Louis Vuitton, Hermès, Gucci: The world’s most valuable luxury brands

China is the biggest target market for luxury brands and is playing an integral role in boosting value in the sector.

A booming Chinese economy and a willingness to embrace pop culture is helping luxury brands increase their global value, with Kantar Millward Brown’s latest BrandZ rankings revealing significant growth in the sector.

French fashion house Louis Vuitton has seen its value rise by 41% to $41.1bn in 2018, making it the best-performing luxury brand in the top 100 at number 26 and one of this year’s top 20 fastest risers.

Meanwhile, Gucci’s 66% increase sees the Italian brand climb an impressive 26 places to 54th in the ranking with a value of $22.4bn. It is also the sixth-fastest riser – behind Chinese giants JD.com (94%), Alibaba (92%) and Moutai, (89%), as well as Paypal (85%) and Netflix (73%).

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Dior has also seen a significant boost to its brand value, which is up 54%, making it the ninth fastest-growing brand in this year’s study, although it doesn’t make it into the top 100, while Hermès climbs two place to 39th after a 20% rise in brand value takes it to $28.1bn.

Luxury retail analyst Anusha Couttigane, who works at Kantar Retail, says while exclusivity remains an important factor, as consumers become more socially conscious, the number one thing that makes a luxury brand successful today is relevance.

“Consumers buy into brands because they fit in with their beliefs and lifestyle needs; they appreciate brands that are relatable and accessible,” Couttigane explains.

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“Even if they are priced out of the majority of lines produced by a luxury label, the ability to interact with a brand via social media, or connect on a relevant issue/element of pop culture, boosts brand love.

“So brands like Louis Vuitton and Gucci, which embrace pop culture (think Gucci memes and Louis Vuitton’s art collaborations) stand to benefit from this appetite for accessibility. Brands need to have the ability to hold conversations with consumers in order to stay front of mind.”

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China is now the biggest target market for the luxury segment and is also playing an integral role in boosting the value of luxury brands.

According to Zenith’s latest advertising forecast, luxury brands spent US$2.1bn in China in 2017 – second only to the US at US$5.2bn – meaning these two markets currently make up 61% of the world’s luxury adspend.

Fuelled by luxury brands’ embrace of ecommerce, selling their products directly on platforms like Alibaba’s Tmall, and forming partnerships with popular Chinese influencers, China is now the most advanced digital market for luxury advertisers, with 53% of luxury adspend in China going into digital in 2017.

As such, Couttigane says luxury brands need to adapt to modern shoppers’ behaviours beyond the core product – particularly in the digital sphere.

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“The biggest driver after price is convenience and consumers increasingly want to be able to access brands online,” Couttigane adds. “Luxury players have been slow to convert to this due to fears around overexposure or brand dilution, but the most progressive ones understand that they need to have an online presence in order to retain custom.

“This is particularly true of Chinese consumers, which is the biggest target market for the luxury segment. That is why brands like Cartier, Gucci and Louis Vuitton have managed to see such success in recent times – because they’ve found ways of replicating that luxury shopping experience for the digital consumer.”