France: World leader in luxury goods
According to a survey by Bain & Company, a global management consulting firm, growth in the world luxury sector increased by about 10% in 2012. French companies, which account for a quarter of worldwide turnover, are the most dynamic in the sector.
The luxury goods sector is posting unprecedented economic dynamism with a worldwide turnover of around €210 billion in 2012, a quarter of which was generated by the French luxury goods industries. A comparative survey by the Paris-Ile-de-France Chamber of Commerce and Industry shows that, out of 270 prestige brands, 130 are French.
France’s leading position is confirmed by an exceptional increase in sales in all luxury goods areas taken together, including leather goods, jewellery, clothing, accessories, wines and spirits, and lifestyle industries. In 2012, the LVMH Group posted a 19% overall sales increase and a record turnover of €28.1 billion. Also in 2012, as another example emblematic of this success, the Hermès luxury group reported a historic €3.4 billion turnover, i.e. a 22.6% sales increase.
According to Mr Bernard Arnault, CEO of the French multi-brand luxury group LVMH, “It takes time and patience to develop a brand”. Luxury goods do not go out of fashion, hence their prestige and authenticity. The exceptional “made in France” know-how behind French luxury goods makes them rare and exclusive, with unmistakable artisan quality as their hallmark.
The French luxury goods industry currently enjoys vitality and international outreach owing to the legacy of its past, to its products as symbols of quality and to a coherent strategy suited to geo-economic realities.
To ensure competitiveness, luxury industry actors have opted for solidarity. An emblem of this synergy is the Comité Colbert association: as a platform for exchanges and proposals, it brings together 75 French firms and provides its members with development tools. The Comité Colbert actively helps to promote France’s image. On the one hand, French taste is embodied by a collective strategy. On the other, exchanges on best practices and policy among members help anticipate market trends. The Comité Colbert is also in a position to approach public authorities directly in France, Europe and the rest of the world. It therefore possesses significant negotiating power.
The ability of French luxury goods industries to adapt to global markets is another key to their success. Traditionally, the United States, Japan and Europe are the leading markets for French know-how. Yet new centres for the consumption of deluxe goods have emerged as a result of global economic shifts. China has become the second biggest consumer of luxury goods, behind the United States but ahead of Japan. The visionary strategy of French luxury firms has enabled them to capture new market shares worldwide. The Comité Colbert has published spectacular statistics: today, 12% of the revenue of French luxury firms comes from the Chinese market. In 2012, despite existing tariff barriers, they posted a 15% increase in Brazil and a 20% increase in India.
The keys to the global economic success of French luxury goods industries may be summed up as follows: French firms like LVMH, the PPR Luxury Group, Hermès and Chanel have been able to exploit their comparative advantages in terms of prestige, know-how and quality, while implementing a conquering strategy in keeping with today’s geo-economic realities.