Círculo Fortuny presents the first quantitative and qualitative study of Spain’s high-end sector
SPAIN’S LUXURY MARKET COULD DOUBLE IN SIZE BY 2025 TO REACH €19-21BN
- Círculo Fortuny presents the first quantitative and qualitative study of Spain’s high-end sector, in collaboration with El Corte Ingles and managed by Bain & Company
- The report, finds that Spain can become a top European Excellence player if right steps are taken to support the development of Spain’s global brand
Madrid, April 12 2018 – Spain’s luxury market could double in size by 2025 to reach €19-21BN. Currently estimated at €9.2bn in 2017, the Spanish luxury market trails large European luxury destinations like Italy or France. But the country is fast gaining popularity among young consumers, and the differentiated tourism and luxury hospitality infrastructure could serve as a launching pad for the growth of other luxury segments.
These are the key findings from the Spanish Luxury: Today & Tomorrow report presented today in Madrid. The study was conducted in partnership with Círculo Fortuny the association which represents the Spanish companies in the high-end industry and cultural institutions with international prestige, and El Corte Ingles, Europe’s largest department store group. The report examines key segments of the luxury ecosystem –personal luxury goods, luxury hospitality and restaurants, gourmet food and fine wine, luxury design – and explores how they could come together to drive to growth of Spain’s brand on a global scale.
Carlos Falcó, Executive President of Círculo Fortuny, has highlighted “The luxury sector in Spain may be small in comparison to European rivals but it offers unique experiences especially in gourmet food and high-end hospitality” said. As demand for such experiences grows, especially among luxury younger consumers, the luxury sector in Spain could see strong growth in the coming years.”
“This is an exciting time for luxury in Spain,” said Claudia D’Arpizio, a partner at Bain & Company in Milan and the lead author of the study. “The country is well-positioned to raise its profile as a luxury destination and producer of high-quality goods. To do this, Spain will need to build on its strengths, such as a differentiated luxury hospitality offering and thriving gourmet food ecosystem, in order to further develop its brand both with local consumers and with global luxury shoppers.”
Key Segments of the Spanish Luxury Market
The luxury market in Spain reached €9.2bn in 2017, up 9% from 2016 and outpacing worldwide growth in this segment. The report examines the four key components of this market:
- Personal luxury goods accounted for €5.1bn, making up more than half of the market. Despite the brisk growth over the last five years, Spain ranks 5th in size among key European countries. Tourists account for 80-85% of sales, with Chinese consumers representing the top nationality for luxury shopping in Spain. Local consumers represent 15-20%, and remain an important customer segment especially for beauty and hard luxury. Geographically, the market is concentrated primarily on key cities Madrid and Barcelona which account for 80% of the market.
- Luxury hospitality and restaurants were worth €1.8bn, displaying a very positive trend over the past five years. While luxury hospitality in Spain is less exclusive than other European countries, there are “islands of excellence” which Spain can leverage as a key differentiating factor in the global market.
- Gourmet food, fine wine and spirits accounted for €1.5bn, with the market dominated by local players. Exports are increasingly relevant for Spanish players, particularly in the wine segment, highlighting the large untapped potential for Spanish brands on the international stage.
- Luxury design reached €0.8bn, with domestic sales picking up after the global financial crisis but with growth still remaining soft. The B2B channel is important, with new luxury hospitality developments driving growth. Spain offers high-quality pieces with competitive pricing and can position unique craftsmanship capabilities and value for money as key differentiating factors for Spanish design products.
Challenges and opportunities ahead
To enhance its brand and become top-of-mind on the global luxury stage, Spain can look at some of the actions taken by rival luxury markets like Italy or France. Stronger support on an institutional level, as well as practical measures like a shortened visa process for Chinese visitors and improved flight connections are some of the measure that could support growth in the coming years.
Looking ahead, the luxury market in Spain could grow at 9-10% annually, driven by the core segments of personal luxury goods and luxury hospitality and restaurants. This would lead the market to reach €19-21bn by 2025 and cement Spain’s among top global luxury players.