The global market for personal luxury goods is standing strong, despite lingering economic weakness in Europe, reveals Bain & Company report.
“[The global market] is becoming more resilient to economic crises, more responsive to a demanding and highly mobile consumer base, and less reliant on market booms for growth,” says Claudia D’Arpizio, a Bain partner in Milan and leader of the firm’s global luxury goods and fashion practice.
The Global Luxury Goods Worldwide Market Study: Spring 2014 Update also states that Q1 2014 sales revenue growth of the global luxury goods market is in line with last year’s overall figures, between four per cent and six per cent. “With luxury goods, we are seeing the emergence of a new normal: the global market is maturing, stabilising and consolidating,” adds Claudia D’Arpizio.
Regional figures range from a projected decline of approximately six per cent in Russia to an increase of 11 per cent in Japan, states the study. Global spending patterns are noticeably altering as a result of currency devaluations in Russia, Japan, Brazil and Indonesia. “In the GCC region, meanwhile, the luxury goods market has continued to grow fast, between five per cent and eight per cent year on year. The market has been mainly driven by tourism growth (between nine per cent and ten per cent). The resident market has also been growing, but at a slower rate,” says Cyrille Fabre, partner at Bain & Company.
With tourism driving spend on travel retail, and outlet and online shopping, these categories stand as top performers in 2014. Men’s bags and clothing have the greatest momentum, although accessories are currently expected to be the strongest driver of market performance.
Meanwhile, the study points out that Western Europe can expect strong growth figures of between two per cent and four per cent, with the influx of Chinese and Middle Eastern shoppers.
In Russia, a loss of between four per cent and six per cent is expected, as a result of its suffering and contracting domestic market. The Americas, with the largest potential for European brands, is forecast to grow between four per cent and six per cent, while, for Japan, it is predicted to be between nine per cent and ten per cent, as a result of currency devaluation and inflation.
In China, as a result of significant price differentials and the increase of overseas purchasing, the growth is expected to be between two per cent and four per cent. Based on stagnant sales in South Korea, positive performances in Singapore and Indonesia, and investments in Thailand, the Asia-Pacific region is forecast to grow between three per cent and five per cent.
A projected growth of three per cent to four per cent is expected in all other regions in 2014.
Published first on luxurymena.com