In early November 2020 Euromonitor International published revised forecasts for personal accessories for 2020 to 2025 that considered the implications of the novel coronavirus COVID-19. Overall COVID-19 is expected to suppress global demand for personal accessories severely in 2020 but the virus’s effects are expected to be markedly different across different categories and markets. A strong rebound is expected in 2021 but pre-COVID-19 revenues are not expected to be fully recovered until 2025.
This report comes in PPT.
As one of the most discretionary and income elastic fmcg industries, personal accessories revenues continue to suffer from COVID-19 retail lockdowns and travel disruption during Q4, notably in Western Europe. Big ticket items and travel accessories are expected to suffer the most.
As of November 2020, a growing number of markets in Western Europe are tightening restrictions on retail, travel and hospitality. This coincides with one of the busiest shopping periods of the year ahead of the holiday season and Black Friday. Online shopping events during Q4, such as Single’s Day in China and Cyber Monday, are expected to post record breaking sales, benefiting from limitations on store-based retail.
The easing of restrictions across key markets during Q3 and a better than expected performance in China have boosted quarterly performance among key luxury players. LVMH’s third quarter results show a return to growth (a double-digit organic revenue increase) within the fashion and leather goods division. Similarly, Kering SA has recently reported improvements, notably in North America and Asia Pacific.
As of November 2020, travel restrictions remain in place across the vast majority of markets worldwide. According to the UN World Tourism Organization, 40% of destinations have eased restrictions, but the majority remain under some form of ban. The impact on markets and categories heavily reliant on international spend, such as Hong Kong or fine jewellery, remains significant.
E-commerce value in 2020 is expected to match the total recorded over the 2017-2019 period. Since mid-March, most companies have accelerated digitalisation in an attempt to counterbalance store-based losses. This shift to digital is speeding up deals of all sorts, as seen this quarter with Farfetch, Alibaba and Richemont.
Personal Accessories refers to a diversified group of personal products including Bags & Luggage, Jewellery, Watches and Writing instruments.
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