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Global Luxury Market Crosses Trillion-Dollar Milestone in 2015: Bain

Nov 2, 2015 11:28 AM   By Rapaport News
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RAPAPORT... The worldwide luxury markets, as tracked by Bain & Company, collectively surpassed the $1 trillion in sales milestone in 2015, the global management consultancy firm said.

Personal luxury goods, including jewelry, climbed to above $275.6 billion (EUR 250 billion) to $1.1 trillion. That represents a 5 percent year-on-year growth, with calculations based on constant exchange rates, Bain said in its "Luxury Goods Worldwide Market Monitor" released October 29.

The personal luxury goods market in which accessories account for almost a third recorded a 13 percent jump at constant exchange rates, or 1 to 2 percent in real terms.

Three segments - high-end cars, luxury hospitality and fine arts - out of ten were the main drivers of headline growth as they account for about 80 percent of the market. Global currency fluctuations and continued international tourism by “borderless” consumers propped the increase in personal goods. Global jetsetters flocked to Europe and Japan to capitalize on a weaker euro and yen.

The U.S. market, while still the largest for luxury products at $87.1 billion (EUR 79 billion), was not robust in constant exchange-rate terms as a strong dollar deterred many global tourists, Bain said. While local consumption grew, it was barely sufficient to offset the lost revenue from tourism. That said the New York City luxury market remains larger than that of Japan in terms of value.

Asia saw a poor year at constant exchange rates because of a slower mainland China and sharp drop in sales in Hong Kong and Macau, Bain said. Chinese consumers do, however, make up the largest national slice of the luxury pie, at 31 percent of global purchases, followed by Americans on 24 percent and Europeans pegged at 18 percent.

"For years, we have known that they [Chinese consumers] spend far more abroad than in Mainland China, but what's changing is that they're spending little money in historically popular destinations such as Hong Kong and Macau," Federica Levato, a Milan-based principal at Bain and co-author of the study, said in the report. They “are instead gravitating to new locales such as Europe, South Korea or Japan to benefit from currency fluctuations that drive favorable price gaps," Levato said.

The 14th edition of Bain’s luxury market report was released in Milan in collaboration with Fondazione Altagamma, the industry foundation for Italian luxury goods manufacturers.
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Tags: americas, China, luxury, personal goods, Rapaport News, retail, US
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