According to a recent study published by Bain & Co, the luxury market should stagnate in the course of the year 2014. This sector has begun to mature which has limited its progress, but that will also help it conquer future obstacles.
The luxury sector’s stabilising growth
The research department Bain & Co recently announced a decline of the luxury sector’s growth. The company explained that the current luxury market moves at the same rhythm as in 2013, with a constant growth rate of 6%.
Whilst the global sales of luxury products had advanced last year by 6.5%, they should only increase by 4 to 6% in 2014.
Claudia d’Arpizio, Bain & Co’s partner, does not find these results alarming. On the contrary she stated,”With luxury goods, we are seeing the emergence of a new normal: The global market is maturing, stabilizing and consolidating […] There are unlikely to be more booms like the recent one in China soon, and mature markets can cope better with economic crisis, so growth should be more stable.”
A declining growth?
The slowing of the luxury market’s growth is a result of currency devaluations in certain countries (Russia, Japan…) and political unrest, which have a global impact on sales. In other words, sales are expected to be lower this year.
However, in the USA, it is expected that sales would increase due to an increase in consumer trust. Japan on the other hand, will be the principal source of growth of the luxury market, with an increase of 9 to 11% in sales, estimated at 19 to 20 billion euros.
At the same time, the Chinese market growth will only know a 2% increase, as opposed to the 20% rate in 2012. This reduction can be explained by the governments desire to turn to local luxury goods.
In a second study, Altagamma announced that the best performances of the luxury sector for 2014 should take place during the second semester.