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Trade: Coface: Luxury items market went up by 5% in 2018, to 1.2 trillion euro
The luxury items market went up by 5%, to 1.2 trillion euro, because of the accelerated consumption from China, with a growing middle class, consumers from China covering now 33% of global purchases of luxury items and is foreseen to reach 46% of this market, a Coface study shows. At the same time, prognoses are optimistic for this market, despite the expected global economic recession.
According to it, counterfeit products, electronic trade, the importance of consumers from China represent new challenges for the luxury items industry, in the context of a global economic recession, while the health of this market is closely linked to various global factors.
The luxury items market is facing more threats, such as counterfeiting. The market is estimated to reach 1.8 trillion dollars in 2020, but counterfeit products can bring image and financial prejudices for certain brands.
Electronic trade also has a considerable impact on the luxury items industry. Although it represented only 10% of sales in 2018, it is expected to grow to 25% in 2025. However, many brands resist against electronic trade, for fear of counterfeiting on one hand and to maintain a unique tie with the customer by direct purchase in stores, a key element of loyalty and differentiation.
“Prognoses are optimistic, despite the expected global economic recession (Coface estimates a global economic activity of 2.9% in 2019 compared to 3.2% in 2018). Economic activity from China, electronic trade and counterfeit products from China represent risks that can negatively affect the luxury items market, but at the same time, can create opportunities. It is up to luxury brands to remain vigilant in maintaining their specificity, considering the evolution of the environment in which they activate,” Coface representatives say.
In 2017, Coface had about 4,100 employees in 100 countries and registered a business figure of 1.4 billion euro.