MANILA, Philippines - Asia would account for half of the global luxury revenue by 2020, according to the Economic Intelligence Unit (EIU).
In a report, EIU forecasts that in the Philippines alone, there will be at least 38,000 millionaires by 2015.
EIU is an independent business within the Economist Group which offers forecasting and advisory services, as well as country, industry and management analysis worldwide.
“Based purely on consumption growth levels and currency headwinds, the region could account for over one-half of global luxury revenue within a decade, compared with one-third today,†it said.
Luxury firms are shifting their attention towards other emerging markets in the Middle East and Africa.
But unlocking Asian potential is the priority for luxury brands. EIU’s five-year forecast for retail sales is stronger for Asia than any other region.
“We project Asian household incomes out to 2030, taking in assumptions for shifting tastes, as well as the emergence of niche and home-grown brands. Asia’s wealthy elite is driving luxury growth so far, but it is the burgeoning aspirational middle class who will provide market depth,†it said.
The reports show that the number of Asian households with annual income of over $150,000 would rise from 2.5 million to around 27 million by 2030. China alone would have 12.7 million of such households.
The expanding middle class would be the main buyer of luxury goods sales. By 2030, there would be over 270 million households with income exceeding $50,000, the EIU said.
This represents a six-fold increase of today’s numbers and would account for more than one-quarter of the households in the 14 key Asian markets.
The report said that China’s dominance would grow as Japan’s influence wanes. India and Indonesia would step into the limelight as key markets over the long-term, especially as Indian retail opens up to foreign investment.
Southeast Asian economies are also reporting a rising number of millionaires.
The Philippines is home to 11 billionaires according to a 2013 list by Forbes.
Swiss bank Julius Baer forecasts that there would be 38,000 Filipino millionaires by 2015.
In Malaysia, luxury good sales already hit over one billion euros in 2012. It has 40,000 households with annual incomes of over $150,000. This is estimated to hit one million by 2030.
In Vietnam, the Central Institute for Economic Management reported a 33-percent rise in millionaires in the first half of 2012, albeit to only 170 individuals. There are a large number of young professionals living with their parents that will also compete for Louis Vuitton, Gucci, Cartier, Piaget, Rolex and Prada goods.
Indonesia is forecast to have more households earning over $50,000 than Hong Kong by 2030. Luxury sales hit 600 million euros last year.