The Australian retail market has been victim to volatile consumer confidence - but there is one category crossing benchmarks. And no, it's not etail.
The annual Australian Luxury Market Report, released today, reveals the value of international luxury brands exceeded the $1 billion mark in 2012, with sales revenue estimated at $1.07 billion.
This represents an 11.4 per cent increase on 2011 figures, versus 2.5 per cent growth in general clothing, footwear and personal accessory sales.
The report found local residents made up 70 to 80 per cent of revenue, versus tourists at 20 to 30 per cent.
This represents an increase of 10 per cent since 2011, with the greatest numbers from China and other emerging Asian countries.
MO Luxury director and author of the report Melinda O'Rourke said Australians are punching well above their weight in luxury, knocking back misconceptions revenue is dominated by tourists.
"While these figures show a strong growth rate of 11.4 per cent, it represents slower growth for the Australian luxury market relative to the global market which increased by 11.9 per cent.
"Despite the double-digit growth, Australia and the global luxury market are encountering an adjustment in estimates as they experience a slight decline influenced by the slow down in China's economy, the protracted fall out from the European debt crisis and economic concerns."
Key drivers for Australian growth include an increase in the number of high net worth individuals, an increased presence of luxury brands in the market and a cultural shift in purchasing habits.
O'Rourke said the Australian luxury market has an average growth of approximately 5.4 times the growth of Australia's total GDP, making an attractive option for international retailers.
"Age and gender are also driving changes in luxury consumer spending, with Gen Y becoming a significant luxury client.
"Gen Y is an interesting demographic as they spontaneous consumers but have a propensity to cherry pick, making it difficult for luxury brands to cultivate brand loyalty.
"Another interesting trend is a noted increase in the portion of male customers, reflecting a global trend."
While increased omnichannel touchpoints are also driving sales, O'Rourke said Australia's "vague" economic state may affect growth in 2013.