According to the latest Altagamma Consensus, the global luxury goods market should register a 5 percent increase in consumption in 2014. Altagamma Consensus is a forecast of trends in the high-end market based on the opinions of leading international analysts, drafted each year by the Altagamma Foundation. Data were presented last Oct. 28 in Milan at the Altagamma Observatory, the annual meeting that provides a snapshot of the world luxury lifestyle industry.
The strongest growth in 2014 is expected to occur in the Middle East and Asia, with both regions registering a 10 percent increase. Latin America is expected to deliver 7 percent growth while the rest of the world should post an 8 percent increase. Growth for Europe and North America is expected to be of 4 percent and 5 percent, respectively.
Another study, the Monitor Altagamma research, carried out by Bain & Co. and Altagamma, looked at the luxury market in 2013. According to this study, worldwide spending on luxury goods will grow by 2 percent this year in terms of euros to €217 billion, or 6 percent on a currency-neutral basis, when compared to results in 2012. The growth is expected to be higher than last year's rate of 5 percent. However, because of the recent strength of the euro, European luxury goods firms will have, overall, lower growth in reported revenues.
Reversing the trends of the last few years, sales in the Americas are estimated to grow in 2013 by 4 percent compared with 2012, surpassing the 2.5 percent growth rate projected for China, even though China's potential growth remains very high. Europe will see a 2 percent increase, mostly driven by purchases by foreigners, offsetting lower consumption levels by local residents. Japan is expected to experience a 12 percent decline in 2013. Areas with a high growth potential include Southeast Asia and Africa both with an 11 percent rise for 2013. The countries in Southeast Asia that are expected to perform well include Singapore, Malaysia, Indonesia, Vietnam and Thailand, while the growth rate in Africa is referred in particular to Angola, Nigeria, Morocco and South Africa.
The retail channel will continue to beat the wholesale segment, and sales of luxury goods through factory outlets should grow everywhere. The strongest growth will occur in the e-commerce channel this year, with a 28 percent rise to around 5 percent of the overall turnover in luxury goods. Footwear is proving to be the best performing segment on the web, especially with regard to women's shoes.
Another study, presented by Global Blue, observed that the European tax-free shopping is a market worth €39 billion. European countries reported a 13 percent increase in the period from January to September 2013 despite the fall in purchases by visitors from Japan, down 29 percent, and Brazil, which declined by 6 percent. The best selling countries were the U.K., which registered a 24 percent increase, Italy, up 16 percent, France, with a 12 percent rise, and Germany, which rose 4 percent. In 2014, European tax-free shopping is expected to register an increase of 14 percent.
Exchange rates will continue to have a negative impact on the development of the sector in 2014, as the euro is expected to remain strong against the main international currencies.