Billion-Dollar Dance: Luxury Market Insights and the LV Seven-Figure Bag
Digest #12 Luxury threads of tomorrow, Diamond prices plunge, unveiling Roblox world and a Balenciaga's $925 Towel Skirt sparks humor.
Fashion
The global luxury market is on track to hit €1.5 trillion by the end of 2023, with the Personal Luxury Goods market expected to grow by 8% over 2022.
However, a slowdown is projected for 2024, with growth anticipated to be between 1% and 4%, as reported by Bain & Co and Altagamma.
The report highlights growth across all luxury categories, driven by increased pricing, even as it impacts volumes.
Jewelry continues to shine. Expected to reach a market value of €30 billion in 2023 and becoming a key investment area during uncertain times.
The luxury industry is increasingly focusing on the fine jewellery, with major houses like Kering's Boucheron acquiring Parisian atelier to enhance craftsmanship and sustainability in their supply chains.
China will dominate the Personal Luxury Goods Market in 2030 accounting for America and EU will together account for nearly 40%.
American luxury market has underperformed against expectations of major luxury groups, and there's been a notable decline in Chinese consumer confidence, with high-net-worth individuals showing less interest in luxury goods.
Latest sign of Luxury Slowdown?
Richemont sales rose 6% to €10.22 billion in H1 2023, with net profit at €1.51 billion. Jewelry Maisons including Cartier and Van Cleef & Arpels, with sales up 10%, offsetting declines in watchmaking (-3%) and fashion (-1%).
Significant growth was seen in the Asia Pacific (+14%) and Middle East/Africa (+5%), while the Americas saw a 4% decrease.
The diamond market is facing a downturn.
Reflected in price trends: A 20% drop in polished diamonds and a 35% fall in rough diamonds, driven by economic uncertainty, shifting consumer preferences, the rise of lab-grown diamonds, market oversupply, and reduced demand.
Higlighted in the Digest #10. Sales of Lab-Grown have surged from less than $1 billion in 2016 to nearly $12 billion in 2022, accounting for over 17% of the total diamond market.
De Beers' recent sales plummeted to an unprecedented low of $80 million, a drastic fall from their typical $400-$500 million range. Even offered buyers the option to purchase nothing and the company is now stockpiling unsold diamonds, a strategic response to the tumbling prices and shifting market dynamics.
Alrosa paused sales for two months in response to reduced demand.
Gem Diamonds Q3 revenue fell 45% YoY.
Meanwhile:
Louis Vuitton unveils a one million dollar handbag.
Balenciaga launches a $925 Towel Skirt, sparking humor from Ikea.
Burberry might fall short of its FY24 revenue goals.
Shein aims for a $90 billion IPO valuation and considers acquiring Topshop.
Tory Burch is eyeing an IPO.
Tapestry cuts revenue forecast on soft US demand. Capri merger advance.
Pandora increases its annual forecast following a strong Q3.
Titan Co. in India reports a 19% rise in Q2 sales, reaching $1.03 billion.
Vestiaire Collective cuts H&M, Zara and more in expanded fast fashion ban.
Tom Ford discusses his career and the industry in a candid exit Interview.
Dolce&Gabbana's CEO Alfonso Dolce talks about the brand's future.
Fashion Tech
Roblox continues to lead in the digital landscape with 214 million monthly active users as of Q3 2023.
What do brands need to know? (Referring to Roblox's report)
Integrated Brand Experience: Gen Z values digital fashion that aligns with physical offerings. Brands to offer products with a consistent presence across both digital and physical spaces.
Financial Commitment to Digital Fashion: Gen Z is open to spending on digital fashion, favoring items that are unique and exclusive.
Google is launching advanced generative AI features to transform the way we shop for clothing and search for holiday gifts.
Users can create lifelike images of desired items, such as a sleek black dress or a vintage-style denim jacket. Google then searches its extensive shopping ecosystem to find real products that closely match these visually conceived items.
Meta and Amazon team up on new in-app shopping feature on Facebook & Instagram, this comes after TikTok expanded into E-commerce with TikTok Shop.
TikTok Shop gears up for expansion in the pre-owned luxury market and partners with Real Authentication for pre-owned handbag verification. The introduction of authentication guarantees aligns with initiatives previously undertaken by platforms like eBay.
One last bite:
Hyperphysical luxury retail stores.
How fashion brands can harness High-Tech tactics for boosting growth .
Millions of Luxury products now come with unique Digital Passports.
Web2: How Instagram, X and Snapchat are powering the digital fashion revolution.
Until next time.Thanks for reading.
