Important Links

Global Luxury Market: Resilience or Soft Landing

12 November 2019SectorsEmerging Markets

The Global Luxury market is forecasted to grow to US$444 billion (RMB3.1tr) by 2025, with Chinese customers expected to account for over 40%. However in the near term, the luxury goods sector could see more volatility as a number of investor concerns and potential headwinds have re-emerged.

These factors include:

  • ongoing protests in Hong Kong (which could shave off ~1ppt of industry growth in 4Q19E),
  • unresolved US-China trade negotiations,
  • potential US tariffs on European luxury goods (including wines and spirits),
  • Brexit uncertainty,
  • increase in consumption tax in Japan and
  • FX volatility (in particular further RMB depreciation).

Bright Spark in Travel Retail Shopping:

  • Duty free stores are Chinese consumers' preferred channel for luxury shopping especially for young consumers given attractive pricing, and they continue to benefit from this consumption upgrade.
  • Citi analysts expect global travel retail (duty- & tax-free) shopping to exceed US$130bn by 2025E, at an 8% CAGR, with China's share doubling to 16%.

Global Luxury Market: Resilience or Soft Landing


Stay selective:

  • Citi analysts prefer companies in the soft luxury segment (leather accessories, bags and designer clothing) over the hard luxury segment (jewelry and watches) as the latter is traditionally more impacted by macro uncertainty and swings in consumer sentiment.
  • Within soft luxury, Citi analysts also appreciate continued efforts by mega-brands to reinvest the dividends of growth to protect barriers to entry and stay ahead of the game.

Our recent research

Is a Manufacturing Rebound Expected?

A number of global manufacturing and production indicators have lagged in recent months. However, with global demand expected to firm, heavy manufacturing countries like China, Korea and Germany, which have underperformed, may be poised to rebound.

Find out more

Economics

Keeping Watch on the US Economy

Last week, the US Federal Reserve met market expectations by cutting rates by 25bps. Whilst this is their third rate cut since July, Chairman Powell signaled a rate pause going forward, indicating it could take a “material change” in the outlook for the Fed to act again.

Find out more

EconomicsPoliticsEquities

China Rural Land Reform: Where Are We Heading?

The National People's Congress approved the revised Land Management Law on August 26, which will go effective on January 1. Citi analysts examine the economic implications of rural land reform in China.

Find out more

EconomicsPolitics

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.