Majors

Global Luxury Goods Market Settles into ‘New Normal’

MajorsJun 21, 2019

Global Luxury Goods Market Settles into ‘New Normal’

Bain & Co. said spending on global luxury goods grew 4-6 percent last year and it forecasts the same for 2019.

Milan—The global personal luxury goods market has reached a “new normal” pattern of growth after strong performances in both 2017 and 2018, according to Bain & Co.

In its recently released “Bain Luxury Goods Worldwide Market Study, Spring 2019,” the management consulting firm reported that the market grew 6 percent year-over-year in 2018 to approximately $293.63 billion in sales.

An acceleration in domestic spending from mainland China consumers and an increase in European tourism drove the growth, though the report also noted that moderate growth is being seen in most markets.

Bain expects sales to remain steady in 2019—4 to 6 percent growth (at constant exchange rates), with sales totaling between $306.07 and $311.71 billion.

In the Americas, the U.S. luxury market was “tepid, with mild growth” throughout 2018.

The new tax reform plan created some uncertainties for consumers and negatively impacted domestic spending on personal luxury goods, Bain said, while malls and department stores continued to struggle with decreasing foot traffic.

Mono-brand stores in the region, meanwhile, maintained a positive growth trend.

Bain & Co. is forecasting 2 to 4 percent growth in the Americas this year, with a rise in domestic consumption in full-price stores but fewer Chinese tourists.

Meanwhile, despite socio-political turmoil in the U.K. and France, Europe also saw positive growth last year due to an influx of tourism spurred by the Euro’s weakening against all major currencies.

Ongoing turmoil in the region, as well as a weakening macro-economic outlook, continue to pose a threat to luxury goods spending, with a modest 1 to 3 percent growth forecast for 2019.

Mainland China continues to reign as a dominant market for luxury goods, as local consumers show a strong preference for purchasing in the domestic market; price harmonization, consumer-centered marketing strategies and government initiatives are all to thank for this trend.

“Solid” consumer confidence and a willingness to spend, especially when it comes to the younger generations, are expected to drive year-over-year-growth of 18 to 20 percent in mainland China in 2019.

Japan is still an “exclusive and attractive” market for luxury brands, Bain said, with forecasted growth of 2 to 4 percent in 2019 and tourist spending expected to rise ahead of the Tokyo 2020 Olympics next summer.

The remaining Asian regions also have a positive outlook, Bain added—apart from Hong Kong and Macau, which continue to lose ground to mainland China—and is expected to

grow by between 10 and 12 percent.

A growing middle class with increasing disposable incomes is propelling Indonesia, the Philippines and Vietnam, while sustained growth in South Korea comes from local consumers and a slight tourism rebound.

Meanwhile, the luxury markets across the rest of the world are expected to be flat or see a slight decrease in 2019, with the Middle East remaining stagnant as consumer spending moves away from the domestic market.

Macro Trends in Luxury
In its report, Bain also identified five trends that likely will shape the next generation of luxury for the long term.

1. A new generation
Bain said the Chinese Gen Z demographic is “the segment to watch”—they’ll have significant spending power as “proud and empowered impulse buyers.”

2. Post-ownership
Bain said it anticipates a paradigm shift in consumption that will favor access over ownership; think: the sharing economy, rentals and the second-hand market.

3. Afterlife
Sustainability and social responsibility will be the focus, based on ideals centered on the environment, human labor and animal welfare.

4. Beyond physical
Digital will disrupt the entire luxury value chain and put the focus on luxury experiences over products.

5. Above volume/price
Customer networks will be the new measure of value.

“It’s important to highlight the role that insurgent brands will play in the luxury sector,” said Federica Levato, a partner with Bain and co-author of the study. “They will challenge established brands, pushing for a real paradigm shift with a more creative approach that goes beyond the product itself and impacts all facets of business, ultimately creating a more direct and continuous dialogue with consumers.”
Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.

The Latest

David Ettinger
IndependentsMar 28, 2024
David Ettinger of Bechdel Jewelers Dies at 69

He’s remembered as a “font of passion,” leaving behind a legacy of dedication to his craft and community.

Jewelers of America logo
IndependentsMar 28, 2024
JA to Host Series of Learning Workshops

The first one will take place next month during the Jewelers of Louisiana’s and Mississippi Jewelers Association’s conventions.

Jaeger-LeCoultre Madison Avenue NYC store
WatchesMar 28, 2024
Peek Inside Jaeger-LeCoultre’s Revamped NYC Flagship

The redesigned boutique features interactive displays and a workshop space for hands-on learning about watchmaking.

Jewelers of America Fly In Washington, D.C.
Brought to you by
How Jewelers of America Represents Your Business

For over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.

Asian Star’s diamond manufacturing facility in India
SourcingMar 27, 2024
Compliance, Caution, and Concern: The Current Outlook of Indian Diamantaires

There is a willingness to comply with new government-mandated regulations, with an insistence that they should be practical and realistic.

