renovations of historic buildings exceeded €500 million in 2024. These investments not only generate employment during the construction phase but also increase property value and contribute to urban regeneration and tourist attractiveness.

5.2. Expansion in Asia and the Middle East

In Asia, the expansion of luxury brands in cities like Shanghai, Singapore, and Dubai has required substantial investments in commercial and logistical infrastructure. In 2024, investments by luxury brands in new stores and distribution centers in Asia were estimated at over $2 billion. Dubai, in particular, has experienced a boom in the construction of flagship stores and luxury malls, which has boosted local economic development and generated thousands of jobs.

5.3. Latin America: Investment and Development in the Luxury Sector

In Latin America, the luxury sector has seen an increase in foreign direct investment, particularly in Brazil and Mexico. In 2024, investments in luxury infrastructure in Latin America reached approximately $800 million, with new stores and distribution centers established in major cities such as São Paulo, Rio de Janeiro, Mexico City, and Buenos Aires. These investments have generated local employment and improved commercial infrastructure.

5.4. Africa: New Frontiers for the Luxury Market

Africa is emerging as a new frontier for the luxury market. In South Africa, Nigeria, and Morocco, significant investments have been made in the development of luxury infrastructures. In 2024, investments in the luxury sector in Africa were estimated at $500 million, focusing on the expansion of flagship stores and high-end malls in key cities such as Johannesburg, Lagos, and Casablanca.

6. Boost to Luxury Tourism and Hospitality

The luxury sector is essential for high-end tourism, which represents a significant portion of global tourist spending. In 2024, luxury tourism generated more than $320 billion worldwide, with a projected annual growth of 6% until 2030.

6.1. Paris and London: Capitals of Shopping Tourism

In cities like Paris and London, luxury shopping tourism is a key economic driver. In 2024, it is estimated that luxury tourism in Paris generated more than €12 billion in revenues, with high-net-worth tourists spending on luxury boutiques, high-end restaurants, and exclusive hotels. London, with its famous luxury shopping streets, has seen luxury tourist spending of approximately £9 billion.

6.2. Asia and the Pacific: Accelerated Growth

In Asia, luxury tourism has experienced accelerated growth. In Japan, luxury tourism accounted for more than 15% of total tourist spending in 2024, equivalent to more than $5 billion. In Thailand, luxury tourism has been identified as a priority sector for economic development, with spending growth of 10% annually over the past three years.

6.3. Middle East: Luxury Tourism in Dubai and Abu Dhabi

The Middle East, particularly Dubai and Abu Dhabi, has emerged as a prime destination for luxury tourism. In 2024, Dubai generated more than $7 billion from luxury tourism, focusing on exclusive experiences and high-end shopping. Abu Dhabi has followed a similar strategy, focusing on attracting high-net-worth tourists with luxury resorts and exclusive cultural activities.

6.4. United States: Impact of Luxury Tourism in Key Cities

In the United States, luxury tourism in cities like New York, Miami, and Los Angeles has been a key driver of the local economy. In 2024, it is estimated that luxury tourism in New York generated more than $8 billion in revenues, benefiting high-end hotels, exclusive restaurants, and luxury stores. Miami has seen similar growth, especially in the luxury hospitality and exclusive shopping experiences sectors.

7. Innovation, Sustainability, and Technological Development

The luxury sector also drives innovation and technological development, investing significantly in sustainability and new technologies to improve customer experience and optimize operations.

7.1. Investment in Sustainability

Concerns about sustainability are increasingly influencing the luxury sector. Brands like Gucci, Prada, and Chanel have led the way in sustainability, investing hundreds of millions of dollars in eco-friendly practices. In 2024, investments in sustainability by major luxury brands exceeded $3 billion, focusing on reducing carbon emissions, eliminating single-use plastics, and improving labor conditions throughout the supply chain.

7.2. Adoption of Digital Technologies

Luxury has been a pioneering sector in adopting advanced technologies. Online luxury sales reached approximately $60 billion in 2024, representing 14% of the total personal luxury goods market. Brands like Louis Vuitton and Burberry have implemented virtual shopping experiences using augmented reality (AR) and virtual reality (VR), enhancing customer experience and attracting a new generation of digital consumers.

