Global luxury market: slow but perennial growth

Slower but perennial growth, such is the new norm in the global luxury market, which should reach 223 billion euros in 2014, compared to 217 billion in 2013, according to a study by Bain & Company published on Tuesday.

This year, in terms of personal luxury goods sales, the consulting firm is counting on a 2% growth at current market rates (compared +3% in 2013) and 5% at constant rates (compared to 7%).

Louis Vuitton Spring/Summer 2015 at Paris Fashion Week | Source: Pixel Formula)

The luxury market “is settling into a rhythm of slow but perennial growth,” according to this study carried out in collaboration with the Fondazione Altagamma, which brings together the big names in Italian luxury.

“The downward trend in 2014, due to currency fluctuations, a European economy that is still weak, and other exogenous factors such as the crises in Crimea and Ukraine and the protests in Hong Kong, was compensated by the appetite of Chinese consumers, the vitality of American consumers and a Japanese market that is reviving luxury,” reports the study.

Nevertheless, for the first time this year, the luxury market in continental China is declining, 2% at current market rates and 1% at constant rates, owing to the stricter control of luxury spending and a change in consumer habits, notes Bain & Company, which is thus lowering its initial forecast.

In its studied published in the spring, the firm had calculated a 2% to 4% at constant rates growth in the luxury market in continental China this year.

Nevertheless, the Chinese luxury market remains the fastest growing one, spending “an average three times more abroad than in continental China.”

Growth in luxury sales was strong this year in Japan (+2% at current rates and +10% at constant rates) and on the American continent (+3% at current rates and +6% at constant rates).

Europe shows a 2% growth.

Apart from Japan, China and South America, all of the markets are being strongly pulled by tourist spending.

In Europe, the study notes a general slowdown in luxury purchases by citizens of non-EU countries.

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