Jewelry Set for Strong Growth in 2019, Bain Says

RAPAPORT... Jewelry is one of three categories in the luxury sectorexpected to see solid growth in 2019, as domestic consumption in China and theUS increases, according to Bain & Company. Leather goods and handbags will also see sustained growththroughout the year, while watches will begin to show recovery in specificregions, including Europe. However, Hong Kong, the largest consumer market forluxury timepieces, will remain slow. Overall, the personal luxury-goods market will grow between4% and 6% to EUR 271 billion ($303.48 billion) to EUR 276 billion ($309.08billion), Bain estimated in its global luxury-goods report, published last week.Mainland China will be the main driver of growth in the luxury market, with salesexpected to rise 18% to 20%. Chinese consumers will comprise more than 45% ofthe market, and half of their luxury spending will take place locally, Bainnoted. "China continues to dominate the luxury scene," said ClaudiaD'Arpizio, a partner at Bain. "Elsewhere we are continuing to see geopoliticaluncertainty shape and reshape tourism spending patterns, with Chinese consumerschoosing to spend domestically with more frequency." The increase in domestic spending by Chinese consumers willaffect Hong Kong and Macau, which usually see increased sales in the luxurysector from Chinese tourists. Even so, sales in the rest of Asia will rise 10%to 12%, Bain predicts. Purchasing in the US will rise 2% to 4%, rebounding fromslow sales in 2018 due to economic uncertainty brought about by trade-war concerns,the report noted. Increased tourism from Mexico and Brazil will offset the lossof consumer spending by Chinese visitors. "[There will be] a promising rise in domestic consumption offull-price stores despite a declining flow of Chinese tourists," D'Arpizioexplained. Younger shoppers will play a major role in the rise of theluxury industry, Bain stressed, with Generations Y and Z contributing a significant portion ofthe future market growth. Chinese Gen Z shoppers are the "segment to watch" inthat category, with a proud and empowered attitude, significant spending power,and a penchant for impulse purchases, according to Bain. "We expect stable growth in 2019," D'Arpizio added. "Overallwe are seeing moderate growth in most markets." Image: Luxury jewelry at the International Gem & Jewelry Show. (Flickr)