Luxury Goods in South Africa

Luxury Goods in South Africa

EXECUTIVE SUMMARY

COVID-19 impact on luxury goods

COVID-19 country impact

Company response

Retailing shift

What next for luxury goods?

MARKET INDICATORS

Table 1 Number of High Net Worth Individuals (HNWI): 2015-2020

MARKET DATA

Table 2 Sales of Luxury Goods by Category: Value 2015-2020
Table 3 Sales of Luxury Goods by Category: % Value Growth 2015-2020
Table 4 Inbound Receipts for Luxury Goods by Country of Origin: Value 2015-2020
Table 5 NBO Company Shares of Luxury Goods: % Value 2015-2019
Table 6 LBN Brand Shares of Luxury Goods: % Value 2016-2019
Table 7 Distribution of Luxury Goods by Format and Category: % Value 2020
Table 8 Forecast Sales of Luxury Goods by Category: Value 2020-2025
Table 9 Forecast Sales of Luxury Goods by Category: % Value Growth 2020-2025

DISCLAIMER

GLOBAL MACROECONOMIC ENVIRONMENT

GLOBAL INDUSTRY ENVIRONMENT

SOURCES

Summary 1 Research Sources

Experiential Luxury in South Africa

KEY DATA FINDINGS

2020 IMPACT

Travel restrictions on international and interprovincial travel limit tourist activities

High-end restaurants struggle due to the ban on alcohol sales

Luxury accommodation forced to temporarily close due to a lack of customers

RECOVERY AND OPPORTUNITIES

Travel and tourism set to be affected until the virus is controlled

Permanent closures unless target market can shift to catering to the local market

Expanding the consumer base could help luxury players to survive

CATEGORY DATA

Table 10 Sales of Experiential Luxury by Category: Value 2015-2020
Table 11 Sales of Experiential Luxury by Category: % Value Growth 2015-2020
Table 12 NBO Company Shares of Experiential Luxury: % Value 2015-2019
Table 13 LBN Brand Shares of Experiential Luxury: % Value 2016-2019
Table 14 Forecast Sales of Experiential Luxury by Category: Value 2020-2025
Table 15 Forecast Sales of Experiential Luxury by Category: % Value Growth 2020-2025

Luxury Hotels in South Africa

KEY DATA FINDINGS

2020 IMPACT

International and interprovincial travel restrictions lead to decline

Hotel vacancies rise despite use for COVID-19 isolation

Staff layoffs and pay cuts are the new reality as hotels struggle to make ends meet

RECOVERY AND OPPORTUNITIES

Innovative and local solutions needed to prevent permanent hotel closures

Reassessment of travel culture could drive growth in luxury hotels

Hotel packages catering to middle-income local audiences could help with survival

CATEGORY DATA

Table 16 Sales in Luxury Hotels: Value 2015-2020
Table 17 Sales in Luxury Hotels: % Value Growth 2015-2020
Table 18 Sales in Luxury Hotels by Country of Origin: % Value 2015-2020
Table 19 NBO Company Shares in Luxury Hotels: % Value 2015-2019
Table 20 LBN Brand Shares in Luxury Hotels: % Value 2016-2019
Table 21 Forecast Sales in Luxury Hotels: Value 2020-2025
Table 22 Forecast Sales in Luxury Hotels: % Value Growth 2020-2025

Fine Wines/Champagne and Spirits in South Africa

KEY DATA FINDINGS

2020 IMPACT

Ban on distribution and sale of alcohol negatively impacts sales and investment

Import and export trade impacted by continued local alcohol trade ban

Culture of fine wines/champagne and spirits grows despite COVID-19

RECOVERY AND OPPORTUNITIES

Volume sales to see a slow return to growth due to threat from counterfeit sales

Potential new laws may impact fine wines/champagne and spirits

Decline in investments could continue over the forecast period

CATEGORY DATA

Table 23 Sales of Fine Wines/Champagne and Spirits by Category: Value 2015-2020
Table 24 Sales of Fine Wines/Champagne and Spirits by Category: % Value Growth 2015-2020
Table 25 NBO Company Shares of Fine Wines/Champagne and Spirits: % Value 2015-2019
Table 26 LBN Brand Shares of Fine Wines/Champagne and Spirits: % Value 2016-2019
Table 27 Distribution of Fine Wines/Champagne and Spirits by Format: % Value 2015-2020
Table 28 Forecast Sales of Fine Wines/Champagne and Spirits by Category: Value 2020-2025
Table 29 Forecast Sales of Fine Wines/Champagne and Spirits by Category: % Value Growth 2020-2025

