The global personal luxury goods market shrank by around one percent in 2016, marking the first year of negative growth for the industry since 2009, according to research released Monday by consultancy Bain & Company.

Yet the industry has recovered to notch up growth of around 4 percent in the first quarter of 2017, helped by weak comparisons from the year earlier period which had been strongly knocked by terrorism, according to the research. The consultants anticipate steady momentum for 2017 but a slowdown in its pace, with Bain & Company citing a year end forecast of 2 – 4 percent growth.

Authors of the research described the final quarter of 2016 as “encouraging”, citing first and foremost the reawakened appetite of mainland Chinese consumers for luxury purchases made both at home and abroad. This contrasts with the picture in Hong Kong and Macau where the trend of big losses in recent years may have slowed but has not yet reversed.

China continues to act as the linchpin in the global luxury market with Federica Levato, partner at Bain & Company, saying there isn’t another region or country in the near-term which will be able to assume the same role that the so-called Middle Kingdom has been playing.

“The relevance of Chinese consumers, locally as well as abroad, will still be high in the market and will continue to deeply shape the industry in the coming years,” asserted Levato, adding that the market has not yet been rocked by the continued tightening of credit by Chinese policymakers.

“The Mainland China market is on a positive trend and we expect it to be maintained throughout this year, fuelled, among other factors, by the repatriation of local consumption,” she predicted.

The European market also saw a recovery during the fourth quarter with the research describing demand as “buoyant” as the impact from a spate of terrorist attacks faded, prompting a revival of both local and tourist spending in key cities, such as Paris.

A resurgent U.S. dollar also stimulated the purchasing power and propensity to spend of North Americans and those hailing from countries with currencies tied to it.

A key theme for 2017 will continue to be the growing importance of millennials as a consumer base for luxury vendors, says Bain & Company. However, the researchers shy away from the popular idea that millennials should be classified by their year of birth (approximately between 1981 – 2000) and say that it is instead a common mindset that should define the cohort.

“We prefer to talk about the ‘Millennial State of Mind’, meaning that millennials are influencing how all other generations are approaching consumption and attitude towards fashion and luxury,” explained Levato in an email to CNBC on Monday.

For a group which favors expenditure on experiences over products, connecting with customers becomes even more crucially important for purveyors of luxury goods.

“The recipe to truly unlock the potential is to cater to customer needs through a 360° engagement plan, re-designing a customer-centric strategy which will manage the relationship through all touch points, enhancing the role of the ‘experience’ when buying a luxury product,” said Levato.

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