It is estimated that Latin America will see an increase of 42 percent in the number of millionaires that call the area home by 2025. With the growth of millionaire residents brings with it the need for the luxury brands that they are accustomed to.

The market is expanding

Latin America has seen a large increase in the number of international luxury brands that are setting up shop throughout the region. For example, Liverpool, Mexico’s third largest department store player committed to adding 11 new branches within the area. This comes at a cost of $320 million.

When speaking about luxury brands, Josh Holmes, consumer analyst at BMI Research said, “Latin America will be one of the fastest growing markets globally. The region will easily outpace North America (1.8 percent) and Europe (1.9 percent) over the same period.”

Local brands are experiencing success

As the demand for luxury items in Latin America grows, there are local luxury brands that are working to stand above the larger international brands. According to an interview with research analyst from Euromonitor International, Evelyn Rodríquez, “Even when foreign brands prevail in luxury leather goods (LLG), Mexicans are looking for unique alternatives and experiment with local brands. LLG are expected to keep growing in the next 5 years around 8 percent CAGR (common annual growth rate).”

One such success story is the Mexican brand Jaime Ibiza. While the process of entering the market back in 1982 might have been a slow process they are reaping the rewards today. The brand now has the largest growth in Mexico and is even collaborating with Disney on leather handbags.

Men’s tailoring brand, Arturo Calle is also experiencing success with their growth in Latin America. Cautious global brands have left a void in Latin America that these local brands are filling. Arturo Calle has plans to open two boutiques in Panama, three in Costa Rica, and enter into malls in both Guatemala and El Salvador.

Local brands are seeing that Latin American countries are ready for luxury brands. The market is there and projected to continue growing, making expansion into these countries a wise decision.