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TRENDS AND INSIGHTS IN THE GLOBAL LUXURY GOODS MARKET2014
POWERED BY PASSPORT FROM EUROMONITOR INTERNATIONAL
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NEW INSIGHTS: GLOBAL SNAPSHOT
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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Key Points: What Every Player Wants to KnowNEW INSIGHTS: GLOBAL SNAPSHOT
What’s the global growth trend?
?
Where’s “the next China?”
?
Where’s the value??
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Luxury Goods Sales in Excess of US$317 Billion and Growing…
NEW INSIGHTS: GLOBAL SNAPSHOT
Continued growth Strength from emerging economies
China Spending rising steeply despite government clampdown
Japan A weaker yen bolstering Japan’s penchant for luxury
Affordable luxury Still breaking new ground especially in developed markets
Expanding middle class
Expanding B and C class in emerging economies fuelling a new culture of luxury aspiration
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2008 9 10 11 12 13 14 15 16 17 20180
50
100
150
200
250
300
350
400
450
-10
-5
0
5
10
15
Global Luxury Sales (US$ billion) and Growth 2008-2018
US$ billion Year-on-Year % Growth
US$
bill
ion
% Y
-o-Y
Valu
e G
row
th
Luxury Goods Power On..NEW INSIGHTS: GLOBAL SNAPSHOT
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Category
2013US$
million (current)
2014US$
million (current)
Y-o-Y real
growth 2013-2014
2018US$ million
(current)
CAGR 2013-2018
Designer Apparel (Ready-to-Wear) 132,935 136,785 2.9% 154,299 3.0%
Luxury Jewellery and Timepieces 62,218 65,042 4.5% 78,693 4.8%
Luxury Accessories 51,251 53,488 4.4% 64,652 4.8%
Fine Wines/Champagne and Spirits 29,508 30,600 3.7% 35,931 4.0%
Super Premium Beauty and Personal Care 28,007 28,959 3.4% 33,377 3.6%
Luxury Cigars 5.516 5,635 2.2% 6,077 2.0%
Luxury Travel Goods 4,576 4,754 3.9% 5,512 3.8%
Luxury Writing Instruments and Stationery
2,124 2,160 1.7% 2,376 2.3%
Luxury Electronic Gadgets 1,022 1,043 2.0% 1,236 3.9%
Hard Luxury and Accessories Lead Global GrowthNEW INSIGHTS: GLOBAL SNAPSHOT
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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Emerging Markets Will Continue to Drive GrowthNEW INSIGHTS: EMERGING MARKETS
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Luxury Sales Developed vs Emerging Markets 2008 - 2018
Developed Emerging
% v
alue
sha
re
2013
•19%
2018
•25%
2008
•9%
Much of this impressive growth has come from the emerging markets. Where thanks to continued urbanisation, economic development and the overall love of luxury which has brought a large proportion of new consumers into the luxury market.
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Asia Pacific to Become Regional Leader NEW INSIGHTS: EMERGING MARKETS
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Luxury Sales Fuelled by Expanding Middle ClassNEW INSIGHTS: EMERGING MARKETS
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China Overtakes France and Italy Despite Government ClampdownNEW INSIGHTS: EMERGING MARKETS
2013 20180%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Luxury Goods Top Five MarketsValue Share 2013/2018
US Japan China France Italy ROW
Valu
e sh
are
2012 2016 2020
Population in (‘000) above US$150,000 gross income
US 17,947 24,847 33,856
China 2,081.6 3,635.1 5,396
Japan 3,579.9 3,460.3 3,375
Germany 2,201.4 2,561.3 2,930
Australia 1,316.8 1,877.5 2,438.4
France 1,746.6 2,050.4 2,393.8
UK 1,514.8 1,819.9 2,192.8
Brazil 897.6 1,345.9 1,839.8
Russia 667.9 1,090.3 1,548.8
Italy 1,260.7 1,356.0 1,465.3
Canada 923.3 1,089.6 1,278.0
India 515.1 826.6 1,224.4
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China Set be Number Two in World for Luxury Goods…NEW INSIGHTS: EMERGING MARKETS
China has overtaken France and Italy to become number three in the world. Government crackdown on luxury gifting has led to a slight slowdown in demand but growth potential remains positive.
China's projected 72% value growth by 2018 means China will overtake Japan to become the worlds second largest luxury goods market. China is also forecast to have the second largest population with annual gross income over US$150,000 by 2020 behind the US.
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…China’s New Discerning Consumer Leads Brand to Go WestNEW INSIGHTS: EMERGING MARKETS
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Brazil’s Regional Battle GroundNEW INSIGHTS: EMERGING MARKETS
Brazil’s luxury goods market has been underperforming, given the size of its economy and major brands are yet to extended their presence beyond the three main cities of Rio de Janeiro, Brasilia and São Paulo.
