CONSUMERS

Global Luxury’s Growth in 2017 Driven by Strong Showing in China

by

Danny Parisi

|

This is the featured image caption
Credit: This is the featured image credit

The Asia-Pacific region experienced the most growth out of any region in the world in 2017, primarily because of an increase in domestic luxury goods consumption in mainland China.

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

The Asia-Pacific region experienced the most growth out of any region in the world in 2017, primarily because of an increase in domestic luxury goods consumption in mainland China.

While the overall global luxury business is finishing 2017 with a healthy 4 percent growth, the year ahead is teeming with risks and potential pitfalls for brands.

This data comes from Euromonitor’s annual luxury goods data research, which delves into the performance of various luxury sectors throughout the year and analyzes what the next year will be like. Despite strong showings in 2017, next year may not be so easy for the top brands to navigate.

"Indeed, political turmoil aside, 2017 has brought further dramatic changes in the global consumer landscape, as consumers have reassessed their priorities and increasingly asked themselves what they truly value in luxury goods," said Fflur Roberts, head of luxury goods research at Euromonitor International, London.

"Preferences are shifting from ownership and acquiring new things to acquiring more meaningful experiences and from high quantity to high quality and overall value," she said.

"This is having a significant impact on the way luxury brands and retailers do business, with existing companies adapting their strategies to stay ahead of the consumer."

Join Luxury Society to have more articles like this delivered directly to your inbox

Global growth

At a time when the political world is in turmoil and populism is on the rise, luxury is becoming less about showing off wealth and more about what consumers find meaningful. Luxury consumers the world over are increasingly looking for the rare, unique and unexpected, with sustainability also playing an increasingly important role in purchasing decisions.

This year was marked by significant changes in the global luxury scene, with particular emphasis on the growing importance of Asia, and China specifically, to luxury brands.

The Asia-Pacific region experienced a 9 percent growth rate in 2017, with the large majority of this being driven by an increase in domestic consumption in mainland China.

"There are clear pockets of growth in China, with some categories, such as luxury cars, performing above average," Euromonitor's Ms. Roberts said. "Indeed, China’s sales of luxury cars increased by 16 percent in 2017, with an 82 percent rise in value sales expected over the 2012-2022 time series."

Image credit: Euromonitor. Image: Total luxury growth globally.

Outside of Asia, the Americas continue to underperform, with Euromonitor predicting a decline of 4 percent in luxury consumption in that region.

Underperformance in the Americas can be attributed to a number of factors, including political instability and a steady decline of international travelers to the United States.

In Europe, a similar situation is unfolding. Countries in Western Europe are not performing well in luxury consumption, with France having its second-consecutive year of decline in luxury goods sales.

However, Euromonitor stresses that this is a decline in relation to previous years, and that Europe remains a stronghold of global luxury accounting for half of the global market.

Interested in learning more about
China
and how it affects your brand?

China's rise

Euromonitor’s data in China is consistent with brand strategy throughout 2017.

Likely due to Chinese consumers' eagerness to adapt to digital, new data from the Global Ecommerce Leaders Forum shows that leading retailers are focusing on China as they modify their online strategies.

While online retail platforms such as Tmall are highly influential on the Chinese shopper, brands are seeking more value and deeper relationships. Brands from the United States are using these platforms to gain a better stronghold on China.

U.S. jeweler Tiffany & Co.’s worldwide net sales increased 3 percent to $976 million thanks to sales growth in most regions during the third quarter of 2017.

Image credit: Euromonitor. Image: Experience outpaces goods.

Ended Oct. 31, Tiffany’s third-quarter sales increase was attributed to its fashion jewelry and high, fine and solitaire jewelry categories, during a time when the brand is working to further diversify its product offering. As for its nine-month year-to-date results, also ended Oct. 31, Tiffany’s worldwide net sales totaled $2.8 billion, 2 percent above the year prior, and comparable store sales declined by 2 percent.

Outside of China, luxury brands around the world will be faced with both challenges and opportunities in the coming year.

"Overall forecast growth rates remain healthy for 2018 (5 percent in real terms), although performance will vary substantially across different regions, countries and categories," Euromonitor's Ms. Roberts said.

"Luxury cars, fine wine/Champagne and spirits and luxury hotels yet again are forecast to provide a much-needed boost to global luxury sales," she said.

"There will also be a myriad of other opportunities to tap into for luxury brands: upstream technology and digital innovation; improving green credentials and sustainability practices, as well as shopping cycles to meet consumers’ need for instant gratification; or redesigning the future of bricks-and-mortar stores, to name but a few."

Originally published on Luxury Daily. Republished with permission.

Danny Parisi
Danny Parisi

Staff writer at Luxury Daily, New York.

