According to a study presented today in Milan by Bain & Company and Italy’s luxury goods association Fondazione Altagamma, worldwide luxury sector sales revenue is forecast to reach $274 billion in 2012, up 10% from last year. The Asia-Pacific region powers the growth with Chinese consumers leading the way, expected to consume a quarter of all global luxury purchases of clothing, accessories, jewelry, cosmetics and art. This is the third straight year of double digit growth for the luxury goods market, prompting Bain partner and lead author of the study Claudia D’Arpizio to call “concerns about market weakness somewhat overblown.” The consultancy expects the upwards trend to continue, predicting worldwide growth to stay steady at 4 to 6 percent per year for the next two years, and reach $325 billion by 2015.
Despite increases in sales revenue, the study shows that rate of growth is starting to slow, largely due slower spending in China caused by some political volatility and concerns about the global economy. However, Bain found that Chinese consumers are still contributing significantly to sales both domestically and abroad. Chinese tourists are already making a third of all the luxury goods purchases in Europe and the “Greater China” market comprising of China, Hong Kong, Macau and Taiwan is forecast to become the sector’s second largest behind the United States, worth almost $35 billion. L2’s much anticipated Digital IQ Index: China will be released in December for a more in depth look at prestige brands in this fascinating market.
The study also highlights that, for the first time, accessories have become the biggest slice of the pie, accounting for 27% of total sales in the luxury market. Leather goods are expected to grow 16% this year to reach estimated $43 billion in sales and shoes are expected to grow 13% to around $15.5 billion in sales. The high level of accessories sales is bolstered by increased levels of spending among males, particularly an interest in more expensive items. These new findings highlight interesting shifts in consumer behavior from previous years and the study notes that Bain is “seeing sharp disparities between brands that are not keeping up with the quickening pace of change in the market and those that are adjusting to shifts in tastes and demographics.” For example, the study shows that younger consumers are more interested in uniqueness than heritage and round-the-clock access rather than exclusivity.
(Image via The China Observer)