Luxury Goods in South Africa

Luxury goods in 2025: The big picture

Luxury goods in South Africa experienced a strong recovery in 2025, following a notable decline the previous year. Overall value sales growth was influenced by a combination of fluctuating exchange rates, cautious consumer spending amid lingering concerns over economic stability, and shifts in tourism patterns following global disruptions. Despite these challenges, the market was buoyed by an increase in disposable income among a niche affluent demographic and a sustained appetite for premium experiences and products. Key socioeconomic trends, including rising urbanisation and an expanding middle-to-upper-income class, significantly underpinned demand across various luxury categories. However, macroeconomic challenges, such as moderate inflation and uneven employment rates, constrained broader market expansion.

2025 key trends

Within luxury goods in South Africa, there has been a greater emphasis on sustainability and technological advancements, notably the integration of artificial intelligence in personalisation and customer engagement strategies. A pronounced shift towards more sustainable practices was observed during the year, as luxury brands responded to consumer demands for greater transparency regarding environmental impact and ethical sourcing. This trend was particularly pronounced where brands prioritised the use of sustainable materials and production methods, thereby enhancing consumer satisfaction and fostering loyalty. The incorporation of AI-driven analytics enabled luxury brands to provide highly tailored shopping experiences, resulting in a heightened preference among consumers for higher-quality, more meaningful purchases.

Competitive landscape

In 2024, the competitive landscape of luxury goods in South Africa continued to be led by Bayerische Motoren Werke AG (BMW), Volkswagen AG (with its Audi and Porsche brands), and Mercedes-Benz AG, primarily due to the strength of premium and luxury cars in the local market. These companies maintained their leading positions through strategic initiatives that aligned with evolving consumer preferences. BMW's comprehensive portfolio of premium and electric vehicles, particularly its new electric and hybrid models, resonated strongly with the growing eco-conscious consumer base and younger buyers seeking their first high-end cars. Volkswagen’s position was also supported by its innovative plug-in hybrid and electric models and a wide range of customization options that appealed to tech-savvy millennials and Generation Z consumers. Mercedes-Benz, while experiencing some loss of share due to heightened competition in electric vehicles, remained competitive by emphasising personalised digital experiences and expanding its electric vehicle offerings. Its introduction of various models over the review period, including the EQE SUV, an all-electric model with an extended range and cutting-edge connectivity features, and the EQS 450 SUV, featuring a high-quality all-electric powertrain and advanced driving assistance systems, exemplifies this trend. To stay ahead, these companies intensified their efforts in digitalisation and personalisation, enhancing customer engagement through targeted marketing and expanded e-commerce platforms.

Retail developments

In 2025, offline retail continued to dominate the distribution of luxury goods in South Africa, largely due to the affluent consumer's preference for an immersive and hands-on shopping experience, particularly for high-ticket items such as luxury jewellery, designer apparel and footwear, and premium timepieces. Luxury brands successfully created accessible entry points to ultra-premium experiences while maintaining an air of exclusivity through curated access and personalised service. Major retail centres, luxury automotive dealerships, and premium hospitality venues played a crucial role in this dynamic, offering consumers a seamless and high-quality shopping environment. The growing prominence of multi-brand stores, providing a carefully curated selection of luxury products, enhanced both convenience and brand accessibility. Key retailers in categories such as designer apparel and luxury jewellery focused on expanding their in-store services, including personalised consultations, exclusive previews, and premium aftersales care, which strongly resonated with discerning luxury consumers. Additionally, the strategic placement of flagship stores in major cities such as Johannesburg and Cape Town, within well-established high-end shopping districts, further bolstered the appeal of physical retail. Notably, the V&A Waterfront’s luxury wing expansion, set to open in phases from November 2025, will showcase brands such as Dolce & Gabbana, Louis Vuitton, and Gucci, along with six more high-end labels, in immersive concept spaces, significantly enhancing the luxury retail landscape.

What next for luxury goods?

Retail value sales of luxury goods in South Africa are predicted to experience steady growth over the forecast period, driven by a notable increase in the number of high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) in the country. This expansion in affluent consumers is expected to boost demand across key luxury categories, particularly in luxury jewellery, luxury timepieces, and luxury leather goods, as these categories are increasingly viewed as investment assets that retain and often appreciate in value over time. By 2030, sales of luxury goods are projected to reach ZAR93 billion, driven by a 9% current value CAGR (2025 constant value CAGR of 4%), underscoring the robust market conditions and growing consumer base.