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GLOBAL LUXURY GOODS: TODAY AND TOMORROW

LUXEPACK MONACO
FFLUR ROBERTS HEAD OF LUXURY GOODS RESEARCH OCTOBER 21ST

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OUTLOOK FOR GLOBAL LUXURY GOODS OUTLOOK FOR PACKAGING LUXURY PACKAGING CASE STUDY SUMMARY AND RECOMMENDATIONS

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INDUSTRY OVERVIEW

WHERE IS THE LUXURY GOODS MARKET HEADING?

Global Luxury Goods: Retail Value, 20o7-2015

250 7 6 200 5 4 150 3 % growth y-o-y

174 billion 207 billion

US$ Value of Global Luxury Goods in 2010

US$ billion

2 100 1 0 50 -1 -2 0 2007 2008 2009 2010 2011 2012 2013 2014 2015
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-3 Luxury Value US$ bn Growth rates y-o-y %

US$ Value of Global Luxury Goods by 2015

INDUSTRY OVERVIEW

KEY COUNTRIES CONTRIBUTING TO GROWTH

Global Luxury Goods Markets: Developed vs Emerging
100%
90%

43%
Emerging market value growth between 2005 - 2010

80%
70%

% Value RSP US$

60%
50%

40% 30%
20%

6%
Developed market value growth between 2005 -2010
2005
Emerging markets

10%
0%

2010
Developed markets

2015

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INDUSTRY OVERVIEW

ASIA PACIFIC LEADS THE GLOBAL RECOVERY

664%
Indias growth rate for Luxury Goods between 2005-2010
Developed

Luxury Goods in 2015: Emerging Markets % Share

Luxury Goods Forecast Growth US$ 2010-2015 (%)

China 37%

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INDUSTRY OVERVIEW

LUXURY GOODS CATEGORIES: 2010-2015 DEVELOPMENT

Luxury Goods 2010: Global Retail Sales, % value

Designer Clothing and Footwear

Fine Wines/Champagne and Spirits Luxury Accessories Luxury Electronic Gadgets

Luxury Fine China and Crystal Ware

Luxury Jewellery and Timepieces Luxury Travel Goods

Luxury Tobacco

Luxury Writing Instruments and Stationery Super Premium Beauty and Personal Care

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INDUSTRY OVERVIEW

CATEGORIES: EMERGING VS DEVELOPED MARKETS

Emerging Markets, 2010-2015
2010

53%
Emerging market value growth 2010 - 2015 Luxury Jewellery and Timepieces

2015

Designer Clothing and Footwear Luxury Jewellery and Timepieces Fine Wines/Champagne and Spirits Luxury Accessories Super Premium Beauty and Personal Care Luxury Fine China and Crystal Ware Luxury Travel Goods Luxury Tobacco Luxury Writing Instruments and Stationery Luxury Electronic Gadgets

18%
Developed market value growth 2010 -2015 Luxury Jewellery and Timepieces

Developed Markets, 2010-2015

2010

2015
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INDUSTRY OVERVIEW

KEY CONSUMER TRENDS

Outer-directed and extrovert Being noticed is a key element of luxury shopping
Drawn by one-offs and limited editions Exclusivity may be more important than price Raising the price tag adds to the appeal

Blingtastics

Exclusivists

Old Money

Interested in connoisseurship Drawn by timeless luxury Brand heritage and authenticity is key Focus more on time and experiences May be more interested in artisan and local products Drawn towards green luxury /eco-lux Looking for the the new, the different and the constantly changing Technology is often a key category

New Ascetics

Novelty Junkies
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OUTLOOK FOR GLOBAL LUXURY GOODS OUTLOOK FOR PACKAGING LUXURY PACKAGING CASE STUDY SUMMARY AND RECOMMENDATIONS

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KEY TRENDS IN LUXURY PACKAGING

PACKAGING OVERVIEW
Global Retail Packaging Consumption 2010
2000 1800 1600

83bn

10

90%

US$ value of global premium beauty and personal care in 2010

1400
Billion units

1200 1000 800 600

400 200 0

22%
Value of premium beauty and personal care as a % of total beauty and personal care 2010

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KEY TRENDS IN LUXURY PACKAGING

