Why luxury brands are increasingly turning to Southeast Asia for growth

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Luxury brands may have found their next obsession—and no, it’s not China.

From Bangkok’s sprawling luxury malls to Singapore’s high-end shopping districts and Vietnam’s growing network of mono-brand boutiques, brands including Louis Vuitton, Dior, Gucci, and Hermès have steadily expanded their presence across Southeast Asia in recent years as they look to tap younger consumers, growing wealth, and booming tourism.

In Singapore, Marina Bay Sands has undergone an $8 billion luxury repositioning. Moreover, GlobalData estimates that Singapore’s e-commerce sector will see double-digit growth this year, climbing from an estimated $26.3 billion in 2025 to $31 billion in 2026.

Meanwhile Bangkok’s malls, such as Siam Paragon and Central Embassy, have become increasingly packed with luxury flagships and experiential retail concepts. Vietnam, meanwhile, has seen luxury retailers and distributors expand mono-brand and multi-brand boutiques in Ho Chi Minh City and Hanoi.

Luxury lift: Per Catherine Lim, senior equity analyst and head of Asia at Bloomberg Intelligence, the luxury retail landscape across the region is rapidly evolving, which is what is drawing in brands.

Vietnam’s growing economy and rising wealth creation, for example, are helping fuel luxury demand, while Singapore has increasingly emerged as a regional safe haven attracting affluent Southeast Asian shoppers and capital inflows.

“We definitely see that in Vietnam when it comes to real estate, the entire economy itself, the numbers out there…it’s coming from a low base, and that’s why it's actually growing at 6%–7% GDP,” Lim told Retail Brew. “That is contributing to the tailwinds.”

Matthew Merrilees, CEO of North America at Global-e, a cross-border e-commerce platform that works with fashion retailers, said all three countries have seen a rise in disposable income.

“There’s also a much more sophisticated international consumer base that resides within these three markets than you traditionally would see in some non-Southeast Asian markets,” he told Retail Brew, adding that tourism was another big contributor to luxury demand.

East side story: At the same time, changes in China are reshaping luxury’s global priorities. With tariff uncertainties and supply chain diversification becoming a bigger priority for retailers, “the shift from the overall reliance on China to moving away from China is definitely a reality,” Merrilees said. “It’s definitely happening with almost every single brand that I do speak to, and that’s helping spill over to some of the overall ease of access…in the Southeast Asia footprint.”

Lim expressed similar sentiments, adding that the average Chinese shopper has witnessed a “structural change” since Covid-19 in terms of conspicuous spending.

“Prior to Covid-19, having 10 Ferraris is the best thing for the second generation of a tycoon who would love to actually flaunt, and no one frowned upon it,” she said. “But there definitely is additional caution in wanting to flaunt such wealth in China.”

It has also led to the luxury market “normalizing” from older patterns of impulse buying and ultimately for some brands to look more towards Southeast Asian markets.

Over the next five years, however, barring political instability, strong local currencies like the Singapore dollar will be the “macro drivers towards how they actually contribute and drive the luxury market,” Lim said.