Mexico is Living a Golden Time in Luxury
The second largest market after Brazil, but whose growth is making the country an attractive destination not only for the major international luxury brands, but especially for tourists from around the world.
Today I wanted to make a snapshot of the luxury market in Mexico as it is, nowadays, the second largest market after Brazil, but whose growth is making the country an attractive destination not only for the major international luxury brands, but especially for tourists from around the world.
Mexico is, according to the WTO (World Tourism Organization), one of the 10 countries with the greatest attraction, thanks to its cuisine, its pre-Hispanic and post-Hispanic culture and the beauty of its beaches making the country a destination idal luxury tourism. Tourism is experiencing unparalleled growth of over 20% between 2013 and 2014, with over 29 million international tourists.
Mexico also has a fairly balanced tourism between domestic (53%) and international (47%) destinations. Among the most popular destinations Cancun tops the list by far, followed by Huatulco, Los Cabos in Baja California, Puerto Vallarta, Acapulco and Riviera Maya. Preferred by Mexicans seeking luxury international destinations outside are New York, Paris, Las Vegas, Miami, Madrid, Barcelona and London.
The Tourism Ministry is developing a greater diversification of the offer through different events that are driven within the Institutional Programme 2014-2018 launched by the Tourism Board of Mexico that aims both to consolidate and increase the participation in international markets and boost national tourism. Mexico’s Formula 1 Grand Prix is one of the biggest bets that are on the table and they expect it will boost the arrival of qualified tourists who contribute about $ 190 million a year in revenue for the country, according to El Economista.
The study Fuente Sindicada Segmento Affluent & Lujo en México, conducted by Lexia Solutions Insights in collaboration with Heaven agency, stresses that, if we look at the range of the most productive ages, among the 40 million people who are between 25 and 50 years, a growing middle class and middle class is emerging who are highly aspirational and increasingly open to international trends and whose purchasing power is improving considerably. On the other hand, the group of millionaires in Mexico account for 43% of the total individual wealth of the country, while more than half of the population have levels of poverty.
Although luxury in Mexico still remains closely associated with values such as exclusivity and high quality, 56% of them opt for experience. If it was to own expensive and exclusive items before, consumers of luxury in Mexico are chosing now to experience, enjoy and have more time. Two thirds of the Mexico affluent segment like to showoff according to the the study, ie, they like to brag about the brands they consume and display their logos. However, we must distinguish two types of consumers here:
- The trendiest (37% of the affluent segment) they buy for pleasure. They seek to be trendy and distinguished from others exhibiting their latest acquisitions and clothes.
- The affluent to be (31%) are the prototype show-off. They consider their image is classic, elegant and sophisticated, like to wear the brand logo always visible on the clothes and accessories they use.
Unlike the previous two segments, pleased and classic, which represent a third of this segment, acquire luxury for their own self-satisfaction. For pleased (26%) it is part of their luxury lifestyle. They believe they have everything they need to enjoy life and buy for simple wellbeing. Finally we have the classic (6%) who were born into the upper class and premium consumption is inherent in their lifestyle.
For the preparation of this article I consulted Ingrid Barrios who is founder and director of Luxgrid® Consulting, which specializes in consulting for prestigious brands, luxury goods and premium lifestyle. Ingrid has an excellent curriculum emphasizing the Advanced Programme in Management and Strategic Management of Luxury Universe (PSUL) by the IE Business School in Madrid, the Bachelor & Master in Management from ESADE in Barcelona, the International Digital Business Seminar at Harvard University in Cambridge and the Master Internet Business by the Institute for the Development of Internet in Mexico City. In addition, Ingrid is a regular contributor to Forbes Mexico where she publishes several articles on the luxury market.
