Market Size for Luxury brand in 2026 [Example]

The total available market (TAM) is calculated by considering the global luxury goods market, which is estimated at $250 billion annually. For our calculations, we will consider only affluent individuals who can afford luxury products, typically wealthier than average consumers. This brings our identified audience to about 1.5 billion people worldwide who can potentially buy luxury goods, including clothing, accessories, and more, focusing on the global affluent population aged 18 and older, as the luxury market attracts buyers with higher disposable incomes.

The serviceable addressable market (SAM) narrows down the TAM by considering the specific segments that would realistically purchase our luxury brand products. Considering that luxury brands typically target high-income individuals who are more likely to engage with such brands, we estimate that around 15% of the affluent population fits this profile. This results in an estimated 225 million potential customers and a market spending potential of approximately $22.5 billion, factoring in average spending on luxury goods of around $100 per person annually.

The serviceable obtainable market (SOM) anticipates the portion of the SAM that can be captured within the first year of operation. Aiming for a conservative approach, we estimate capturing about 1% of the SAM in the first year. Given our earlier figure of 225 million potential customers, this translates to approximately 2.25 million customers. If we consider an average annual spending of $100, our SOM valuation rests at about $225 million, remaining realistic and achievable for a new entrant in the luxury market.