China to lift luxury sector sales, says consultancy
28/10/2009
Fast-growing luxury sector in China will lead the industry to growth next year as well as reducing the decline in 2009 than it was expected, according to a study published by Milan-based consultancy Bain & Co. The consultancy expects luxury goods sales this year to fall 8 percent - instead of the 10 percent as forecasted in April - and grow 1 percent next year to 153 billion euros (US$228 billion), after two years of contraction.
Jewellery and watch sales might drop by 18 percent this year. However, emerging markets in Asia, particularly China, has shown an increase in sales. Bulgari chief executive Francesco Trapani said this month that sales at the world's third-largest jeweller improved in the second half, led by gains in Asia, its biggest market. That followed similar comments by Gucci, owned by PPR, and Hermes International.
Bain forecast sales in 2009 would fall 16 percent in the US, 10 percent in Japan and 8 percent in Europe compared with 2008. But these falls would be partially offset by 10 percent projected growth in Asia, of which China accounts for 12 percent. "Aspirational luxury shoppers in Asia and other emerging markets are fuelling sales in 2009," said Claudia D'Arpizio, partner in the company.
Although China will dominate the luxury goods market in terms of number of consumers, it will take some time before the amount they spend equals that of the mature markets. Chinese spending on luxury goods is forecast at 6.6 billion euros (US$9.9 billion) this year, against 44 billion euros (US$66 billion) in the US, 59 billion euros (US$88.53 billion) in Europe and 19 billion euros (US$28.5 billion) in Japan, according to Bain.
