Cross-border luxury sales continue to increase despite economic turbulence

Cross-border online sales of luxury goods continue to increase, despite diminishing consumer confidence, with sales up 17 percent in the first six months of 2022, according to research from global and domestic direct-to-consumer (DTC) e-commerce company ESW.

Despite the cost-of-living crisis, continued economic turbulence and geo-political instability in 2022, ESW’s ‘Global Voices: Consumer Pulse’ 2022 survey of more than 14,000 consumers across fourteen countries, found that a fifth of consumers (21 percent) purchased luxury goods internationally, driven by shoppers in China (46 percent), South Korea (36 percent) and UAE (34 percent).

The most popular luxury product categories shopped cross-border were handbags and accessories (44 percent), followed by clothing (42 percent) and jewellery (39 percent).

The research added that globally, international sales of handbags and accessories and jewellery were higher than those in domestic markets (40 percent and 33 percent, respectively). Shoppers cited satisfaction with previous cross-border purchases (31 percent) and a lack of availability in their home markets (27 percent) as being the key drivers behind their decision to purchase from international luxury brands.

UK ranks second for most shopped cross-border market for luxury goods, behind the US and ahead of France

The UK ranked as the second most popular market for cross-border purchasing of luxury goods (32 percent), second only to the US (56 percent) and ahead of the traditional luxury markets of France (29 percent) and Italy (25 percent). British luxury products were purchased most frequently from shoppers in the UAE and China (both 40 percent), India (39 percent) and Japan (38 percent).

Natashia Redfern, vice president UK country sales director at ESW, said in a statement: “Luxury continues its ascent as cross-borders’ best performing category with this latest reported increase of +16 percent even more impressive considering our research shows sales in this category grew 50 percent in 2021.

“This showcases the impressive work luxury retailers have put in to recreate the in-store brand experience online to win conversions and customer loyalty. Additionally, brands and retailers must take note, the data clearly shows a positive previous cross-border purchasing experience is the key driver for engendering customer loyalty and repeat purchasing long-term.”

The increase in cross-border sales is part of an ongoing shift away from the traditional luxury flagship store model, added ESW, as consumers prioritise access to products. Most cross-border luxury purchasers (70 percent) said that they were happy to forego the in-store experience to receive their products quickly by purchasing online. However, customers still have high expectations of digital commerce with 79 percent saying they expect the exceptional, personalised customer service experienced in-store to be replicated online.

Redfern added: “The ongoing success of cross-border luxury sales highlights the need for British luxury brands to find routes to those highest value shoppers globally who have a passion for their products and who want to engage with and buy directly from them.”