When it comes to the luxury goods market in Mexico, there’s a new kid in town. Or rather, there are no kids in town. A recent Huffington Post article describes how couples without kids “are putting the department store before the baby carriage” and the impact that’s had on Mexico’s market for the finer things in life.
Mexico’s Luxury Goods Market Booms Thanks To Childless Couples
Reuters | Posted: 07/15/2013 7:59 am EDT | Updated: 07/15/2013 10:39 am EDT
By Alexandra Alper and Elinor Comlay
MEXICO CITY, July 14 (Reuters) – While their parents may have scrimped and saved to raise small armies of children on a single paycheck, growing numbers of high-earning Mexican couples are putting the department store before the baby carriage.
Couples with dual incomes but no kids, or “Dinks,” are on the rise in Mexico, nearly doubling since 2005. They are buoying a growing high-end goods market, splashing out on everything from expensive lingerie to home decor.
Though just over a million in number, the couples are a gold mine for leading brands, and their spending habits are shoring up consumer demand as Mexico’s economy cools.
Sandra Rodarte, 27, an events producer who shops for Apple products and loves fine whiskies, drops at least 10,000 pesos ($780) a month on non-essentials like annual trips to the United States.
She and her live-in boyfriend have no plans to raise a family, she explains while lunching at the exclusive marble-clad shopping mall, Antara, in downtown Mexico City.
“It’s more fun, freer … as a person and as a couple,” said Rodarte, who is conscious that being a Dink means going against the grain in a culture that values marriage and motherhood. “Of course there are stigmas. Here in Mexico, women are supposed to leave their homes in white to get married as virgins.”
Little data exists on how much Mexican Dinks spend, but a 2008 study by consulting firm De la Riva Group found that each couple shells out about 165,000 pesos ($12,900) per annum, largely on movies, restaurants and bars – or some 220 billion pesos ($17.17 billion) in total.
That infusion is helping to boost Mexico’s luxury goods market, which is projected to expand 12 percent this year, on par with growth over the last four years, according to Bain & Company, a consulting firm.
By contrast, total retail sales grew 3.7 percent last year.
For luxury leather goods maker Coach, Dinks are a growing market, company president Ian Bickley said in an email.
The firm, which set up shop in Mexico a decade ago, now boasts 26 locations, its biggest presence in Latin America, and plans to open a new store in the city of Queretaro this year.
And with good reason.
Spending in Mexico on designer apparel, luxury accessories and fine wines hit $3.88 billion in 2012, up from $2.16 billion in 2004, according to Euromonitor, a sales tracking firm.
“We see a definite uptick in interest from brands that just a couple of years ago we never imagined … would be calling us and saying, ‘We’re interested in Latin America and what can you tell us about Mexico?'” said Franco Calderon, president of Latin American Retail Connection, which helps consumer goods stores set up shop in the region.
His firm is working on plans with luxury lingerie brand Agent Provocateur to debut in Mexico through top-end department store chain Palacio de Hierro.
What do you spend your money on that you might not if you had kids?