In 2013, there were approximately 178,000 individuals in Mexico with a net worth of more than $1m, which represents approximately 1% of the world’s millionaires (Ledbury Research). The growth rate is currently set to accelerate over the next few years, meaning the number of wealthy in Mexico will be approximately 265,000 by 2017.
Mexico is not far behind Brazil when it comes to luxury expenditure, spending €2bn per annum. Like Brazil, Mexico has high import duties on luxury goods, and therefore a considerable amount of luxury consumption takes place outside of the country – mostly in the US.
Despite this, luxury brands have built up a sizable store presence in Mexico. In part, this is driven by a desire to drive brand awareness and product familiarity, even if the final purchase takes place in another country.
According to Ledbury’s most recent analysis, there are more luxury stores in Mexico than in Brazil (up to 50% more, depending on the exact definition) and in total Mexico has approximately 2% of the world’s luxury stores – on a par with markets like the UAE and Spain in terms of overall store-count.
Luxury stores tend to be concentrated in Mexico City, where approximately 40-50% of all luxury stores in Mexico are located, with Cancun, Guadalajara, Monterrey, Puebla and Jalisco as the important second-tier cities for luxury brands.
The luxury brands present in Mexico are US-dominated, however. Brands such as Coach and Tiffany are much more present than their European equivalents. In part, this reflects the likelihood of Mexican luxury consumers travelling on to the US to complete their purchases, rather than Europe, though it is also evidence of European brands over-looking the emerging opportunity in this country.
Approximately 100,000 high-end watches were imported into Mexico, which is a similar figure to the number imported into Australia (102,000) and Russia (131,000). It is approximately 3 times as many as were imported into Brazil in the same period (35,000).