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Brazil’s Import Tariffs Are a Bigger Barrier Than a Weaker EconomyNEW INSIGHTS: EMERGING MARKETS
Topshop, London US$61
Topshop, São Paulo US$94
Gucci, New York US$2,438
Gucci, São Paulo US$4,370
Brazil’s economic slowdown teamed with ultra-high import tariffs and luxury tax is creating a major barrier for international luxury brands and consumers, despite rapid urbanisation, a fast-growing middle class and greater access to consumer credit.
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Beyond China, Brazil is one of the most promising growth markets for luxury goods thank to a surging middle class. It’s population with annual gross income over US$150,000 will grow by 46% to reach 1.4 million people by 2018.
Brazil’s Favourable Demographics Will Help Drive GrowthNEW INSIGHTS: EMERGING MARKETS
• +4.6 billion people in social class A, B and C by 2020
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Brazilians in their late 30s to early 40s had the highest average gross income in 2013. Unlike many of the mature luxury markets such as France and Italy, the very top earners in Brazil fall into the 40-44 age group. These also made up 18% of all Brazilians earning above US$150,000 in 2013.
Brazil Luxury a Young Man’s GameNEW INSIGHTS: EMERGING MARKETS
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2013 witnessed an important shift in the BRIC economies raising questions as to whether they are becoming less important to the global luxury goods industry
Are the BRICs Still Important to the Luxury Goods Growth Story?NEW INSIGHTS: EMERGING MARKETS
• Despite impressive growth rates these countries only account for around 4% of total luxury goods spend . Which is is set to increase to 5% in constant value terms by 2018
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Some Sub-Saharan African economies are becoming more attractive to investors thanks to strong growing consumer markets. These economies are however still very much classed as “frontier” markets and will not overtake the BRIC’s any time soon.
Sub-Saharan Africa Next Luxury Hotspot?NEW INSIGHTS: EMERGING MARKETS
Sub-Saharan Africa is the second fastest growing region after Asia
Pacific and home to five of the top 10 fastest growing markets
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An African Strategy Offers Long-term Investment PromiseNEW INSIGHTS: EMERGING MARKETS
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Sparkling Future for Nigeria’s Luxury Market?NEW INSIGHTS: EMERGING MARKETS
Peru China Nigeria Chile Poland0
50100150200250300350400450500
Champagne: Top Five Global Growth Markets in Constant Value Terms 2007-12
% v
alue
gro
wth
Champagne: Top Five Global Growth Markets in Total Volume Terms 2007-2012
Country % volume growth 2007-12
% volume CAGR 2007-12
Absolute volume growth (mn litres)
2007/12
Peru 502 43 0.1
China 146 20 0.9
Poland 146 20 0.2
Nigeria 130 18 0.4
Australia 99 14 2.0
Between 2007-2012, Nigeria was the third fastest growing market in the world for total value sales of champagne.
WHAT IS PASSPORT
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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Developed Luxury Goods Markets Should Not be OverlookedNEW INSIGHTS: DEVELOPED MARKETS
World’s Top Five Luxury Goods Markets by Value Share 2013
US
Japan
China
France
Italy
ROW
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Developed Markets Help Drive Growth in Affordable LuxuryNEW INSIGHTS: DEVELOPED MARKETS
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Could Japan’s Renewed Growth Rival China’s Impressive Trajectory?NEW INSIGHTS: DEVELOPED MARKETS
China still on course to overtake Japan but investment could start to cool
Luxury brands plan to upgrade stores and increase Japanese footprint
Luxury brands confident enough to raise prices - increase profitability
Increase in foreign luxury spend from Asia - favourable exchange rates
Increase in domestic luxury spend - Japanese cannot afford to shop abroad
Weaker yen - 20% to the US$ in 2013
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BRIC Travellers Boost Luxury Sales in Developed MarketsNEW INSIGHTS: DEVELOPED MARKETS
BRICs: Top Five Developed Market Destinations by Expenditure 2012
• US• France• Germany• Italy• Portugal
Brazil
• Spain• Italy• Germany• France • UK
Russia
• Singapore• US• Switzerland• UK• Hong Kong
India
• Hong Kong• US• South Korea• Singapore• Japan
China
France
Spain
Hong Kong
China
US
0 3 6 9 12 15
Leading Countries for Incoming Tourism Receipts on Shopping 2012
US$ billion
Taiwan
Vietnam
Kenya
India
China
