Louis Vuitton, Gucci and Salvatore Ferragamo are Latin America's leading luxury brands, according to industry observers who add the region's elite follow global trends when it comes to choosing their favourite labels.

"Wealthy Latin Americans travel as much and are just as aware of the top international brands as other elite citizens around the world," says a senior luxury consultant requesting anonymity.

He says this is particularly true in Brazil, Mexico, Argentina and Chile where the LVMH group, Gucci and Salvatore Ferragamo have a strong presence.

Armando Branchini, CEO of the InterCorporate fashion consultancy in Milan, agrees, adding that Dior and Armani are also big sellers.

"LVMH, Gucci, Salvatore and Dior are top of mind in Latin America as they are around the world," he says. "Latin Americans follow the brands that are most famous in North America, Europe, China and Japan."

It's little wonder then that Branchini expects these brands to open stores in the region's largest markets in the near to medium term. However, he doesn't expect a major expansion until Brazil and Argentina lower their high import tariffs and cut import red tape which has stalled many seasonal collections from reaching stores on time for profit.

Like other observers, he says these duties are making it expensive for luxury labels to step up their expansion and open shops beyond those used as marketing windows to encourage shoppers to flock to other outlets around the world.

"As long as Brazil and Argentina keep such high barriers they are going to lose money," Branchini says, adding that both governments would benefit from collecting VAT on luxury apparel, bags and shoes, both domestically and from merchandise bought abroad.

Observers expect Brazil and Argentina to eventually lower their duties to enable the local luxury sector to flourish. They say a growing number of local importers have been pressuring both governments to do this and that this will increase on the back of rising demand for luxury fashion in Latin America.

Apart from the main international brands, experts say it's hard for local brands to make a name in Latin America.

This is due to little local support for designers and a lack of critical mass for luxury.

"It's hard for someone born in Mexico, Brazil or Argentina to become a luxury fashion designer with a worldwide awareness," says Branchini. "We had an exception with Carolina Herrera but she had to move to New York and finally sell her company to Puig [the Spanish beauty and fashion company] to raise expansion funds."

Branchini adds it's much easier to become famous in individual markets. "There are 25-30 famous designers in Japan but not outside Japan," he notes, adding that something similar could happen in Brazil or Mexico.

So far Brazilian designers have made a splash in beachwear and accessories with brands such as Havaianas doing well, while in Mexico Macario Jimenez remains the largest international name.

The Miami-based consultant says more quality designer education is also necessary to create more talented designers in Latin America. Investment in aspiring designers is also lacking, he says.

Finally, demand needs to turn more sophisticated.

"Strong and more sophisticated local demand is not there yet, at least not at the level seen in the US or Europe," he says. "Consequently, there isn't a need for as many collections and brands as in other more developed markets."

Adds the consultant: "Demand has been growing steadily, however, and the potential is definitely there."

Click on the links below to read other articles in this management briefing.

just-style management briefing: Latin America luxury market could overtake China

just-style management briefing: Brazil and Mexico lead Latin America's luxury sales

just-style management briefing: Challenges face luxury retailers in Latin America