World luxury market on the up

Isaac Mostovicz writes that a study predicts that the recession is old news for the luxury sector...

Eight percent growth is the estimate given to global luxury sales this year, according to research group Bain&Company.  The firm estimated that revenues would hit EUR185 billion (US$185 billion) in 2011, surpassing its prior peak of EUR170 billion in 2007.

Last year’s result of 12-percent growth was symptomatic of the world recovering from the economic crisis, but this year’s growth continues the trend and will then settle to an average of five to six percent a year up until 2014, say Bain.

The lead author of the study noted that while luxury was back, there were definite changes in the market. “Luxury has made a brilliant return to the retail stage, but the script has been re-written,” said Claudia D’Arpizio, a Bain partner in Milan, “More demanding customers, generational shifts, new loyalty rules, an increasingly integrated offline and digital customer experience and the continued growth of China and other fast-growing markets are transforming the luxury industry.”

Of all the luxury markets worldwide, China is expected to grow the most, attaining a 25% increase this year, and within five years Bain are predicting China (without Hong Kong and Macao) will be third in the rankings for the world’s biggest luxury markets, behind Japan and the US.

For Japan, however, the forecast reflects the devastating tsunami earlier this year. The country faces a 12-month contraction of five percent and will only start recovering in the third quarter.

Galina Barbascumpa says of this article...

Today, a growing number of people believe that ” the brand they wear say a lot about who they are.” and “They kind of like it when others recognize them as being wealthy”. They feel emotionally connected to all the expressions of passion in the brand-its heritage and values, its strengths and styles.

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