Tourism drives GCC luxury personal goods market
The GCC personal luxury goods market is stable with recovery from last year driven by tourism spend and online spend which now represents almost 5 per cent of the regional luxury market, i.e., about $400 million, an industry expert said.
Cyrille Fabre, partner and leader of Retail at Bain & Company Middle East, a leading advisor to the global luxury goods industry, was commenting the company’s new report titled “Bain & Company Luxury Study 2018 Spring Update” released today (June 20) in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.
A positive trend across all regions is set to drive this market higher by 6-8 per cent this year to reach €276-281 billion ($320-326 billion), according to the report.
“China” and “millennial state of mind” remain the buzzwords in an industry that could reach €390 billion globally in sales by 2025, the report said.
“2018 is off to a strong start,” said Claudia D’Arpizio, a Bain & Company partner and lead author of the study. “Currency fluctuations will have an impact, but we expect the healthy trend to continue across all regions and customer segments. Chinese consumers continue to stand out as a growth-driver for the industry, and are more fashion-savvy and digitally advanced than ever before, accelerating the shift of the industry to the millennial state of mind.”
Growth expected to pick up and drive industry to new heights
Looking ahead to 2025, Bain & Company expects growth to pick up to 4-5 per cent per year (at constant exchange rates) increasing the market size to €366-390 billion.
“Luxury brands should view themselves as the masters of their own destiny,” said Bain & Company partner and report co-author Federica Levato. “Customers are responding to targeted strategies, and top performing brands are already winning over the customers of tomorrow.”