NEWS : Global personal luxury goods market steady but Chinese shoppers’ share of global luxury purchases drops


Bain & Company’s annual global luxury study, released in collaboration with the Italian luxury goods manufacturers’ industry foundation Fondziona Altagamma, has found that the global luxury market is growing at 4% to an estimated 1.08 trillion EUR in 2016.

China is starting to show signs of recovery but the United States has been in decline. Not unexpectedly, Brexit, the U.S. Presidential election and fears of public attacks in Europe have affected tourism, although the post-Brexit depreciation of the GBP has helped the U.K. In Latin America luxury shoppers are focused on local spending, which is helping to turn the tide in Brazil and maintain last year’s positive trend in Mexico.

Despite increases in their domestic market, China’s contribution to the total luxury market dropped from from 31% in 2015 to 30% in 2016.  Despite this, they still predict that the part that mainland Chinese have to play in global luxury spending will continue to increase thanks to the ever-growing middle class.

A combination of the Chinese government’s imposition of higher tariffs and stricter customs control on cross-border shipping in April 2016 and the depreciation of the Chinese yuan affected overseas spending and has resulted in some global luxury brands adjusting their prices downwards in China.

Hong Kong and Macau continue to decline, down 15%, although the Chinese tourists are going back to Korea after MERS outbreak fears. Southeast Asia has been up 3%, with Singapore attracting spending from China’s Tier 2 and 3 cities. Chinese spending is also boosting Thailand and Malaysia’s performance.

E-commerce is the third largest luxury market globally after the U.S. and Japan, and the leading channel in terms of growth, with 7% penetration in 2016.

Discounted luxury goods (including outlets) represent more than 35% of the personal luxury goods market, and off-price stores comprise more than 30% of the market.

Bain & Company anticipates the personal luxury market will reach 280-285 billion EUR by 2020 (compound annual growth revenue of +3 to +4 percent, beginning in 2017).

For the press release and more information, click on this link.

Categories: Industry news, News


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