Premium and Luxury Cars in South Africa

KEY DATA FINDINGS

2020 IMPACT

Deepening of recession hampers consumer spending

Local vehicle production halted during second quarter at the pandemic’s peak

Mercedes Benz and BMW remain leading luxury car brands

RECOVERY AND OPPORTUNITIES

COVID-19 affects the path to luxury car purchases, but this may not endure

Record-low interest rates will allow for increased price discounts

Underperformance and lacklustre demand forecast to continue

CATEGORY DATA

Table 30 Sales of Premium and Luxury Cars: Value 2015-2020
Table 31 Sales of Premium and Luxury Cars: % Value Growth 2015-2020
Table 32 NBO Company Shares of Premium and Luxury Cars: % Value 2015-2019
Table 33 LBN Brand Shares of Premium and Luxury Cars: % Value 2016-2019
Table 34 Forecast Sales of Premium and Luxury Cars: Value 2020-2025
Table 35 Forecast Sales of Premium and Luxury Cars: % Value Growth 2020-2025

Personal Luxury in South Africa

KEY DATA FINDINGS

2020 IMPACT

Personal luxury stores close during COVID-19 lockdown, hitting sales

Economic impact of COVID-19 and loss of aspirational consumers also affect sales

Brands have to adapt to the COVID-19 lockdown regulations

RECOVERY AND OPPORTUNITIES

Economic problems will hamper recovery

Fewer business and social interactions will affect sales

Contactless shopping innovations expected for personal luxury shoppers

CATEGORY DATA

Table 36 Sales of Personal Luxury by Category: Value 2015-2020
Table 37 Sales of Personal Luxury by Category: % Value Growth 2015-2020
Table 38 NBO Company Shares of Personal Luxury: % Value 2015-2019
Table 39 LBN Brand Shares of Personal Luxury: % Value 2016-2019
Table 40 Distribution of Personal Luxury by Format: % Value 2015-2020
Table 41 Forecast Sales of Personal Luxury by Category: Value 2020-2025
Table 42 Forecast Sales of Personal Luxury by Category: % Value Growth 2020-2025

Designer Apparel and Footwear (Ready-To-Wear) in South Africa

KEY DATA FINDINGS

2020 IMPACT

Closure of apparel and footwear stores during the lockdown causes sales losses

Other factors also affect sales

With a portfolio of favourite brands, Surtee has a commanding lead

RECOVERY AND OPPORTUNITIES

Slow value recovery as the COVID-19 pandemic stabilises

Recovery of designer apparel and footwear facilitated by strong brand heritage

Celebrity and influencer associations with luxury designer brands to maintain interest

CATEGORY DATA

Table 43 Sales of Designer Apparel and Footwear (Ready-to-Wear) by Category: Value 2015-2020
Table 44 Sales of Designer Apparel and Footwear (Ready-to-Wear) by Category: % Value Growth 2015-2020
Table 45 NBO Company Shares of Designer Apparel and Footwear (Ready-to-Wear): % Value 2015-2019
Table 46 LBN Brand Shares of Designer Apparel and Footwear (Ready-to-Wear): % Value 2016-2019
Table 47 Distribution of Designer Apparel and Footwear (Ready-to-Wear) by Format: % Value 2015-2020
Table 48 Forecast Sales of Designer Apparel and Footwear (Ready-to-Wear) by Category: Value 2020-2025
Table 49 Forecast Sales of Designer Apparel and Footwear (Ready-to-Wear) by Category: % Value Growth 2020-2025