CORE DRIVERS FOR NEW PACKAGING LAUNCHES

Value

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New Technology

Health and Wellbeing

Convenience

Functionality

Sustainability

Differentiation

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Premiumisation

KEY TRENDS IN LUXURY PACKAGING

LUXURY PRODUCTS REQUIRE LUXURY PACKAGING

Core Growth Categories in Luxury Goods 2010-2015
6 2,500

12

2,000
Absolute growth 2010-2015

4 % CAGR 2010-2015 1,500

3 1,000 2 500

Global Sales RSP Fine Wines/Champagne/Spirits US$ billion 2005 US$15bn 2010 US$19bn 2015 US$23bn

Super Premium Super Premium Super Premium Luxury Spirits Fragrances Haircare Skin Care % CAGR 2010-2015
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Absolute value growth 2010-2015

KEY TRENDS IN LUXURY PACKAGING

PACKAGING DIFFERENTIATION
Global Premium Fragrance US$ million 2008-2013
1,400 1,200 30

13

25

1,000 20 US$ billion 800 15 600 10

400

% growth

Global Fragrances by Value: Premium vs Mass 2005 Premium

200 0
2008 China China 2009 2010 India India 2011 2012 Russia Russia

Mass
2010 Premium

0
2013 World

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Mass

KEY TRENDS IN LUXURY PACKAGING

CONVENIENCE: A BIG PUSH FOR PUMP CLOSURES

Global Pump Closure Volume Sales 2005-2011
1.6 1.4
Unit Volume sales - bn units

14

16 14 12 10 8 6 4
2

1.2 1.0 0.8 0.6 0.4

0.2 0.0

y-o-y Growth

Female Annual Disposable Income: Five Year Growth Top 5 Growth Countries Venezuela 2005-10% growth US$ 273
152 148

2005

2006

2007

2008

2009

2010

2011

Ukraine Azerbaijan

Anti-agers Packaging Unit Volume

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Lotion Pumps - Beauty Care

Belarus Argentina

145 142

KEY TRENDS IN LUXURY PACKAGING

INTERNET CONTINUES TO RESHAPE THE WORLD

711mn
Chinese Internet users in 2020 US Internet users in 2020

15

Net-A-Porter Annual Sales, 2005-2010

140

Sales ( million) 120

100

120.0

281mn
More than 40% of the worlds population will be on the Internet in 2020
45 40 35 30 25 20 15 10 5 0 2000 2010 2020 % of world population

Value million

81.5 80 60
40

55.2 36.5 21.3

11.8

20
0

2005

2006

2007

2008

2009

2010

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KEY TRENDS IN LUXURY PACKAGING

PACKAGING AS A ROUTE TO SOCIAL NETWORKING

Smartphones: Global Sales RSP US$ billion 20o5-201o
90 80
Retail Sales RSP US$ billion

90 80 70
60

21%

16

of the worlds population in 2010 is generation Z

70
60

40 30
20 10

40 30
20 10

2005 2006 2007 2008 2009 2010

value sales US$ billion

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% growth 2005/2010

% growth

50

50

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OUTLOOK FOR GLOBAL LUXURY GOODS OUTLOOK FOR PACKAGING LUXURY PACKAGING CASE STUDY SUMMARY AND RECOMMENDATIONS

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LUXURY PACKAGING CASE STUDY

CASE STUDY: PATRON

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Tequila Value Sales: Luxury vs Mass

14,000 12,000 10,000
US$ million

8,000
6,000

4,000 2,000 0
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2005

2010

2015

Luxury Tequila

Mass Tequila

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OUTLOOK FOR GLOBAL LUXURY GOODS OUTLOOK FOR PACKAGING LUXURY PACKAGING CASE STUDY SUMMARY AND RECOMMENDATIONS

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RECOMMENDATIONS FOR LUXURY PACKAGING PLAYERS

SUMMARY AND RECOMMENDATIONS

Strong growth in emerging markets Bulk of sales in developed markets Largest luxury goods value sales in US

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Global Luxury Goods

Slowest regional growth from Western Europe Global recovery lead by Asia-Pacific Designer clothing and footwear remains the biggest category to 2015

Convenience: consumers will increasingly be on-the-go

Key Packaging Trends

Differentiation: no one-size-fits-all approach in luxury New Technology: as technology changes the retailing environment companies must to fully leverage consumers online space

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THANK YOU FOR LISTENING

Fflur Roberts| Head of Luxury Goods Research Fflur.roberts@euromonitor.com Euromonitor International
60-61 Britton Street London EC1M 5UX

Telephone: +44 (0) 207 251 8024

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