Professional Documents
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Claudia DArpizio is a Bain & Company partner. Federica Levato is a principal, and Daniele Zito is a consultant. All three are based out of the
firms Milan office. Jolle deMontgolfier is a practice area senior director in the firms Paris office. All four are part of Bains Global Retail and
Luxury practices.
Contents
1.
2.
3.
4.
5.
Page 1
Executive summary:
Slower but steadier growth and a shift to consumers
The 13th edition of the Bain Luxury Study, published by Bain & Company for Fondazione Altagamma, the
industry association of the manufacturers of Italian luxury goods, analyzed recent developments in the
global luxury-goods industry.
Page 3
Page 4
Page 5
1.
Luxury-spending
trends in 2014
The global luxury market comprises nine segments; personal luxury goods are the focus of the
Bain Luxury Study
Luxury
cars
Designer
furniture
Private
jets
Personal
luxury
goods
Yachts
Luxury
hospitality
Luxury
cruises
Fine food
Luxury
wines and
spirits
Source:Bain
Bain&&Company
Company
Source:
The global luxury market exceeded 850 billion in 2014, enjoying healthy growth that was driven
primarily by luxury cars and hospitality
Worldwide luxury market, 2014E (billions)
58
39
18
19
865*
150
351
223
Growth,
20132014E (%)
Personal
luxury
goods
Luxury
cars
Luxury
hospitality
Fine wines
and spirits
Fine
food
Designer
furniture
Private
jets
Yachts
Luxury
cruises
Total
2014E
10
-1
Page 8
The market for personal luxury goods has nearly tripled over the past 20 years, but growth is leveling off
September
11
Spike in $/
SARS exchange rate
Socioeconomic
turbulence
Subprime and
financial crisis
212
218
223
192
128
73
77
85
92
Sortie du temple
96
133
133
128
136
147
159
170
167
Democratization
3%
153
10%
11%
13%
108
2%
173
+5%
+7%
+5%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
Source:Bain
Bain&&Company
Company
Source:
Page 9
2.
The regional lens
218
212
223
CAGR,
20072009 (%)
CAGR,
20092014 (%)
-1
Asia
10
15
Japan
-9
-10
-5
192
170
173
167
153
Americas
Europe
2007
2008
2009
2010
2011
2012
2013
2014E
Source:Bain
Bain&&Company
Company
Source:
In 2014, the Americas region was confirmed as a key growth engine; Asia suffered from unexpected events
and currency effects
Personal-luxury-goods market, by region, 20072014E (billions)
218
5%
Asia
21%
223
5%
21%
Year-on-year comparison,
2014E versus 2013 (%)
+2
+5
+4
+6
+1
+5
8%
8%
+2
+10
Americas
32%
32%
+3
+6
Europe
34%
34%
+2
+2
At current
exchange rates
At constant
exchange rates
Japan
2013
2014E
Source:Bain
Bain&&Company
Company
Source:
Page 12
64.5
China
France
Italy
18.1
16.1
15.3
15.0
13.4
Japan
10.4
9.1
7.9
6.8
4.6
US
Japan
Italy
France
China
UK
Germany
South
Korea
Hong
Kong
Middle
East
Russia
-1
-2
-18
10
-1
-1
-7
Source:Bain
Bain&&Company
Company
Source:
Since 2009, the US has contributed three times as much absolute-value growth as Mainland China
Personal luxury goods: growth contribution, by market, in absolute value, 20092014E (billions)
23.1
7.9
4.8
US
China
UK
4.1
South
Korea
3.8
France
3.8
Hong
Kong
Source:Bain
Bain&&Company
Company
Source:
Page 13
2.7
Germany
2.0
Middle
East
1.0
0.7
Italy
Japan
0.1
Russia
New York City alone remains bigger than the second-largest global market
Personal luxury goods, top cities, 2014 (billions)
22.3
18.1
11.3
10.1
7.9
New York
Japan
Paris
London
7.4
Hong
Kong
6.4
Tokyo
Seoul
5.3
5.1
Beijing
Milan
5.1
4.5
3.5
Las
Shanghai Moscow
Vegas
3.4
2.3
Munich
Dubai
Source:
Source:Bain
Bain&&Company
Company
Mainland China contracted in 2014, yet purchases by Chinese consumers represent about a third of the
global market
Personal-luxury-goods market in China, 20072014E (billions)
15.0
15.3
15.0
12.9
7%
Rest of world
9%
Other Asian
+0%
CAGR
29% Chinese
9.6
7.1
+27%
CAGR
13% Japanese
5.9
4.5
22% American
21% European
2007
2008
2009
2010
2011
2012
2013
2014E
2000
Source: Bain
Bain && Company
Company
Source:
Page 14
2010
2013
2014E
Other tourists
Regional tourists
Locally
Local consumers
Americas
Europe
Asia
Japan
American
Page 15
European
Chinese
Japanese
3.
