Image courtesy of Center for Hispanic Research
January marks the start of the first fashion quarter for many fashion companies/brands, with fashion brands reviewing their books to see where their bottom line landed at the end of 2024. They are also considering new marketing initiatives and how to grow their business for the new year. Brands are examining where their best-performing stores are, what demographics they are doing best with, and what new target demographics they should consider. In addition, large companies are also looking at emerging markets and consumers where they should start making investments.
One topic that needs to be discussed in the fashion industry is marketing to Latino and Hispanic consumers. Hispanic and Latino consumers have emerged as major power players in the fashion market, accounting for 27 percent of consumers according to Media Culture. Beyond just Latinos in the United States, fashion brands are also acknowledging the significance of Latin America as a crucial market for their products.
Image courtesy of fendi.com
In the past decade, brands have looked beyond Europe and North America to find their next cash cows. During the 2010s, China emerged as a crown jewel in the portfolios of many luxury brands. LVMH Moët Hennessy Louis Vuitton, the conglomerate that owns brands including its namesake Louis Vuitton, as well as Dior, Givenchy, and Fendi, made China a primary focus throughout the 2010s. LVMH luxury brands expanded their store fleet there, hosted runway shows for brands, and signed Chinese actors, such as Zhou Xun, as ambassadors.
As China hit economic stagnation, luxury brands looked to the Middle East for growth, particularly the UAE, where customers are known to spend big. South Korea joined the list of fashion power players over the past several years with the rise of luxury Korean consumers and the global popularity of K-pop. K-pop stars from groups like Blackpink and BTS inked deals with major fashion houses ranging from Tiffany & Co. to Dior.
India is also emerging as a luxury power player, with their luxury market growing at a compound rate of 10 percent year. An expanding middle class is driving growth, and with a country of over 1 billion people, that creates a sizable consumer base.
Image courtesy of luxonomy.com
With much of Asia and the Middle East with large fashion consumer markets tapped, fashion has begun looking to Latin America as its next target. Spanish brand Silbon recently made its foray into Latin America, starting with Mexico. The brand opened its first retail store at the El Palacio de Hierro department store in Polanco, Mexico City, for its men’s collection. In a statement, the brand said that part of their reason for starting in Mexico was the high market demand.
Although Siblon is an accessible-priced brand, the mass market brands aren’t the only ones looking at Mexico for business growth. Fendi and Dolce & Gabbana have opened stores in Mexico, and Dior held its 2024 cruise show there, signaling the growing importance of Mexico to the luxury fashion market. It’s important to note that Mexico is the second largest economy in Latin America after Brazil. While Hispanic and Latino consumers make up 27 percent of the overall luxury consumer market, within the U.S. alone they are even more likely to consume luxury goods. Among luxury consumers, a report by Media Culture found that on average luxury consumers are 72 percent more likely to be Black, 54 percent more likely to be Asian, and 37 percent more likely to be Hispanic.
Image courtesy of luxedigital.com
Beyond luxury and mass-market apparel brands, athleisure brands are realizing the importance of the Latin American market, too. In November, Alo Yoga announced they would open their first store in the region at JK Iguatemi in São Paulo, Brazil.
Brazil is considered by many in fashion and retail as the gateway to fashion in the Latin American market. With cities, including Rio de Janeiro and São Paulo, seeing high numbers of tourists yearly, many premium shoppers travel to Brazil.
The overall luxury market has grown in Brazil in recent years, with a valuation of $74 billion in 2022. By 2030, it is expected to grow to 133 billion dollars, meaning growth will be rapid. Brazil has a robust, young, and fashion-conscious population, making it a ripe target for luxury brands. The country also sees incremental periods of high economic growth, further boosting its place on the world stage.
Image courtesy of tripadvisor.com
Brazil’s JK Iguatemi has become a major retail space for other brands ranging from Tiffany & Co. to Balenciaga. In the first quarter of 2024, Iguatemi S/A’s total sales reached R$ 4.3 billion, a +10.3% increase compared to the first quarter as reported by fashionnetwork.com.
Hispanics and Latinos are also one of the fastest-growing demographics in the United States. The Selig Center for Economic Growth projects that Hispanic buying power will increase by 32 percent from 2021 to 2026. Hispanics are also expected to account for 34 percent of growth in apparel spending in the next five years.
Hispanic Americans are also poised to become major trend drivers in the U.S. A study by Civic Science found they’re twice as likely to value style/trendiness than non-Hispanic consumers. In terms of marketing to Hispanic consumers, fashion brands will need to continue investing heavily in social media. Social media is the winner for where Hispanic Americans find fashion inspiration, with twenty-four percent of consumers saying they get their inspiration from social media platforms, eight points higher than the average non-Hispanic consumer surveyed for Civic Science’s study.
Image courtesy of shoppintrip.com
Despite criticism of fast fashion and sustainability, the clothing category is one of the most popular among Hispanic Americans, with 66 percent purchasing from brands including H&M, Shein, and Forever 21.
As one of the fastest-growing demographics in the United States and with increasing purchasing power, Hispanics and Latinos will become a major part of the marketing conversation in fashion over the next several years. It’s time for brands to invest accordingly.
—Kristopher Fraser
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