The market for personal luxury goods is holding up despite lingering economic weakness in Europe, a fomenting market crisis in Russia and destabilising exchange rate fluctuations globally, a new report has said.
Bain & Company's 'Global Luxury Goods Worldwide Market Study, Spring 2014 Update', released recently in Milan, says that sales revenue growth in the first quarter of 2014 is in line with 2013's full-year figures and is expected to persist through the rest of the year.
Overall growth for the first quarter extends the 2013 full year trend of 4-6 per cent – possibly a 'new normal' growth pattern according to Bain – with regional figures ranging from a projected 2014 decline of up to six per cent in Russia to an increase approaching a record 11 percent in Japan.
"With luxury goods, we are seeing the emergence of a new normal... more resilient to economic crises, more responsive to a demanding and highly mobile global consumer base, and less reliant on market booms for growth," said Claudia D'Arpizio, a Bain partner in Milan and leader of the firm's Global Luxury Goods and Fashion Practice.
Currency devaluations in Russia, Japan, Brazil, and Indonesia are reducing or altering shopping and spending patterns globally, with resulting weaknesses offset by promising projections for Western Europe and strong projected growth in the US. Outside of Japan, Asia Pacific markets are strongest in Southeast Asia, followed by China and South Korea.
China's consumer base leads the world in terms of overall consumption. The country's international purchasing patterns and consumer profile are sharply evolving, with significant touristic flows into all regions of the world. Spending from China will grow the fastest in Asia Pacific, followed by North America and Western Europe.