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New research from Mintel on the international luxury market reveals that while Asia-Pacific overtook Europe to become the largest regional luxury goods market in 2010, it continued its upward trajectory in 2011, recording growth that overshadowed that seen in the more mature markets of Europe and the Americas.
Indeed, in 2010, Asia-Pacific accounted for 36% of the global luxury consumer goods market, followed by Europe at 35%, Americas at 26% and 4% for other regions (including the Middle East, Africa and India). In 2011, Asia-Pacific grew share further, to account for 38% of the market. Europe's share of the global market dropped to 33% and the Americas to 25%. Meanwhile, other regions grew share from 3.8% in 2010 to 4.4% in 2011. In absolute terms, double-digit revenue growth was seen across all four regions (Europe, the Americas, Asia-Pacific and 'Other'), but Asia-Pacific's growth, in excess of 20%, overshadowed that seen in Europe and the Americas.
Paul French, chief China market strategist at Mintel, said, "In Europe, much of the growth in luxury goods sales in 2011 can be attributed to tourist spend, particularly from Russia and Asia-Pacific, underlining that Chinese luxury-goods consumers encompass two markets: domestic and overseas. Due to high taxes on luxury goods in China and greater global travel opportunities for Chinese citizens, those PRC shoppers desiring luxury goods are increasingly purchasing abroad effectively arbitraging their purchasing internationally. As travel grows, it is now not just the usual overseas luxury purchasing destinations for the Chinese. Hong Kong, Macao and Singapore are all benefiting, but a host of luxury retail destinations including the UK, France, Australia, Japan and now, as visas become more readily available, the USA, are all standing to benefit too."
Overall, the global luxury consumer goods market (excluding consumables and automobiles) grew by 14% in 2011 and came within a whisker of €200 billion at retail selling prices. Demand was particularly strong from emerging markets and especially Asia-Pacific, in particular mainland PRC. In spite of the macroeconomic context, Mintel forecasts market growth of 11% at rsp for 2012, although it expects rates to slow in the following two years to nearer 6%.
In general over the last five years, the perfume and cosmetics category has underperformed the total global luxury goods market. But this is in large part because of the buoyancy of other categories, and the two most recent years have seen a strong improvement in demand for the perfume and cosmetics category. Annual market growth stood at 11.6% in 2011, down a little from the 12.9% seen in 2010. The slight slippage in growth rates in 2011 may be attributed to the strong comparatives of the prior year.