Personal luxury goods: +6% in 2018

Feb 24, 2019

The personal luxury goods market in 2018 grew by 6%, for a total turnover of 260 billion euro, compared to a turnover of the entire luxury sector equal to 1,200 billion (+5%).

According to estimates by the Altagamma Foundation, the segment should continue the positive trend in the order of 3-5% per year, to reach a business from 320-365 billion euros in 2025.

Who buys, what and how. Most Chinese consumers will for the most be driving the demand, destined to become 45% of the market (32% in 2018) and buying half of the luxury goods in their country.
In 2018 sales of luxury goods in China grew by 18% to 23 billion euros; Japan followed close behind with an expenditure of 22 billion. In general, retail sales in Asia registered a +7% reaching € 39 billion.

Europe is essentially stable (+1%) with a turnover of € 84 billion, while the Americas have grown by 5% to € 80 billion. Analyzing the different channels, e-commerce took the lion’s share, reaching 27 billion euros (+22%), with the United States at the top (around 44% of the total).
Mainly accessories are being purchased online, followed by clothing, cosmetics, perfumes, jewellery and watches. Retail and wholesale showed more limited increases of +4% and +1%, respectively.
The online channel features among the most popular macro-trends from now to 2025, which will cover 25% of the market value (10% the current share), “cannibalizing” traditional platforms and forcing a rethink of the role of the physical store, no longer a simple point of sale but as a touch point for consumers. The new generations (Millenial Generation Z and the Generation Y) will account for around 55% of the market, and will contribute to increasing the market by 130%.

In this context, the key role played by different cultures, religions and ethnic groups, which will increasingly influence fashion and luxury, should not be underestimated: the change will have to be well interpreted by the manufacturing companies, called upon to design winning and distinctive formulas, aimed at anticipating market trends, with new strategies of customer approach in which the orientation to the new generations cannot be lacking. Success will be guaranteed by the adoption of emerging technologies, which support the transition of brands to future scenarios.