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Asia-Pacific Consolidates Position as Largest Luxury Goods Market

China and emerging markets will spur strong jewelry demand again in 2012.
Oct 4, 2012 7:55 AM   By Dilipp S Nag
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RAPAPORT... Asia-Pacific’s share of the global luxury consumer market grew for the second consecutive year in 2011, overshadowing  growth from more mature markets such as Europe and the Americas, according to  research from Mintel, a market intelligence provider.

The Asia-Pacific, which overtook Europe to become the largest regional luxury goods market in 2010 with a 36 percent share, continued its upward trajectory in 2011 as its market share grew to account for 38 percent, the researchers noted. Europe’s share of the global market dropped two percentage points from the previous year to 33 percent in 2011 and the Americas fell one percentage point to 25 percent, while the share of other regions -- including the Middle East, Africa and India -- grew slightly to 4.4 percent in 2011.

The researchers noted a 23 percent year-on-year rate of growth specifically for the watches and jewelry category in 2011, the same rate as in 2010, outpacing all categories of luxury goods for a second consecutive year. Mintel concluded that despite softer economic growth in China and other emerging markets, and the bleak European economy, there is little sign that the jewelry category is slowing. The firm expects watches and jewelry to defy macroeconomic data and post strong growth rates of around, or in excess of, 20 percent in 2012.

However, growth for fashion and leather goods slowed to 17.6 percent in 2011 from 20.6 percent in 2010. Mintel expects growth rates for 2012 to soften more but  does not expect a major slowdown. Mintel stated that annual growth for the perfume and cosmetics category stood at 11.6 percent in 2011, down from 12.9 percent one year earlier. The slight drop was attributed to  strong comparable sales from the prior year, it noted.

In absolute terms, double-digit revenue growth was seen across all four regions in 2011 but Asia-Pacific’s growth in excess of 20 percent overshadowed that seen in Europe and the Americas.

“In Europe, much of the growth in luxury goods sales in 2011 can be attributed to tourist spending, particularly from Russia and Asia-Pacific, underlining that Chinese luxury-goods consumers encompass two markets, domestic and overseas,” said Paul French, Mintel's  chief China market strategist. “Due to high taxes on luxury goods in China and greater global travel opportunities for Chinese citizens those PRC shoppers desiring luxury goods are increasingly purchasing abroad effectively 'arbitraging' their purchasing internationally.”

Overall, the global luxury consumer goods market, excluding consumables and automobiles, grew by 14 percent in 2011 and came close to $258 billion (EUR 200 billion) at retail selling prices, the researchers stated. Demand was particularly strong from emerging markets and especially in the Asia-Pacific region.

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Tags: africa, americas, Asia-Pacific, China, Cosmetics, Dilipp S Nag, Europe, fashion, India, Jewelry, Leather goods, luxury, middle east, perfume, Rapaport, US, watches
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