Mass-Market Brands Could be a Gateway to Luxury Opportunity in Emerging Markets

With more than one million millionaires, China is a core driver of growth in the global luxury goods market.  Click to tweet! Yet, Western manufacturers often fall short of their full growth potential in China because they struggle to understand the complexities of its consumption culture, and are thwarted by complicated routes to market. Paradoxically, by developing new positions in locally made mass-market brands, luxury goods manufacturers could unlock a solution to both problems. 

When luxury goods meet fast fashion

Eyebrows were raised in luxury goods circles when it was reported last month that L Capital Asia, a private equity fund backed by LVMH Moët Hennessy Louis Vuitton, the world's biggest luxury goods company, had snapped up a 10% stake in a Chinese fast fashion manufacturer called Trendy International Group, paying an estimated US$200 million.

Top 10 Consumer Trends for 2012: Smartphone Universe

Displacing computers worldwide, in 2012, smartphones are reaching out to the lower end of the mass market so expect apps to reflect this.

This piece is the seventh in a weekly series of consumer comments exploring each of the trends Euromonitor International identified in the recent Top 10 Trends for 2012 article.

Worldwide, smartphones are the communications accessory of choice, including in emerging markets where consumers are taking up new, more basic models as this prop moves from being a luxury item to a necessary lifestyle aid. According to Euromonitor International data, annual smartphone sales surged from US$7.9 billion to US$83.3 billion between 2005 and 2010, with China surpassing the USA as the largest national market during 2009. Real global smartphone sales are forecast to reach US$137.4 billion in 2012. For many developed market consumers, PCs and laptops are beginning to take a backseat as most smartphone owners use these convenient devices to surf the internet and watch TV anywhere from parliaments to buses. New aids such as Hive Dock, designed to assist elderly people with visual impairments to use smartphones will expand the population of smartphone users still more. 2012 will see more consumers using their smartphones to make transactions, using mobile, cashless technologies from Near Field Communication to QR codes to personal card readers.

Join Euromonitor and PwC Host Retailing Forum: Winning in China

Date: June 7, 2012
日期：2012年6月7日 

Time: 1:30 - 6 pm
时间：下午1:30-6点

Location: PwC Office, 6/F DBS Bank Towe1318 Lu Jia Zui Ring Road, Pudong
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Top 10 Consumer Trends for 2012:Tech Lifestyles Versus Slow Living and The Best of Both

Some consumers are embracing an 'always-on' lifestyle while others are trying to disengage.

This piece is the eighth in a weekly series of consumer comments exploring each of the trends Euromonitor International identified in the recent Top 10 Consumer Trends for 2012 article.

For the 2012 consumer – from toddlers upwards, technology is part of life with a lot of simultaneous tech consumption (watching TV and using a computer at the same time, for example). Access to the internet has extended to accompany people as they go about their daily lives, at work and on holiday. We're moving into a technology space where mobility is becoming less about devices, and more about the mist of data that we each generate with every interaction on the internet.

Datagraphic - Debt: The Developed, Developing Dichotomy

Debt (external and public) has been cited as a central factor dragging global economic growth down between 2008 and 2012. Following the 2007/2008 global financial crisis a major imbalance in debt levels between developed and developing economies emerged. High debt levels in developed economies have stifled growth as consumer expenditure, investor confidence and employment have declined, while lower levels of debt in developing economies have supported stronger growth.

Debt Levels in Selected Countries



Note: External and public debt figures for India and Brazil are equivalent.

Luxury Goods Diversification Creating Packaging Opportunities Worldwide

After the downturn in 2008, the global luxury goods industry has begun to recover. Whilst Western consumers are taking small steps back into luxury, the BRIC nations are generating new enthusiastic buyers of luxury brands. The global economic recovery also makes for a positive outlook for packaging; as the luxury market becomes increasingly diversified, the boundaries between luxury and mass are becoming increasingly blurred. This poses challenges but is also creating opportunities for packaging companies. 

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Top 10 Consumer Trends for 2012: Reality Culture and Consumers

Scripted reality or celebrities living the dream - consumers are gripped, sharing views and being moved to change their purchasing behaviour.

This piece is the sixth in a weekly series of consumer comments exploring each of the trends Euromonitor International identified in the recent Top 10 Consumer Trends for 2012 article.

'Reality culture' has changed the paradigm of who we see as an opinion leader. Around the world – 'ordinary' people appearing in reality programming are claiming the spotlight of the 'talented' famous and consumer attention as well as lifestyle aspirations. Euromonitor International's Annual Study 2011 found that respondents rank celebrities slightly more highly than political or community leaders in terms of whom they most look up to. Acknowledging their grip on the population, US President Obama recently shared his sentiment on reality TV by saying: “I don't want my daughters watching 'The Kardashians' either.”

China Driving the Global Luxury Goods Industry

By Fflur Roberts, Head of Global Luxury Goods Research at Euromonitor International

Hit by the global economic slowdown, the luxury goods industry went through a period of decline in 2008-2009 but by 2010 the recovery had already begun, with most developed countries recording positive growth. At the same time the luxury goods market has witnessed a new wave of newly middle class consumers from China, India, Russia and Brazil beginning to sample the delights of luxury goods, with China’s hunger for luxury in particular proving to be unstoppable.

Benefitting from a fast-growing middle class and a fast-developing luxury distribution network, sales of luxury goods in China have consistently outperformed the global market and the country will overtake France and the UK by 2015, making China the fourth biggest luxury market in the world. Click to tweet!

Flavours and Textures: How Local Consumer Taste Palates Are Defining Global Soft Drinks

Analyst Insight by Jonas Feliciano, Beverage Analyst at Euromonitor International

As global soft drinks companies compete with local manufacturers for share in developing nations, textures and flavours that cater to domestic consumer tastes take centre stage.

For generations, “a Coke and a smile” (and an unparalleled international distribution arm featuring local bottlers, licensed manufacturers, and a deep retail presence) was enough to capture significant market share in developing nations. The idea was simple. Much like blue jeans and rock and roll, Western beverages represented a lifestyle for which consumers in these markets would pay a premium. As of 2012, however, things have changed—growing consumer sophistication has put the focus squarely on developing products specifically tailored to consumer taste, to develop products with flavours and textures that local consumers find both familiar and satisfying. And, more often than not, these preferences are outside of the carbonate category.

Prada's Growth Model Shows the Way Forward

Analyst Insight by Rob Walker, Senior FMCG Analyst at Euromonitor International

Almost one year on from Prada's Hong Kong IPO debut, the ensuing volatility of its share price and, ultimately, the company's surging profitability, what are the lessons for luxury goods companies with an eye on a stock market listing?

A bumpy ride for Prada's yield hungry investors

Prada, the Italian luxury fashion house famous for making trendsetting handbags and footwear, raised US$2.14 billion from a Hong Kong IPO in June last year. That was around a fifth less capital than the company had planned for. As things transpired, retail investors were put off by the prospect of Italian capital gains and dividend taxes, which they were liable to pay (even though the listing was in Hong Kong).