LUXURY

The luxury sector across BRICS countries is characterized by high growth potential, driven by the emergence of affluent consumer classes, digital access to global trends, and aspirational consumption patterns. However, international luxury brands entering these markets face a volatile mix of regulatory, cultural, and reputational risks. Government scrutiny, taxation on luxury goods, and import tariffs can significantly inflate retail prices, reducing competitiveness and altering brand perception. Additionally, intellectual property (IP) protection is often weak, exposing brands to counterfeiting and parallel market leakage.

Over the last five years, China has remained the standout growth engine for global luxury brands, with LVMH, Hermès, and Cartier posting record sales—particularly during the post-COVID rebound in 2021–2022. However, rising nationalism, tightened data regulations, and anti-corruption campaigns targeting conspicuous consumption have made operations riskier. In Russia, luxury firms like Chanel and Prada halted operations after the Ukraine invasion in 2022, leading to asset write-downs and reputational dilemmas. India has shown promise with growing demand for high-end fashion and jewelry, yet high import duties and limited luxury retail infrastructure continue to limit scalability. Brazil and South Africa present fragmented demand and persistent issues with economic inequality, crime, and logistical barriers to premium retail experiences.

Luxury brands must also navigate cultural sensitivities, shifting consumer values, and digital backlash risks. Missteps in advertising, brand ambassadors, or geopolitical alignment can provoke intense public reaction and boycotts, particularly in China and India. Additionally, luxury consumers in BRICS increasingly demand social responsibility and sustainability—pressuring brands to reconcile exclusivity with ethics. In such an environment, success requires not only brand strength and supply chain control but also deep geopolitical awareness and crisis preparedness.