0 3 6 9 12 15
Leading Countries by % CAGR in Out-bound Tourism Expenditure on Shopping
2012-2017
% CAGR 2012-2017
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BRIC Travellers Boost Luxury Sales in Developed MarketsNEW INSIGHTS: DEVELOPED MARKETS
14%annual growth in
outbound shopping spending by Chinese
travellers
Introduction of China Union Pay
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Brazilian Tourism Boom Benefiting US Stores NEW INSIGHTS: DEVELOPED MARKETS
WHAT IS PASSPORT
NEW INSIGHTS: GLOBAL SNAPSHOT
EMERGING MARKETS
DEVELOPED MARKETS
KEY CATEGORY TRENDS
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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Soft Luxury Houses Move into Hard LuxuryNEW INSIGHTS: KEY CATEGORY TRENDS
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Fashion Brands Ramp Up Exposure Across Full Beauty RemitNEW INSIGHTS: KEY CATEGORY TRENDS
Marc Jacobs 2013 Tom Ford 2011Tom Ford Men 2013
Burberry Michael Kors 2013 Tory Burch 2013
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The Parallel Trajectories of Apparel and BeautyNEW INSIGHTS: KEY CATEGORY TRENDS
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Men’s Global Luxury Growth Outpaces Women’s NEW INSIGHTS: KEY CATEGORY TRENDS
Designer Clothing
Designer Footwear
Luxury Sun Glasses
Luxury Bags
Luxury Jewellery
Luxury Timepieces
0
5
10
15
20
25
30
35
40
Global Men’s and Women’s Luxury Categories Retail Value Growth 2008-2013
Men % Growth 2008-13 Women % Growth 2008-13 Men % CAGR 2008-13Women % CAGR 2008-13
% G
row
th
Men +16%
% CAGR3.0
Women+12%
% CAGR2.0
2008
2013
2008
2013
© Euromonitor International
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Is Luxury Manning Up?NEW INSIGHTS: KEY CATEGORY TRENDS
From Mexico City to Beijing, men are putting higher stock in their appearance. This is especially visible in the emerging markets of Asia-Pacific and Latin America where thanks to growth across the young male aspirational consumer, categories like men’s luxury accessories and jewellery are growing faster than women's.
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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The Rise of Online RetailingNEW INSIGHTS: E-COMMERCE
Sales of Luxury Goods by E-Commerce 2008-2013
Value share 2008
Value share 2013
Growth 2008-2013
World 4.3% 5.3% 23%
UK 11.3% 13.6% 20%
Germany 8.5% 10.6% 25%
Japan 8.9% 9.9% 11%
France 6.2% 8.9% 43%
Switzerland 6.9% 7.4% 8%
Hong Kong 0.2% 0.5% 130%
China 0.0% 0.4% 191%
Ukraine 0.1% 0.1% 356%
Philippines 0.1% 0.1% 27%
Malaysia 0.1% 0.1% 76%
Deve
lop
ed
Em
erg
ing
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The Rise of Online Retailing and Social MediaNEW INSIGHTS: E-COMMERCE
Developed
Emerging
WHAT IS PASSPORT
NEW INSIGHTS
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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2013 Saw Flurry of M&A’s Driven by Big Names and Italian TargetsNEW INSIGHTS: M&A
The outlook for 2014 is much the same as 2013, with a number of heavyweight M&A deals in the pipeline
The top acquirers are France based (US$11.2 billion) and top targets are Italian (US$8.2 billion)
LVMH leads at US$10.4 billion with 30 deals since 2010 and 61% of value
There were 26 announced luxury deals in 2013 totalling US$17 billion, with an average premium of 32%
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PASSPORT: LUXURY GOODS DATA UPDATE 2014
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Luxury Goods Hierarchy PASSPORT: LUXURY GOODS DATABASE UPDATES
MARKET SIZES» 15 years of comparable data =
10 years historic + 5 years forecasts
COMPANY AND BRAND DATA» Company data by global brand
owner and national subsidiary/licensee
Brand shares at industry and category level
ADDITIONAL DATA» Luxury shopping malls
» Luxury department stores» Cigar clubs
» 32 market comparative pricing data
Luxury Goods
Designer Apparel (Ready-to-Wear)
Luxury Cigars
Luxury Accessories
Luxury Jewellery and Timepieces
Fine Wines/Champagne and Spirits
Super Premium Beauty and Personal Care
Luxury Travel Goods
Luxury Writing Instruments and Stationery
Luxury Electronic Gadgets
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Country Coverage: 32 Markets PASSPORT: LUXURY GOODS DATABASE UPDATES
FR, DE, NL,
CH, ES, SE,
IT, TR, GB
PL, RO,
RU, UK
IN, CN, ID, HK,
MY, PH, SG,
KR, TW, TH, JP
AU
ZA, UAE
MX, AR,
BR
CA, US
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Strategic Analysis for Greater InsightPASSPORT: LUXURY GOODS DATABASE UPDATES
Global Briefings
Competitor Analysis Datagraphics
Videocasts
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