ain & Company Luxury Study report about luxury and fashion showed very different results in different parts of the world. Mainland China market grew 26% during the year to €30 billion and Chinese shoppers accounted for 90% of the luxury market’s growth. Chinese shoppers globally now drive 35% of luxury spending. Japan grew by 4% to €24 billion while the rest of Asia grew by 6%, reaching €42 billion. In the Americas, the market was mainly held up by domestic confidence but “tempered by reduced tourist flows”. Europe saw growth of only 1% to €88 billion. Spain and the UK were among the top performers, driven by tourism in the case of Spain and by the low value of the British pound. Online did grow, it continues to gain share and now accounts for 12% of the market, with consumers “increasingly influenced and enabled by digital channels, also in their physical purchases”. This is “continuously disrupting the physical channel” and it thinks the global network of physical stores could peak in 2020, although it gave no prediction of what sort of a decline might come after that.
The growth of the secondhand market, which reached €26 billion in 2019, is one example of a successful business model, which the luxury customer’s evolving mentality has encouraged. The secondhand market is a potential avenue for luxury brands to reach a new audience and enlarge their customer base. For many customers – according to the report – this may be their first luxury purchase, but luxury brands shouldn’t see this as a threat and should manage it strategically to grasp the full potential of this opportunity”.
Most dynamic categories this year have been jewellery, up 9%l and shoes, also rising 9%, followed by leather goods at 7%, beauty at 3% and watches at 2%. Report expects the luxury customer base to expand to 450 million by 2025, up from 390 million this year, mainly thanks to the growing middle-class, especially from Asia. This will further stimulate the entry-price segments which already represent a sizeable part of the market (35% within leathergoods and 30% in jewellery), as well as the off-price channel, which grew by 11% at current exchange rates in 2019, reaching €36 billion.