Luxury Eyewear in South Africa

KEY DATA FINDINGS

2020 IMPACT

Luxury eyewear suffers a strong decline due to COVID-19-related store closures

Luxury eyewear negatively impacted by lack of seasonal use and influencer trends

Luxottica leads a highly fragmented category

RECOVERY AND OPPORTUNITIES

Slow return to growth, with sales not reaching the pre-pandemic level by 2025

The struggle to regain sales will impact brands and lead to promotions

Fashion trends to continue influencing luxury eyewear over the forecast period

CATEGORY DATA

Table 50 Sales of Luxury Eyewear by Category: Value 2015-2020
Table 51 Sales of Luxury Eyewear by Category: % Value Growth 2015-2020
Table 52 NBO Company Shares of Luxury Eyewear: % Value 2015-2019
Table 53 LBN Brand Shares of Luxury Eyewear: % Value 2016-2019
Table 54 Distribution of Luxury Eyewear by Format: % Value 2015-2020
Table 55 Forecast Sales of Luxury Eyewear by Category: Value 2020-2025
Table 56 Forecast Sales of Luxury Eyewear by Category: % Value Growth 2020-2025

Luxury Jewellery in South Africa

KEY DATA FINDINGS

2020 IMPACT

Luxury jewellery declines due to store closures during COVID-19 lockdown

Lack of international tourist arrivals due to COVID-19 contributes to decline

Browns marries culture with class

RECOVERY AND OPPORTUNITIES

No recovery of volume growth in the forecast period

Potential changes in the competitive landscape as new partnerships are formed

Offering customisable services may be a distinct advantage

CATEGORY DATA

Table 57 Sales of Luxury Jewellery by Category: Value 2015-2020
Table 58 Sales of Luxury Jewellery by Category: % Value Growth 2015-2020
Table 59 NBO Company Shares of Luxury Jewellery: % Value 2015-2019
Table 60 LBN Brand Shares of Luxury Jewellery: % Value 2016-2019
Table 61 Distribution of Luxury Jewellery by Format: % Value 2015-2020
Table 62 Forecast Sales of Luxury Jewellery by Category: Value 2020-2025
Table 63 Forecast Sales of Luxury Jewellery by Category: % Value Growth 2020-2025

Luxury Leather Goods in South Africa

KEY DATA FINDINGS

2020 IMPACT

Tourist arrivals plunge due to COVID-19, which contributes to decline

The second-hand market provides a challenge to brand new products

Reputation counts, as local names struggle to compete

RECOVERY AND OPPORTUNITIES

Volume sales not set to return to growth in the forecast period

Sales to aspirational consumers likely to be most affected

Pent-up demand to limit the volume decline in luxury travel goods

CATEGORY DATA

Table 64 Sales of Luxury Leather Goods: Value 2015-2020
Table 65 Sales of Luxury Leather Goods: % Value Growth 2015-2020
Table 66 NBO Company Shares of Luxury Leather Goods: % Value 2015-2019
Table 67 LBN Brand Shares of Luxury Leather Goods: % Value 2016-2019
Table 68 Distribution of Luxury Leather Goods by Format: % Value 2015-2020
Table 69 Forecast Sales of Luxury Leather Goods: Value 2020-2025
Table 70 Forecast Sales of Luxury Leather Goods: % Value Growth 2020-2025

Luxury Portable Consumer Electronics in South Africa

KEY DATA FINDINGS

2020 IMPACT

Border closures reduce sales to international tourists but locals purchase in-country

Store closures and lower incomes also negatively impact sales

Luxury mobile phones is the only notable category

RECOVERY AND OPPORTUNITIES

After a release of pent-up demand, a return to decline

Competition from high-end smartphones

Continued absence of luxury wearables due to lack of availability

CATEGORY DATA

Table 71 Sales of Luxury Portable Consumer Electronics by Category: Value 2015-2020
Table 72 Sales of Luxury Portable Consumer Electronics by Category: % Value Growth 2015-2020
Table 73 NBO Company Shares of Luxury Portable Consumer Electronics: % Value 2015-2019
Table 74 LBN Brand Shares of Luxury Portable Consumer Electronics: % Value 2016-2019
Table 75 Distribution of Luxury Portable Consumer Electronics by Format: % Value 2015-2020
Table 76 Forecast Sales of Luxury Portable Consumer Electronics by Category: Value 2020-2025
Table 77 Forecast Sales of Luxury Portable Consumer Electronics by Category: % Value Growth 2020-2025

