Analyst Insight by Rob Walker - Contributing Analyst
Total retail sales of luxury jewellery and timepieces - in the 32 markets tracked by Euromonitor – increased 6% last year, at fixed US dollar prices. It was a resilient performance given firstly, the crackdown on gift giving in China – the category’s primary growth engine of the last decade – and, secondly, the economic headwinds buffeting much of Western Europe.
It was still the category’s weakest global performance in four years, however, and a warning that manufacturers and retailers needs to unlock new markets – especially if they are to capitalise on the current period of lower raw material costs.
Untapped markets to watch
Indonesia looks promising. Annual sales of luxury jewellery and timepieces sum under US$100 million, but there is evidence of a growing appetite for prestige necklaces, earrings and bracelets as well as men’s high-end watches. Leading brands Cartier and Rolex have cottoned on, with both building stronger distribution positions last year. It could be the start of a much bigger wave of investment this year.
One of the barriers, however, is legislation that requires foreign brands to sign up with a local business partner. This has held back global brands in the past. The difference now is that the opportunity is looking too good to miss.