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LVMH, Richemont and Swatch Group continue to lead overall personal accessories, but the dynamics are changing in individual categories. We discuss the state of global competition as seen through the new edition of personal accessories published on 11 August 2014.

Top Three Lose Ground in Bags and Luggage

The respective market shares for LVMH, Kering (formerly PPR) and Coach all declined between 2012 and 2013. This was not only due to the slowing demand for luxury brands across the world, but also the rise of leading competitors such as Michael Kors, Samsonite and Prada Group.

Global value sales for bags and luggage will grow at a CAGR of 4% over 2014-2019, with luggage and business bags spearheading growth. Although handbags will remain by far the biggest category in 2019, the growth potential for luggage and business bags is likely to inspire several marketing efforts targeted at the male population.

Chinese Jewellers Leading the Way

In 2014, jewellery will contribute 61% of global personal accessories sales and will be the fastest-growing category. As a result, any exceptional performers in jewellery often feature in the personal accessories hierarchy as well. Chief among these are Chow Tai Fook and Shanghai Lao Feng Xiang, which, as of 2013, were the number one and two players in global jewellery sales, respectively. Although the jewellery landscape has traditionally been dominated by real jewellery, costume jewellery is expected to grow at a rate almost on a par with real jewellery over 2014-2019. This is likely to result in several local and international luxury brands in real jewellery experimenting with the costume segment.

Hope for Mid-Priced Watches

2013 was a good year for a few mid-priced watch brands, as Tissot and Fossil registered share increments greater than those for leading luxury brands. However, the trend is reversed when considering a longer time frame. Global leaders Rolex, Omega and Cartier were among the fastest-growing brands over 2009-2013.

Despite all the hype surrounding wearable electronics, smart watches are not likely to cannibalise watch purchases significantly over 2014-2019. The new products are expected to compete most directly with quartz digital watches, which is already the smallest and slowest-growing watches category in 2014.

Cross-Category Involvement to Increase

As seen in 2013 and 2014, accessories manufacturers are willing to invest in brands outside their traditional categories of strength. In keeping with the trend, Kering bought jewellery brand Pomellato (2013) and watch brand Ulysse Nardin (2014), while Swatch Group acquired jewellery brand Harry Winston (2013). Other leading players such as Richemont and Fossil Group are expected to follow suit in the near future as they look to consolidate their presence in bags and jewellery.

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