Luxury Timepieces in South Africa

KEY DATA FINDINGS

2020 IMPACT

Store closures, consumer concern and border closures lead to strong decline

Middle-income aspirational consumers rein in their spending

Cie Financière Richemont maintains its lead with several strong brands

RECOVERY AND OPPORTUNITIES

Return to growth from 2022, but sales will remain low compared with 2019

Return of tourism likely to lead to a reversal of 2020 trends

A rising challenge from second-hand timepieces

CATEGORY DATA

Table 78 Sales of Luxury Timepieces by Category: Value 2015-2020
Table 79 Sales of Luxury Timepieces by Category: % Value Growth 2015-2020
Table 80 NBO Company Shares of Luxury Timepieces: % Value 2015-2019
Table 81 LBN Brand Shares of Luxury Timepieces: % Value 2016-2019
Table 82 Distribution of Luxury Timepieces by Format: % Value 2015-2020
Table 83 Forecast Sales of Luxury Timepieces by Category: Value 2020-2025
Table 84 Forecast Sales of Luxury Timepieces by Category: % Value Growth 2020-2025

Luxury Writing Instruments and Stationery in South Africa

KEY DATA FINDINGS

2020 IMPACT

Store closures and lack of desire to browse contribute to decline

Working from home and less corporate gifting also affect the category performance

Montblanc leads thanks to offering a wide price range and omnichannel distribution

RECOVERY AND OPPORTUNITIES

Volume decline in the forecast period as incomes fall and priorities change

Challenges to growth from second-hand items and other luxury categories

Growth of e-commerce likely, although from a low base

CATEGORY DATA

Table 85 Sales of Luxury Writing Instruments and Stationery: Value 2015-2020
Table 86 Sales of Luxury Writing Instruments and Stationery: % Value Growth 2015-2020
Table 87 NBO Company Shares of Luxury Writing Instruments and Stationery: % Value 2015-2019
Table 88 LBN Brand Shares of Luxury Writing Instruments and Stationery: % Value 2016-2019
Table 89 Distribution of Luxury Writing Instruments and Stationery by Format: % Value 2015-2020
Table 90 Forecast Sales of Luxury Writing Instruments and Stationery: Value 2020-2025
Table 91 Forecast Sales of Luxury Writing Instruments and Stationery: % Value Growth 2020-2025

Super Premium Beauty and Personal Care in South Africa

KEY DATA FINDINGS

2020 IMPACT

Strong variations between category performances

Aspirational consumers are hit hard and retailers thus run promotional campaigns

Lack of impulse purchases and lack of trials negatively impact sales

RECOVERY AND OPPORTUNITIES

Declines set to continue, but consumers will prioritise skin care

Slow return of tourists and growth of e-commerce

Products for darker skin are now available, but limited incomes may hamper growth

CATEGORY DATA

Table 92 Sales of Super Premium Beauty and Personal Care by Category: Value 2015-2020
Table 93 Sales of Super Premium Beauty and Personal Care by Category: % Value Growth 2015-2020
Table 94 NBO Company Shares of Super Premium Beauty and Personal Care: % Value 2015-2019
Table 95 LBN Brand Shares of Super Premium Beauty and Personal Care: % Value 2016-2019
Table 96 Distribution of Super Premium Beauty and Personal Care by Format: % Value 2015-2020
Table 97 Forecast Sales of Super Premium Beauty and Personal Care by Category: Value 2020-2025
Table 98 Forecast Sales of Super Premium Beauty and Personal Care by Category: % Value Growth 2020-2025

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