Global luxury market exceeds €250 billion
25/05/2016
As in previous years at this time, Bain has completed a study into the luxury market with Italian luxury goods brands’ association Fondazione Altagamma. According to the study, a slow last quarter of 2015 led to its being a lower-growth year than many companies hoped. There was decreased tourism across Europe and a quieter-than-expected holiday season in the US. Other factors the report mentions are instability in the Middle East and a downturn in the Chinese economy.
According to Bain, the 2015 slowdown seeped into the first quarter of 2016 with only 1% growth, a trend that it expects to continue throughout the year.
“The luxury market is stuck in a holding pattern for the foreseeable future,” said Claudia D’Arpizio, a Bain partner and lead author, on releasing the study at a presentation in Milan. “All eyes are again on China, which is the key to unlocking recovery around the world, and the US, where local consumption is failing to offset decreased tourism. Consumers’ changing purchasing patterns, including a reshuffling of tourism and revitalised local spending in Europe, will likely do little to drive luxury brand growth much beyond the low single digits.”
Bain anticipates the personal luxury goods market will continue to experience “measured growth”, of 2%-3% until 2020, reaching an estimated €280-€295 billion in revenue by then. However, it has said clearly that this outcome is “heavily contingent” on continuous growth in China.
According to Bain, Chinese shoppers will make up almost 35% of global luxury consumers in the next four years, well ahead of US and European consumers. Recovery among mature market consumers, “due to luxury brands’ renewed efforts to regain consensus and trust”, will also help propel the market forward.
Image courtesy of Fondaione Altagamma member Salvatore Ferragamo.
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