Growth of luxury goods will stimulate luxury packaging

7 Oct 2013

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Last year saw the 23 largest luxury products producers seeing an increase in sales of more than ten percent.  In 2011, advice they did even better noting over 13 percent increase in sales.  Ernst and Young consider that advances this year will be more modest, unhealthy but at 4.2 percent it is still impressive, sickness particularly given that most economies in the world are still stagnating but luxury finds its own markets and it is the BRIC countries that are the motor for growth.

Ernst and Young in their report entitled Luxury & Cosmetics Financial Factbook believe that in 2015 growth will increase to between five and six percent and the global value of the market will be somewhere aroundn EUR250bn. This year the value of the market is around EUR220bn.

What products come in the luxury class.  For Ernst and Young it is certain manufacturers of cosmetics, jewellery, clothing, leather goods, watches and perfumes amongst others.

Growth is slower in Europe and North America but it is continuing and at levels much higher than that of the economy in general.  Furthermore margins are also increasing despite increasing taxation such as extra excise duties on alcohols and perfumes.

Russia has been a major target market for luxury companies for many years with major outlets throughout not only the capital but also other major cities.  Poland is now also increasingly becoming a market for luxury products and companies such as Gucci and Louis Vuitton have opened stores in Warsaw.

The key to opening any new market is the ability to maintain high margins which will then cover marketing costs as well as building on the brand image.  Even for cosmetics products this marketing budget can be up to one third of the value of the sold goods.

Clearly part of the image of the brand is the packaging of the product and luxury goods require something which is attractive and unique which in turn accounts for the growth of this sector of the packaging industry as a whole.

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