Jewellery is one of three categories in the luxury sector whose growth is expected to be solid in 2019 due to rising domestic consumption in China and the United States, according to Bain & Company.
Leather articles and bags will also benefit from sustainable growth throughout the year, while watches will begin to recover in some regions, including Europe. However, Hong Kong, the largest consumer market for luxury watches, will maintain a slow pace.
Overall, the market for personal luxury goods such as jewellery, will grow by 4% to 6%, from EUR 271 billion (USD 303.48 billion) to EUR 276 billion (USD 309.08 billion), Bain estimated in its report on global luxury goods, published during the week of June 10. Mainland China will remain the main growth driver in the luxury market. Its sales are expected to increase by between 18% and 20%. Chinese consumers will represent more than 45% of the market and half of their luxury spending will be made in the country, Bain noted.
“China continues to dominate the luxury segment,” said Claudia D’Arpizio, partner at Bain. “Everywhere else, we can see that geopolitical uncertainties are shaping and redesigning tourist spending patterns. Chinese consumers prefer to spend more frequently in their own country.”
The increase in domestic spending by Chinese consumers will affect Hong Kong and Macao, which generally see a rise in sales in the luxury sector by Chinese tourists. Even so, sales in the rest of Asia will increase by 10% to 12%, according to Bain.
Purchases in the United States will increase between 2% and 4%, a rebound from the gloomy 2018 figures due to economic uncertainties related to the trade war, the report said. The increase in the number of tourists from Mexico and Brazil will compensate for the loss of Chinese visitor spending.
“There will be a promising increase in national consumption from shops charging full prices, despite a declining arrival of Chinese tourists,” explained Claudia D’Arpizio.
Young buyers will play a major role in the growth of the luxury industry, Bain said. Generations Y and Z will make a significant contribution to future market growth. Generation Z buyers in China are the “segment to watch out for” in this category. They have a proud and autonomous attitude, a strong purchasing power and a penchant for impulse buying, according to Bain.
“We expect stable growth in 2019,” added Claudia D’Arpizio. “Overall, growth is expected to be moderate in most markets.“