Despite France’s venerable position on the global luxury and fashion scene, the French luxury market has not escaped the country’s poor macroeconomic environment.
According to Euromonitor International’s latest research, luxury sales in France reached just under €18 billion in 2014, making it the third biggest market in the world, behind the US and Japan, but, with a regional value share of 21%, France comes out top, ahead of neighbouring Italy and the UK.
Much in line with comparable global figures, designer clothing and footwear accounts for the lion’s share of luxury value sales in France, at 46% in 2014. However, its growth is dwarfed by that of the second largest category, luxury accessories, which grew by 43% in value in the five years to 2014, making it the most dynamic category overall.
Economic Stagnation Creates Headwinds for the Luxury Market
Economic stagnation in France is acting as a drag on luxury industry growth, with domestic demand remaining weak. Against this challenging backdrop, price polarisation has become salient. While high tourist inflows have kept the luxury market afloat, domestic consumers are driving growth at the more accessible end of the market, with affordable luxury brands gaining ground.
Older age dominate domestic luxury spending
Home to an established consumer market that is synonymous with luxury spending, France has an extensive high-income population. However, luxury brands need to be mindful of the fact that, of France’s total population in receipt of an annual gross income of US$150,000+, the over 65-year-old cohort accounted for a 21% share in 2013, with the 50-54-year-old and 55-59-year-old age bands accounting for 17% and 18%, respectively
Tourist inflows also heavily support luxury sales
France’s rich fashion heritage and the “Made in France” label has enabled it to maintain its position as a prime tourist magnet. The influx of tourists has become a boon for the French luxury market. It is no surprise that Paris, as one of the leading tourist destinations in the world, is where tourists are drawn to: In 2013, the city received 33 million tourists, including 18.6 million international tourists.
France is by far the most popular European destination for Chinese tourists, with departures to France from China totalling 433,000 in 2013. Additionally, expenditure by Chinese tourists in France is set to reach US$1.0 billion by 2018, up from US$838 million in 2013.
French Appetite for Luxury is on a Crescendo
France’s appetite for luxury will continue to rise, buoyed mainly by wealthy tourism inflows. According to our latest research, we expect luxury sales in France to reach €19.0 billion by 2019, adding an additional real €1.2 billion to the market in the next five years.
This article outlines the presentation Fflur will deliver at the next Luxury Society Keynote conference, Thursday 6th November 2014 in Paris, France. Find out more about the conference and the programme on their website: http://lskeynoteparis.evolero.com/