Australia’s luxury retail sector boosted by young consumers and tourism recovery

Millennials and Gen Z are major drivers of this growth.

Australia's luxury retail sector reached a record $6.2 billion in 2023, driven by an influx of young, affluent consumers and a rebound in international tourism, according to CBRE report.

Australia now boasts 483 luxury retailers, including major international and domestic brands. Key players like Louis Vuitton, Richemont, and Hermes have seen significant revenue increases of 87%, 153%, and 177%, respectively since 2019.

Millennials and Gen Z are major drivers of this growth, showing a preference for high-quality, sustainable luxury products. Despite shopping online, these consumers still value in-store experiences. As of April, individuals aged 15 to 54 account for over 50% of high-end spending in Australia.

Sheree Griff from CBRE highlighted the role of social media in influencing young consumers, noting that platforms like TikTok and Instagram are crucial for brand engagement. 

“Short-form videos and viral content, often featuring celebrities and influencers, heavily influence purchasing decisions of Millennials and Gen Z who want to align with fashion trends and brand status,” she added.

However, consumers continue to seek the unique experiences offered by physical stores, prompting brands to expand their presence in major cities.

Clothing and footwear dominate the market, making up $4.3 billion (69%) of total revenue in 2024. Jewellery and watches account for $1.5b (25%), whilst luxury luggage has shown notable growth.

The outlook remains positive, with a forecast CAGR of 2.7% from 2024 to 2029, driven by ongoing tourism recovery and a growing affluent population.