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MILAN — The global luxury market is expected to grow at a mild pace until 2020, showing a compound annual growth rate between 2 and 3 percent, reaching revenues of 280 billion euros to 295 billion euros, or $314 billion to $331 billion at current exchange rates. Business will be driven by the continuous growth of Chinese shoppers and a recovery of mature-market consumers. The Chinese are expected to represent 34 percent of luxury consumers in 2020 led by more than 40 million new consumer mainly in the middle class.

The data was presented Tuesday in Milan as part of the Worldwide Luxury Market Monitor 2016 spring update by Bain & Co. and Fondazione Altagamma.

Other leading factors for growth include the generations Y and X part of the expected new 50 million consumers will become even more relevant; a healthier markdown market will reduce sales cannibalization; the online channel will remain the “champion” format with a double-digit growth, and market segmentation will be more blurred, also through the online channel.

“The forecasts for 2016 are less positive compared with six months ago, but there is no decrease,” said Armando Branchini, vice president of the luxury goods association. “Japan and Europe are growing, Asia and America are stable, while best performing categories are leather accessories and beauty.”

The global luxury market is expected to grow up to 2 percent at constant-exchange rates in 2016, replicating the performance of 2015, which closed at 253 billion euros, or $280.8 at average exchange rates, up 13 percent at current exchange rates but up 1 percent on a constant basis. Japan is the region predicted to grow the most, between 5 percent and 7 percent, followed by mainland China at a 2 to 4 percent clip. Asia, excluding mainland China, should close the year between down 1 percent to up 1 percent. Europe is seen growing between 1 and 3 percent, while the Americas are expected to register sales that range from flat to down 2 percent. The rest of the world is forecast to be between flat and 2 percent growth.

Branchini also presented the Altagamma 2016 Consensus, noting that the second half of 2016 is expected to improve. Apparel is seen growing 1 percent, while art de la table will be flat as well as jewelry, watches, pens and lighters. Leather shoes and accessories are forecast to grow 4 percent. Beauty is the most mature segment, said Branchini, but is seen advancing 4 percent. The forecasts are reduced compared with the October estimates, he underscored, when apparel, for example, was seen rising 3 percent.

“It’s true that year-on-year growth is increasingly more moderate,” said Branchini, urging to compare the high-end market with “all other industrial sectors rather than with its own performance of the past. In fact, it is evident that the luxury sector performs better than almost all other industrial sectors.”

A day after the surprising news that Gian Giacomo Ferraris, Versace’s longtime chief executive officer, will be succeeded by Jonathan Akeroyd in June, Branchini observed how the economic scenario is putting pressure on luxury companies, to “create new teams to try and look for new growth opportunities. It’s never happened before in this industry, where winning teams would not be changed,” referring to Ferraris’ successful track record in developing the Italian brand. “When growth rates stood at around 8 or 10 percent, some companies settled for being a little above that, but now with the economy’s growth rate so low, it’s imperative to be above it. When we said 2014 ushered a new normal, we didn’t think it would create the basis for such abnormal [parameters].”

Claudia D’Arpizio, partner at Bain & Co., said the market is “passing through a phase of consolidation. All eyes are focused on China again, key in leading a global upswing trend, and on business improvement in the U.S., where now local spending does not balance a slowdown in tourism.”

D’Arpizio said the last quarter of 2015 was particularly difficult in Europe, hurt by the terrorist attacks in Paris, and in the U.S., where the strong dollar impacted tourism and where local consumers have slowed down their purchases. Also, heavy discounting eroded department stores’ margins, and the uncertainty of the electoral year is an additional negative element. Mainland China improved in the last weeks of the year, but Hong Kong and Macau confirmed high double-digit contraction. Southeast Asia improved throughout the year, and Japan confirmed a very positive performance. The Middle East was impacted by sociopolitical tensions and was marked by instability.

In the first quarter of 2016, the market was in line with 2015 with a 1 percent growth at both current and constant exchange, showing a slowdown of tourists due to a partial rebalancing of the price differentials as well as the terrorist attacks in Europe.

Mainland China and Europe are expected to grow thanks to more local spending. Japan, despite a slowdown compared with 2015, remains the market that is growing the most thanks to Chinese tourist flows. South Korea and Southeast Asia are showing a positive performance while Hong Kong and Macau are far from inverting the decline.

D’Arpizio said the market in the future will be defined by the strategic decisions set by the companies. “Customer strategy, branding, omnichannel and pricing remain priorities for ceo’s, and the key is to implement value proposition locally. They should enhance personalized customer experience in-store, master brand content and story telling, and refocus distribution strategy and footprint in a real omnichannel way,” she explained.

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