Findings from a new report by Euromonitor International, indicate that in 2013, luxury goods sales will exceed $318 billion worldwide, representing a year-on-year real value gain of three percent, driven by emerging markets and ‘affordable luxury’ brands.

The 2014 edition of its annual Passport: Luxury Goods report, contains data from 32 countries on nine personal luxury categories like apparel, accessories and jewelry. The report states that despite continued macroeconomic uncertainty and sluggish profit from major luxury brands, the industry’s growth prospects are being buoyed by a burgeoning middle class in emerging markets across Latin America, Asia Pacific and Africa. Spending is projected to increase by more than 35 percent over the next five years, says the report.

According to the study, India was the most dynamic luxury market over the 2008 to 2013 period and is forecast to grow by a further 86 percent in constant value terms over the five years to 2018, followed by China at 72 percent.

Since the start of the firm’s luxury goods research practice back in 2004, Western Europe has been the “clear leader” in luxury consumption and has accounted for more than 33 percent of all luxury spending in the past year. However, with luxury consumption in Asia Pacific expected to grow 170 percent over the next five years, the region is set to dethrone Western Europe as early as 2018.

Luxury brands are expanding their jewelry and beauty ranges. Brands like Burberry are buying back their cosmetics licenses from the industry’s big players and shoppers are buying into the brands’ complete lifestyle offering.

“Affordable luxury” brands, like Michael Kors and Coach, have also made gains in established and emerging markets, according to the report.