7.3. Innovation in Customer Experience: Virtual and Augmented Reality

Luxury brands are using technologies such as virtual reality (VR) and augmented reality (AR) to offer unique shopping experiences. For example, Dior and Gucci have developed virtual fitting rooms where customers can experience products in a digital environment before making a purchase. This innovation has improved customer experience and increased online sales, which grew by 18% in 2024.

7.4. New Business Models: Circular Luxury and High-End Goods Rental

The concept of "circular luxury," which includes the resale of luxury items and the rental of high-end products, is gaining popularity. Platforms like The RealReal and Vestiaire Collective have captured a significant portion of the market by offering sustainable options for conscious consumers. The second-hand luxury market is projected to grow at an annual rate of 12% until 2030, reflecting a shift in consumer preferences towards more sustainable practices.

8. Outlook to 2030

The future of the luxury sector looks promising, with several key trends and developments likely to shape the industry towards 2030.

8.1. Growth in Emerging Markets

Emerging markets, such as China, India, and other Southeast Asian countries, are expected to continue being key drivers of luxury growth, with a projected annual increase of 8-10% in demand for luxury products. This growth will be driven by an expanding middle class and greater access to luxury products through digital platforms.

8.2. Sustainability as a Pillar of the Future of Luxury

Sustainability will continue to be a central theme in luxury strategy. It is projected that by 2030, more than 50% of luxury consumers will prioritize sustainability in their purchasing decisions, driving brands to adopt more eco-friendly and sustainable practices. Investments in clean technologies and sustainable materials will continue to grow, focusing on reducing carbon footprint and improving labor practices in the supply chain.

8.3. Digitalization and New Technologies

Digitalization will continue transforming the luxury sector. Online sales could account for up to 30% of the total personal luxury goods market by 2030, driven by advanced technologies and a shift in consumer preferences towards convenience and personalization. Brands will continue investing in immersive digital experiences, artificial intelligence, and automation to enhance customer experience and optimize operations.

8.4. Evolution of Luxury Tourism

Luxury tourism is projected to grow at an annual rate of 6-7% until 2030, with increasing demand for unique and personalized experiences in exclusive destinations. The focus on sustainable tourism and social responsibility will remain a priority, with luxury destinations seeking to balance exclusivity with sustainability.

8.5. Challenges and Opportunities

The luxury sector faces several challenges, such as global economic volatility, changing consumer preferences, and increasing expectations regarding sustainability. However, it also presents numerous opportunities, particularly in developing digital experiences, expanding in emerging markets, and innovating in sustainable products and services. Brands that manage to adapt to these new realities and respond to changing consumer demands will be well-positioned to thrive in the future.

9. Conclusion

The luxury sector remains a crucial economic driver globally, contributing significantly to national economies through employment generation, fiscal revenues, attracting investments, and boosting tourism. With its ability to adapt to new economic realities and changing consumer preferences, luxury is well-positioned to remain a vital economic force towards 2030 and beyond. Innovation, sustainability, and digitalization will be key pillars in the evolution of the luxury sector, enabling brands to respond effectively to new global market demands.

10. Information Sources

Bain & Company, Global Luxury Market Report 2024
Deloitte, Global Powers of Luxury Goods 2023
Statista, Luxury Goods Market Value Worldwide from 2015 to 2024
McKinsey & Company, The State of Fashion 2023
Financial Times, Luxury Goods Sector Reports Robust Growth Despite Global Challenges
Euromonitor International, Luxury Goods in Asia-Pacific: Market Analysis
Bloomberg, Luxury Sector Financial Performance Report 2024
Bain & Company, China Luxury Report 2023
The Economist, Luxury in the Digital Age: How Online Sales are Transforming the Sector
World Travel & Tourism Council, Economic Impact of Luxury Tourism 2024

This report is based on reliable and updated sources that provide a detailed analysis of the economic impact of the luxury sector worldwide and its projected evolution towards 2030.