Bio Not Found

CONSUMERS

Global Luxury’s Growth in 2017 Driven by Strong Showing in China

by

Danny Parisi

|

This is the featured image caption
Credit : This is the featured image credit

The Asia-Pacific region experienced the most growth out of any region in the world in 2017, primarily because of an increase in domestic luxury goods consumption in mainland China.

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

The Asia-Pacific region experienced the most growth out of any region in the world in 2017, primarily because of an increase in domestic luxury goods consumption in mainland China.

While the overall global luxury business is finishing 2017 with a healthy 4 percent growth, the year ahead is teeming with risks and potential pitfalls for brands.

This data comes from Euromonitor’s annual luxury goods data research, which delves into the performance of various luxury sectors throughout the year and analyzes what the next year will be like. Despite strong showings in 2017, next year may not be so easy for the top brands to navigate.

"Indeed, political turmoil aside, 2017 has brought further dramatic changes in the global consumer landscape, as consumers have reassessed their priorities and increasingly asked themselves what they truly value in luxury goods," said Fflur Roberts, head of luxury goods research at Euromonitor International, London.

"Preferences are shifting from ownership and acquiring new things to acquiring more meaningful experiences and from high quantity to high quality and overall value," she said.

"This is having a significant impact on the way luxury brands and retailers do business, with existing companies adapting their strategies to stay ahead of the consumer."

Join Luxury Society to have more articles like this delivered directly to your inbox

Global growth

At a time when the political world is in turmoil and populism is on the rise, luxury is becoming less about showing off wealth and more about what consumers find meaningful. Luxury consumers the world over are increasingly looking for the rare, unique and unexpected, with sustainability also playing an increasingly important role in purchasing decisions.

This year was marked by significant changes in the global luxury scene, with particular emphasis on the growing importance of Asia, and China specifically, to luxury brands.

The Asia-Pacific region experienced a 9 percent growth rate in 2017, with the large majority of this being driven by an increase in domestic consumption in mainland China.

"There are clear pockets of growth in China, with some categories, such as luxury cars, performing above average," Euromonitor's Ms. Roberts said. "Indeed, China’s sales of luxury cars increased by 16 percent in 2017, with an 82 percent rise in value sales expected over the 2012-2022 time series."

Image credit: Euromonitor. Image: Total luxury growth globally.

Outside of Asia, the Americas continue to underperform, with Euromonitor predicting a decline of 4 percent in luxury consumption in that region.

Underperformance in the Americas can be attributed to a number of factors, including political instability and a steady decline of international travelers to the United States.

In Europe, a similar situation is unfolding. Countries in Western Europe are not performing well in luxury consumption, with France having its second-consecutive year of decline in luxury goods sales.

However, Euromonitor stresses that this is a decline in relation to previous years, and that Europe remains a stronghold of global luxury accounting for half of the global market.

Interested in learning more about
China
and how it affects your brand?

China's rise

Euromonitor’s data in China is consistent with brand strategy throughout 2017.

Likely due to Chinese consumers' eagerness to adapt to digital, new data from the Global Ecommerce Leaders Forum shows that leading retailers are focusing on China as they modify their online strategies.

While online retail platforms such as Tmall are highly influential on the Chinese shopper, brands are seeking more value and deeper relationships. Brands from the United States are using these platforms to gain a better stronghold on China.

U.S. jeweler Tiffany & Co.’s worldwide net sales increased 3 percent to $976 million thanks to sales growth in most regions during the third quarter of 2017.

Image credit: Euromonitor. Image: Experience outpaces goods.

Ended Oct. 31, Tiffany’s third-quarter sales increase was attributed to its fashion jewelry and high, fine and solitaire jewelry categories, during a time when the brand is working to further diversify its product offering. As for its nine-month year-to-date results, also ended Oct. 31, Tiffany’s worldwide net sales totaled $2.8 billion, 2 percent above the year prior, and comparable store sales declined by 2 percent.

Outside of China, luxury brands around the world will be faced with both challenges and opportunities in the coming year.

"Overall forecast growth rates remain healthy for 2018 (5 percent in real terms), although performance will vary substantially across different regions, countries and categories," Euromonitor's Ms. Roberts said.

"Luxury cars, fine wine/Champagne and spirits and luxury hotels yet again are forecast to provide a much-needed boost to global luxury sales," she said.

"There will also be a myriad of other opportunities to tap into for luxury brands: upstream technology and digital innovation; improving green credentials and sustainability practices, as well as shopping cycles to meet consumers’ need for instant gratification; or redesigning the future of bricks-and-mortar stores, to name but a few."

Originally published on Luxury Daily. Republished with permission.

Danny Parisi
Danny Parisi

Staff writer at Luxury Daily, New York.

Bio Not Found

Related articles

CONSUMERS

5 Must Know Facts About China’s Millennials

CONSUMERS

Report: Decoding Luxury Marketing Milestones in China: Lunar New Year

CONSUMERS

In 2024, expect more of the same. Now is the time to optimise.