“Luxury is now a fiercely competitive industry”

“Changes in behaviours, dazzling growth of markets: Robert Polet, President and CEO of Gucci Group, analyses the luxury market’s major tendencies.”

 

How would you define luxury today?
Luxury today is about an overall state of well-being - a complete lifestyle that makes customers’ lives better. Luxury is anything that makes a person feel better, from spare time, to a beautiful home, to luxurious products that are experimental yet relevant.

 

How is this market evolving?
The luxury sector is growing at a faster rate than ever before. The rich are getting richer and more people are getting rich, consuming more luxury goods and services. Their needs and desires are becoming increasingly sophisticated.
Markets that were small, or even impenetrable, just a few years ago, such as China, India and Russia, are growing at breathtaking speed. The luxury goods consumption is evolving quickly, too. Increasing wealth has given rise to a tremendous number of new segments. More consumers are achieving wealth and wealthy consumers are “trading up” to ever more exclusive products.
In addition, consumers of moderate wealth are willing to reach beyond their means. If a consumer can’t afford a bag or an evening gown, they will make do with a perfume. DESIRE is a common denominator which knows no economic boundaries. Another major shift in luxury, particularly fashion, is the number of new players. It seems nearly every super model or celebrity wants to build their own brand. Luxury is now a fiercely competitive industry. We need to be faster, smarter more desirable than our competitors to maintain our leadership position. Impeccable service and an exciting brand environment are always mandatory even when it comes to e-commerce which has become a very important tool in our business.

 

Which countries have a high potential?
The emerging markets are growing extremely quickly. Wealth in Russia is growing quickly. This market shows significant potential. The Chinese market is in a phase of very strong development and Hong Kong, Macau, Taiwan and Singapore remain very important hubs. Vietnam has one of South-East Asia’s fastest-growing economies and has set its sights on becoming a developed nation by 2020.  India is the fastest-growing market for wealth creation. India inherits a very strong luxury culture which makes Indians very appreciative of our brands and products.

 

Which countries is Gucci Group watching?
Gucci Group is keenly attuned to high-growth markets. We constantly monitor economic growth and purchasing patterns region by region, country by country, location by location in order to identify the right moment to enter or expand our presence. Gucci, for example, opened a store in Vietnam in May, 2007 and the first Gucci Group store in India in October, 2007.