Personal accessories revenues are expected to post some of the sharpest declines among all fmcg industries. The industry is concurrently facing pressure from three main factors: consumers’ diminished disposable income, retail closures (and sluggish footfall within the context of social distancing among those already up and running) and record low travel flows limiting demand across most categories, especially at the high end of the price spectrum.
As of July 2020, Euromonitor forecasts indicate global output set to contract by around 4.6% by the end of the year, though with a recovery of around 5.3% growth in 2021 and 4.5% in 2022. This would leave global economic activity levels in 2020 around 4.5% below the pre-COVID-19 forecast.
Along with luxury goods, personal accessories ranks among the hardest hit fmcg industries by COVID-19. Categories such as bags and luggage, jewellery, watches and writing instruments are expected to close 2020 with double-digit declines given the non-essential nature of most of these goods.
With a growing number of governments either recommending or making their use compulsory in public spaces, face masks are becoming ubiquitous and an accidental fashion trend. A growing number of operators are jumping on the bandwagon, launching a growing number of these cashing in on the trend.
The standstill of retail operations across all personal accessories specialist retailers has boosted penetration of e-commerce across markets and categories. While this shift could not offset the drop experienced across physical retailers, it offers clues to the kind of successful strategies to deploy moving forward.
Global shutdown has brought travel to a standstill, and with it, international retail expenditure. Markets such as Hong Kong or Singapore, overdependent on wealthy Chinese shoppers, are struggling to keep up with domestic demand only. On the other hand, retail in China is benefiting from increased domestic demand as locals shop from home.
The rapidly deteriorating economic outlook and lower than expected footfall across retailers that reopened has vanished hopes for a rapid and “V-shaped” recovery to follow the pandemic. Pre-COVID-19 revenues are not expected to have recovered before 2024.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page