Changes in
distribution
212
223
192
170
CAGR,
20072014E (%)
173
167
153
79
78
73
69
71
72
68
Wholesale
(%)
Retail
(%)
10
75
21
22
25
27
2007
2008
2009
2010
28
29
31
32
2011
2012
2013
2014E
Source: Bain
Bain && Company
Company
Source:
In 2014, retail growth has been driven by both new-store openings and like-for-like sales growth
69%
Retail
Wholesale
+5%
+1%
Perimeter +3%
(~500 new directly operated stores)
Organic +2%
223
68%
32%
31%
2013
2014E
Source:Bain
Bain&&Company
Company
Source:
Page 18
Wholesale
Retail
Market
share
25%
19
5%
11
5%
223
223
12
55
27%
68%
48%
Multibrand
52%
Monobrand
Wholesale
61
29%
65
32%
Monobrand Department
stores
stores
Specialty
stores
Off-price
stores
Airport
Online
Monobrand (%)
100
50
80
15
35
Multibrand (%)
50
100
20
85
65
Global
luxury
Retail
Global
luxury
Source:
Source:Bain
Bain&&Company
Company
10.6
6%
Rest of
the world
17%
Americas
30%
Europe
47%
Asia,
including
Japan
7.8
+11%
CAGR
Market share
10.6
10%
12%
72%
2011
2014E
4%
5%
10%
13%
2014E, by
location
Source: Bain
Bain &
& Company
Company
Source:
Page 19
2014E, by
category
Others
Hard luxury
Apparel and
accessories
Beauty
5%
12.2
4%
9.8
3%
Online
market share
5.8
2%
1%
1.0
2003
Growth (%)
1.3
1.7
2.2
7.7
2.6
2.9
4.6
3.5
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014E
32
37
27
20
12
22
31
24
33
28
24
Source:Bain
Bain&&Company
Company
Source:
Page 20
The online channel is particularly developed in the Americas, and accessories and apparel dominate
Online personal-luxury-goods market, 2014E (billions)
12.2
15
27
58
By
location (%)
12.2
Rest of
the world
Others
11
Hard luxury
16
Beauty
28
Apparel
41
Accessories
12.2
32
Brand sites
33
E-tailers
35
Retailer sites
Europe
Americas
By
category (%)
Source: Bain
Bain &
& Company
Company
Source:
Page 21
By
player (%)
4.
Individual category
performance
Accessories remain the biggest personal-luxury-goods category, and it is the fastest growing
Global personal-luxury-goods market, by category, 20072014E (billions)
CAGR,
CAGR,
20072009 (%) 20092014E (%)
218
212
223
192
170
167
2008
10
Beauty
Hard luxury
11
Apparel
Accessories
12
173
153
2007
Other
2009
2010
2011
2012
2013
2014E
Source:Bain
Bain&&Company
Company
Source:
This pattern held true in 2014, when accessories continued growing faster than other categories
Other
218
4%
223
4%
Beauty
20%
20%
+2
Hard luxury
23%
22%
+1
Apparel
25%
25%
+2
Accessories
29%
29%
+4
2013
2014E
Source:Bain
Bain
Company
Source:
&&
Company
Page 24
+0
Soft accessories have been the top-performing luxury category in both the short and the long term
Global personal-luxury-goods market, by category, 20002014E (billions)
10
Leather
Watches
Historic giants
Shoes
Jewelry
5
Fragrances
Recent winners
Menswear
Global retail
sales value
(30 billion)
Womenswear
Cosmetics
0
5
CAGR, 20112014E (%)
10
As accessible status symbols, shoes benefit from strong tailwinds and have been growing faster than the
overall leather-goods category for the last three years
Luxury shoes, 20112014E (billions)
34
36
37
29
+3%
+6%
+2%
11
12
+13%
2011
2012
2013
2014E
2011
Page 25
2012
13
+7%
2013
14
+5%
2014E
5.
Outlook for the future
After years of relentless growth, slower and more sustainable growth of 4% to 6% should be the
new normal
Market forecast for personal luxury goods (billions)
250265
Key trends
223
218
CAGR,
2014E2017F
(%)
+4%6%
at constant
exchange rates
+2%
(+5% at constant
exchange rates)
2013
2014E
2017F
at constant
exchange rates
Source:
Source:Bain
Bain&&Company
Company
In this mature phase of growth, the industry should be more resilient in the face of economic spikes
Sortie du temple and
democratization
Financial crisis
and recovery
What's next?
CAGR,19952007 (%)
Note:
rates at constant exchange rates
Source:
BainGrowth
& Company
Note: Source:
GrowthBain
rates&atCompany
constant exchange rates
Page 28
Understanding consumers and aligning their business accordingly will become the mantra of luxury brands
over the next decade
All functions should
be focused on the
consumer and
evaluated through
consumer KPIs
Strategic thinking
should be structured
by consumer
segments as a key
business driver
1
Ready-to-consumer
organization
Strategy
definition and
planning
2
Performance
measurement
Consumer
Execution
through
excellence at
the front line
4
Collection
development
and
merchandising
Retail network
development
How will luxury businesses succeed in the next decade? Get prepared for Luxury 2.0
290
100
1995
2014E
2025F
Page 29
The future will be marked by disruptive innovations that should completely change luxury
Yesterday
Today
Tomorrow
1990s
2000s
2014
20XX
Monochannel
Multichannel
Omnichannel
No channel
Monoproduct
Multiproduct
Lifestyle
product offer
Lifestyle
coach
Local
footprint
Multilocal
footprint
Global
footprint
Global
consumer
Baby boomers
Baby boomers,
Gen X
Baby boomers,
Gen X, Gen Y
Gen Y, Gen Z,
space gen
Licensing
partnership
Distribution
partnership
Internalization
(no partnership)
Consumers
as partners
Seasonal
Transseasonal
Buy now,
wear now
Think now,
wear now
Product
Brand
Exclusivity
Individual
irony
Source:
Source: Bain
Bain && Company
Company
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