HONG KONG — Fast-growing China is poised to account for 44 percent of the global luxury market by the year 2020, according to a new report from CLSA Asia-Pacific Markets.
CLSA, which is a bookrunner on Prada SpA’s planned initial public offering in Hong Kong, forecasts the Chinese luxury market will grow at a rate of 25 percent a year for the next five years, and then at a rate of 22 percent a year afterward. This implies a market size of 74 billion euros, or $101.4 billion, by 2020. Consulting firm Bain & Co.estimates China’s domestic market in 2009 was 68 billion yuan, or $10.32 billion.
Luxury goods companies have been doing well in Asia for some time, but there’s evidence that growth is accelerating, analyst Aaron Fischer said in a briefing in Hong Kong.
The percentage of households with income of more than $10,000 a year — the point at which consumers start buying luxury goods — has increased to 17.9 percent from 3.1 percent in 2000, the research said. CLSA expects this income group to grow at double digits for the next eight years, according to the bank.
CLSA declined to comment directly on Prada’s prospects in China and elsewhere in Asia, but Fischer said Western brands will continue to do well in the region. Preferred luxury brands for watches, clothing and jewelry in China are similar to those elsewhere in the world, but with some key differences, he explained. The luxury market in China is still largely male-dominated, so men’s wear, suitcases, watches and cars are significant segments. Hong Kong and China combined account for 26 percent of Swiss watch exports, he said.
Fischer anticipates more Western luxury brands will list in Hong Kong.
“It makes sense,” he said, noting that after L’Occitane’s listing, the French skin care maker’s sales in Asia increased.
Despite recent strong earnings from companies, the share prices of luxury goods companies have suffered in recent months amid concerns about inflation. “That’s surprising,” Fischer said, explaining that inflation is generally favorable to luxury players as they can raise prices without fear of backlash from consumers and there is no margin pressure since margins are around 60 to 90 percent.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty