RAPAPORT... Jewelry and watches are set to become the next “must have” luxury item as global spending on luxury products is expected to grow by 70 percent over the next five years.
According to British research company, Report Buyer, global luxury brand spending will hit GBP 225 billion ($465 billion) by 2012, from its current level of GBP 131billion ($271 billion.)
“As wealth increases across the globe, the demand for luxury products will accelerate with the market, boosted by high demand from emerging economies, wider demand from mature markets and new channels,” Report Buyer reported in a statement.
The study forecasted that watches and jewelry would become the second largest sector after fashion and clothing. Clothing currently has a 44.3 percent share of the market, but is expected to begin losing share as other product sectors increase, the report concluded.
“Brands have been producing new high-end pieces in both jewelry and watches which is stimulating interest,” the company found. “Additionally the high intrinsic value of jewelry and watches, because of the high cost of their components, makes them an attractive luxury investment to a wide range of consumers – not just the fashion conscious or ultra-rich.”
The report showed that growth will be most stimulated by wealthy consumers in fast growing economies, and that the Asia Pacific region, including China and India – but not Japan – will nearly triple in value by 2012 as newly wealthy consumers seek to underline their status with top end goods.
“The (AP) region will account for nearly a quarter of global spending at GBP 57 billion overtaking the Americas as the second largest market,” Report Buyer noted. Including Japan, it added, the region would have a 36.2 percent market share by 2012, just behind Europe’s 36.4 percent as “the most valuable market.”
One factor contributing to the rising demand has been luxury retailer’s use of the Internet, where many brands have introduced transactional websites over recent years, and more will follow, the report explained. “This will enable brands to access consumers beyond their reach via traditional channels, and generate new revenue streams. This channel is also highly suitable for accessories, watches and jewelry, where fit is not an issue,” Report Buyer said.