LONDON — Watches and jewelry will be the top performing luxury category this year, growing at a rate of at least 20 percent, according to new research from Mintel on the international luxury market.
“Despite softening economic growth in China and other emerging markets and the bleak European context, there is little sign of this category slowing, as shown most evidently in key high-end watch buying and collecting markets such as Hong Kong,” Mintel said in the report to be issued Thursday.
“Luxury Goods Retailing, International, 2012 Report,” also says the growth of the fashion and leather goods sectors would soften slightly, but there would be no major slowdown from 2011, when the growth rate was 17.6 percent.
The Asia-Pacific region, meanwhile, is on a growth streak, accounting for 38 percent of the global luxury goods market in 2011, with a growth rate in excess of 20 percent. That compares to Europe, which represented 33 percent, and the Americas, which accounted for 25 percent in 2011. Other regions accounted for the remaining four percent.
Overall, the global luxury goods consumer market — excluding consumables and automobiles — grew by 14 percent in 2011, and “came within a whisker” of 200 billion euros, or $258 billion, of retail sales, Mintel said.
Mintel is forecasting growth of 11 percent for the global luxury consumer goods market in 2012, although it expects that rate to slow over the next two years to nearer to six percent.
Paul French, chief China marketing strategist at Mintel, said the slowdown in luxury — evidenced in some of the latest PPR, LVMH Moët Hennessy Louis Vuitton and Burberry financial statements — was not to be blown out of proportion.
“Everybody should stop worrying about Burberry and start looking at Prada and the Italian brands and how well they are doing, especially in China,” he said.
With regard to the watch and jewelry category, French said that while Hong Kong is a world center for watch collectors, the Mainland Chinese all want “high-end and new. They want bigger, blingier and more expensive.”
With regard to jewelry, French said the Chinese are looking to invest in pieces that will accrue value over the years, which is why they are going for platinum, jade and precious stones. Gold is not as attractive, he added, because of the government’s control over resale prices.
Tiffany, Cartier and many big-name brands are not as valued in China as they may be in other countries, he said, because they don’t have a resale value — unless they are vintage or have a special provenance. Brands such as Rolex and IWC, however, are viewed as an investment.
“In China, people are quite wise to how things are sold and resold,” he said.