Luxury insightSmall research of overall market

Romanian market review

New business opportunities

What LUXURY is?

• DESIGN

• QUALITY

• CRAFTMANSHIP

• SERVICE

“To build reputation it takes decades”

Luxury Market Summary• Most important brand owners and distributor in

the luxury market:

– LVHM (double digit growth in 2012) (Louis Vuitton, Moet, Hennessey)

– PPR (double digit growth in 2012) (Gucci, YSL)

– Richemont (double digit growth in 2012) (Dunhill, Cartier, Chloe)

– Hermes (double digit growth in 2012)

• Fast growing emergent markets (ASIA – China)

• UBS report in 2010 says:

– 50% of world luxury revenue comes from Asia

– 50% of Europe luxury revenue are Asian tourists

Luxury Market Summary• China is the 2nd largest consuming group of luxury

goods after USA while Europe is struggling with an organic growth of 1 digit last year

• Biggest growth by gender is made by men’s luxur. Top 5 Brands of men luxury: E. Zegna, Hugo Boss, Dunhill, Armani, Burberry

• Many luxury companies are going online

– Armani.com – delivers in 27 European countries

– Escada to open e-shop in 2013

– PPR opened Stella McCarthy E-store last year

– Ittiere opened E-commerce business line for 35 countries

– Zalando open Emeza, luxury discounted E-store

Local Luxury Market• Local luxury market are divided by:

– Products

• Watches & Jewelry

• Fashion

• Cosmetics and Fragrances

– Investments

• Real Estates

• Art

– Way of life

• Cars, Airplanes, Tourism

• Home decorations, Alcohol, Cigars

Local Luxury Market

• Most of the luxury brands are present in the market

• Hermes, Chanel and Prada are not yet locally based

• Local luxury market decreased in the area of luxury cars, watches and accessories over the crisis period

• Fashion, accessories and cosmetics reported 20% decrease in 2008 at the beginning of crisis

• Meanwhile brands like Max Mara, La Perla, Pal Zileri, Canali reported constant growth of 20-30% in 2008

• In 2009 7 branded fashion stores were closed

• In 2009, 9000 people were clients of luxury products, while in 2008 were 11,000 (CPP Management)

Local Luxury Market

• 2010 luxury market of fashion and accessories goods was nearly 50 million Euro (including counterfeit products)

• Louis Vuitton Romania reports 4.5 million Euro sales in 2010

• Arts sales decrease to 8 million Euro after 2008 of 31 million Euro sales. For 2013 it is said to be up to 25-30 million Euro.

• 2011 reports a general growth of luxury products up to 500 million Euro

• 50-60% of total sales represent cars luxury industry

• 30% of the market is represented by fashion luxury

Local Luxury Market

• First half of 2012 reported a decrease of 30% of sold luxury goods comparing 2011 same period

• Gucci, Moschino, Dunhill, Valentino, Emporio Armeni, Hugo Boss, Burberry decrease in sales based of cost cut optimization of global strategy

• Luxury cars industry grew with 39% in the first half of 2012.

• Real estate industry double the revenue comparing same period of last year

• Roberto Cavalli, Porsche Design and Montegrappa opens first monobrand store in Bucharest

• Frey Wille reported more then 1 million Euro revenue for a newly brands in the market

Romanian customer profile of luxury goods

• Billionaire or Millionaire

– Having more then 40 million Euro wealth

– Buying most exclusivist brands like: Hermes, L. Vuitton, Moet & Chandon, Rolex, Gucci, Prada

• Top Managers and business owners

– Aspirants of luxury lifestyle

– Expensive cars and watches

– Expensive travelers

– Luxury consuming goods

• Woman are more attracted by fashion while man by cars

Romanian customer profile of luxury goods

• Online luxury customers are seeking:

– Fashion & shoes – 60%

– Cosmetics & fragrances – 46%

– Food & Alcohol – 26%

• 31% of urban inhabitants will buy a luxury product next year

– 47% of them are 32-47 y.o.

• Active professionals and married

• Daily usage of internet with high education

• Analytical and pragmatic

Romanian customer profile of luxury goods

• 37% of them are between 18 to 31 years old

– Technological addicted

– Self focused and self inventive

– Appreciate variety

– Unmarried with middle – high education

• 16% of them are between 48 to 64 years old and married

Local luxury reports

Local luxury reports

Conclusions & Opportunities

• Luxury market in Romania after a period of decrease started to gain more value. Specialists reported growth for 2013 in most of the luxury segments

• New fashion brands established monobrand store and other are to come in 2013 and 2014 as luxury fashion will increase this year

• Cars luxury is to growth in exclusivist segment and to stabilize on the other with perspective to grow

• Online luxury is the new trend in business

• Romanian luxury customers will be more interested in high services in order to gain loyalty

• 2013 to pass half a billion Euro market value in Romania

Business Concept

Online Luxury Store that will sell fashion, jewelry, consuming goods, IT & Gadgets luxury brands

Competition• For the online segment there are couple of

websites which sells luxury goods but there is not a dominant player

Risks

• Even the luxury market stabilized a little and in some areas a growth took place there are a few risks due to the instable economical situation

– The Romanian millionaires power of purchase decreased with 30% over the last year

– Big counterfeit market and no clear strategy to avoid the phenomenon over the local authorities

– Many international brands opened online stores with delivery to Romanian market

Thank you!

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