Personal Luxury in South Africa

PROSPECTS

Many categories struggle as consumers cut back on personal luxury

Amid a struggling economy, lower consumer confidence and limited access to credit are causing volume sales to fall in many categories of personal luxury, including the largest one of designer apparel and footwear (ready-to-wear), luxury jewellery and luxury leather goods. Sales of absolute luxury products, such as luxury fine jewellery, are mostly driven by wealthy individuals and are highly unlikely to experience a sharp drop in demand since these consumers tend to be less price-sensitive.

Dynamic and inclusive, super premium beauty and personal care grows

Super premium beauty and personal care remained one of the stronger categories in personal luxury in 2019, posting above-average value growth and small volume growth. In addition to rising demand from millennials for these products, brands continued to invest heavily in innovation, which kept the category new and interesting, a trend set to continue into the forecast period.

International giants with attractive prices help limit volume decline

The presence of strong internationally renowned brands is helping alleviate volume sales declines in certain personal luxury categories, including designer apparel and footwear (ready-to-wear). These brands are aspirational and more accessibly priced than many other types of luxury goods.

COMPETITIVE LANDSCAPE

Surtee Group leads the category thanks to Hugo Boss

Surtee Group retained the leading spot in 2019, some distance in front of second-ranking African Sales Co (Pty) Ltd. Its Hugo Boss brand has been present in the country for some time and is aspirational to many consumers.

Lower-priced avenues and channels are pursued

No new store openings or brand launches were recorded in 2019, signifying that the personal luxury boom years may be reaching an end. There is lower demand owing to rising unemployment and sluggish economic growth, with brands’ existing stores struggling for profits already without opening new ones.

The personal touch has growth potential

Personal luxury brands trade on an element of exclusivity and emotional connection. Moreover, consumers are increasingly seeking personalisation, not only in the luxury brands they buy, but also in the services around them.

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