Weekly QuizMar 21, 2024
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Kira Diam solar plant
Lab-GrownMar 27, 2024
Indian Lab-Grown Diamond Manufacturers Keep Growing

A combination of factors is driving growth in the industry despite the precipitous drop in prices across the board.

Bharat Ratnam, a Mega Common Facilitation Centre (CFC)
SourcingMar 27, 2024
Reinvigorating SEEPZ, the Epicenter of India’s Studded Jewelry Exports

The zone’s modernization will enhance and increase India’s jewelry manufacturing capabilities while aiding small and mid-sized businesses.

BTYB-HoBrothers-updated.png
Brought to you by
The Scalable, Professional, and Effortless Solution for High-Demand Custom Jewelry Retailers

Ho Brothers offers scalable solutions for the future of custom jewelry.

SRK Empire and SRK House
Policies & IssuesMar 27, 2024
SRK Exports’ Journey Toward Net Zero Impact

By the end of this year, SRK’s diamond manufacturing complexes will achieve net zero emissions, one of an impressive array of achievements.

Georgia May Jagger Tommy Hilfiger ad campaign
FinancialsMar 27, 2024
Movado’s Full-Year Sales Sink 11%

The company plans to invest $25 million in marketing initiatives to boost awareness around its namesake and licensed brands.

Hand holding shopping bags
SurveysMar 27, 2024
Consumer Confidence Held Steady in March

Optimism about the current state of the economy was offset by anxiety around inflation and the political environment.

Bernadette Mack
Policies & IssuesMar 27, 2024
Mercury Free Mining Hires Bernadette Mack

The former WJA executive director is MFM’s new managing director.

April Is Diamonds Do Good Month
Policies & IssuesMar 27, 2024
Diamonds Do Good Announces Its April Initiative

DDG encourages retailers to educate customers on the positive impact of purchasing natural diamonds.

National Jeweler columnists Duvall O’Steen and Jen Cullen Williams
ColumnistsMar 26, 2024
Creative Connecting: AI Tools and Tips for Social Media

Jen Cullen Williams and Duvall O’Steen explore how jewelers can save time and money by using AI to analyze engagement and create content.

Interior of Miami Lakes Jewelers
IndependentsMar 26, 2024
Miami Lakes Jewelers to Close After 37 Years

The Florida store’s owner Miguel Gonzalez is retiring.

 International Gemological Institute
GradingMar 26, 2024
IGI Announces Tech for ID’ing Lab-Grown Colored Diamonds

The lab stresses the importance of accurate identification, as the difference in price is “substantial.”

Kendra Scott lab-grown diamond jewelry
CollectionsMar 25, 2024
Kendra Scott Debuts Lab-Grown Diamond Fashion Jewelry

The brand also plans to expand its retail footprint from 138 to 200 stores over the next three years.

Instappraise logo NAJA logo
Events & AwardsMar 25, 2024
NAJA, Instappraise Offering Scholarships for Aspiring Jewelry Appraisers

One is reserved for a NAJA member, the other for a non-member.

Carie Lehrke and Megan Mattice
MajorsMar 25, 2024
Borsheims Announces New VP of HR, Assistant Manager

Longtime employees Carie Lehrke and Megan Mattice have received promotions.

My Next Question graphic vintage jewelry webinar
Recorded WebinarsMar 22, 2024
Watch: How to Buy and Sell Vintage Jewelry

Three guests joined National Jeweler and Jewelers of America to discuss trending time periods, spotting reproductions, and more.

Chris Clipper and Robert Lepere
MajorsMar 22, 2024
David Yurman Announces New CFO, Chief People Officer

Chris Clipper and Robert Lepere join the company with 50 years of combined experience.

Nakard pyrite earrings
CollectionsMar 22, 2024
Piece of the Week: Nakard’s Pyrite Earrings

The trendy, metallic earrings wink at classic spring colors.

Stock image of police cars with their lights on
CrimeMar 21, 2024
Sparks Fly as Burglars Lose Safe on California Freeway

JSA said a man and woman pulled the safe out of an Oakland jewelry store but couldn’t quite get it into their van.

Grizzly Mining rough emeralds
SourcingMar 21, 2024
Grizzly Sells 4,145-Carat Emerald for Over $1M

The miner’s March auction generated $19 million.

Helen McCluskey
MajorsMar 21, 2024
Signet Jewelers Names New Board Chair

Helen McCluskey will succeed H. Todd Stitzer when he meets his 12-year term limit in June.

Julia Roberts wearing a Chopard necklace
CollectionsMar 20, 2024
Julia Roberts Co-Designs New Chopard Jewelry Collection

“Chopard x Julia Roberts” showcases the first gems cut from the 6,000-carat-plus “Insofu Emerald."

Tanzanite white gold ring Jared
FinancialsMar 20, 2024
Signet’s Q4 Same-Store Sales Sink 10%

The jewelry giant also posted a double-digit drop in same-store sales for the full year.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy