Luxury Goods in the Philippines

LUXURY GOODS IN THE PHILIPPINES

Euromonitor International

July 2014

L U X U R Y G O O D S I N T H E P H I L I P P I N E S P a s s p o r t I

© E u r o m o n i t o r I n t e r n a t i o n a l

LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1

Improved Employment Opportunities Sustains the Demand for Luxury Goods ........................ 1 Brand Choices of Consumers Widened .................................................................................... 1 Key Retailers Maintain Their Dominance .................................................................................. 1 Preference for Store-based Channels Remain ......................................................................... 1 Improved Performance Anticipated........................................................................................... 1

Key Trends and Developments .................................................................................................... 1

Demand for Luxury Goods Remain Stable With the Country’s Robust Economy ..................... 2 Increase in Career-oriented Women Diversely Affects Demand for Luxury Goods .................. 2 Luxury Brand Choices Improve ................................................................................................ 4 Luxury Distribution Channels Grow in Number ......................................................................... 5 Middle Class Gain An Affordable Access To Luxury Goods ..................................................... 6

Distribution ................................................................................................................................... 7

Summary 1 Selected Luxury Shopping Centres 2013 ..................................................... 7 Summary 2 Selected Luxury Department Stores............................................................. 7

Market Data .................................................................................................................................. 7

Table 1 Sales of Luxury Goods by Category: Value 2008-2013................................ 7 Table 2 Sales of Luxury Goods by Category: % Value Growth 2008-2013 ............... 8 Table 3 NBO Company Shares of Luxury Goods: % Value 2008-2012 .................... 8 Table 4 LBN Brand Shares of Luxury Goods: % Value 2009-2012 ........................... 9 Table 5 Distribution of Luxury Goods by Format: % Value 2008-2013 .................... 10 Table 6 Distribution of Luxury Goods by Format and Category: % Value 2013 ...... 10 Table 7 Forecast Sales of Luxury Goods by Category: Value 2013-2018 ............... 10 Table 8 Forecast Sales of Luxury Goods by Category: % Value Growth 2013-

2018 ........................................................................................................... 11

Sources ...................................................................................................................................... 11

Summary 3 Research Sources ...................................................................................... 11

L U X U R Y G O O D S I N T H E P H I L I P P I N E S P a s s p o r t 1


LUXURY GOODS IN THE PHILIPPINES

EXECUTIVE SUMMARY

Improved Employment Opportunities Sustains the Demand for Luxury Goods

Demand for luxury goods was sustained in 2013 by the overall improvement in the country’s

economic condition which provided better employment opportunities for Filipinos. The continued

growth in business process outsourcing activities contributed to improved disposable incomes

providing opportunities for occasional purchases of luxury goods from lower income groups.

Increased participation of women in the workforce likewise proved beneficial as double income

households provided families the flexibility to trade up to more expensive luxury brands.

Brand Choices of Consumers Widened

The growth in the number of upscale hotels, casinos and residences which is expected to

attract affluent tourists in the country led to the recent influx of several luxury brands.

Consumers are, thus, provided with better options with the increasing availability of affordable

and aspirational luxury brands. The wider range of available price points likewise contributed to

the overall robust performance of luxury goods in 2013 as it becomes more accessible to middle

class consumers.

Key Retailers Maintain Their Dominance

The distribution of luxury goods in 2013 remained concentrated among the key retailers with

Stores Specialists Inc (SSI) maintaining its lead having the exclusive franchise to several

prestigious luxury brands. A member of the Rustan’s Group of Cos, SSI is able to take

advantage of its affiliation with key luxury retailer Rustan’s, which has successfully built on its

experience in serving the elite market having been in the business since 1951.

Preference for Store-based Channels Remain

Store-based outlets remain as the key distribution channel for luxury goods in 2013. A number

of expansions were likewise witnessed pointing to the confidence of distributors on the

continued viability of store-based channels amidst the growth in online retailing. Although selling

sites dedicated to luxury goods remained limited, it continued to grow in number with its reduced

price offerings being one of its major advantages over traditional retail channels.

Improved Performance Anticipated

Luxury goods is predicted to return improved value growth over the forecast period compared

to the review period’s performance. This is anticipated to be driven by the sustained satisfactory

economic growth in the country. Luxury electronic gadgets, in particular, hold much promise for

growth given the current limited market appeal these luxury goods have and the small number

of players available locally.

KEY TRENDS AND DEVELOPMENTS



Demand for Luxury Goods Remain Stable With the Country’s Robust Economy

The country’s improved economic performance supported by remittances from overseas

workers and business process outsourcing revenues allowed it to register a robust GDP growth

of 6% in 2013. Furthermore, the upgrades in credit ratings by Fitch Ratings, Standard & Poor’s

Ratings Services and Japan Credit Rating Agency Ltd enhanced the attractiveness of the

country to investors which eventually translated to better employment opportunities for Filipinos.

As such, the unemployment rate continued to drop in 2013 and was accompanied by the growth

in the number of individuals belonging to the high-income group. The improvements can be

better illustrated with the higher growth in the number of households with an annual disposable

income greater than Ps12.5 million in 2013 significantly contributing to the dynamic performance

of luxury goods.

Current impact

The value growth for various luxury goods continued to increase in 2013 as a result of the

satisfactory improvements in the country’s economy. Luxury jewellery and timepieces, in

particular, benefited the most with higher value growth in 2013 of 8% largely driven by the

aggressive expansion in distribution of luxury timepieces.

Among all other categories, luxury travel goods posted the highest value and volume growth

in 2013 at 19% and 16%, respectively. The positive economic environment in the country was

translated to an optimistic outlook among individual consumers who remained open to spend on

travel for business and leisure purposes consequently benefiting luxury travel goods in 2013.

Furthermore, affordable airfares made frequent travel more accessible such that branded luxury

travel goods like Rimowa enjoyed patronage even among upper middle- income consumers.

Motivation to prefer the said brand, however, is not to be traced to the luxurious appeal of the

brand alone but to the good quality of its product offerings as well.

Outlook

The numerous constructions especially of upscale establishments are indicative of the

expected continued improvements in the country’s economic condition. It likewise points to the

anticipated growth of luxury goods given that the predicted sustained increase in employment

opportunities will eventually translate to higher disposable income among individuals. The

expected continued growth in business process outsourcing activities, in particular, will provide

opportunities for middle-income consumers to increase their earnings and be in a better position

to access expensive luxury goods.

Future impact

Luxury goods is predicted to benefit from the positive economic outlook over the forecast

period which is expected to return a constant value CAGR of 3%, marginally higher compared to

the review period. Distributors can benefit most from this by identifying what type of luxury

goods will appeal most to the newly rich consumers and what they would be more likely to

continue to spend money on. Ensuring adequate distribution is also vital in making sure they get

the most out of this expected development.

Increase in Career-oriented Women Diversely Affects Demand for Luxury Goods

Female empowerment was a gradual awakening process which unleashed the potential of

women to excel in various disciplines from politics, academe and the corporate world. Doubts

were initially present on the ability of women to perform on a par with their male counterparts



given the existing predominant patriarchal society in the country. As the working environment

became more democratic and open to electing female leaders, more women are delaying

marriage in favour of attaining higher education and career objectives. Given the hectic lifestyle

of these women who balance work and family duties, there is likewise an increasing preference

to have smaller families. This scenario has its varying effects on the demand for luxury goods

which benefits some while being a detriment to others.

Current impact

The increased participation of women in the workforce has its main advantage of providing

improved financial freedom for affluent women to spend more on themselves and not be entirely

dependent on the income of their husbands or from the inheritance provided by their parents.

This is beneficial for specific luxury goods such as designer bags, luxury jewellery and designer

apparel which are dominated by purchases from women in 2013. Luxury writing instruments,

likewise, benefited as its customer base expanded with the developing interest among women in

2013 alongside the increase in the number of female corporate leaders in the business

community.

An implication of this scenario, however, is the decrease in the amount of time women have to

attend to their domestic duties. As such, most tend to opt for smaller families properly spacing

birth to ensure continued manageability of their multiple tasks both at work and at home.

Designer childrenswear, thus, was placed at a disadvantage as it continued to post marginally

slower value growths since 2010. Furthermore, the resulting hectic lifestyle of women led to the

popularity for combination beauty products which streamlines one’s pampering regimen partly

contributing to the decline in value growth of super premium beauty and personal care in 2013

at 5%.

Outlook

The increase in the number of double income households is predicted to be sustained over

the forecast period given the declining gender preference for a greater number of job

opportunities. In addition, the financial independence attained by women in earning their own

income provides the flexibility to live independently from their spouses should their relationships

become difficult. While divorce is not legal, more women are open to annulment in dissolving

their union amidst the predominantly Catholic population in the country. Given that not all

separated women do end up getting financial support, having an established career helps them

provide for their own needs and their children as well. As such, the willingness of women to

embark on a career is expected to be fuelled not just by the desire to freely continue with their

shopping sprees but also by the sense of security that it can provide.

Future impact

A greater financial freedom for women with their own careers will continue to be

advantageous especially to the luxury goods women are known to splurge on such as luxury

bags and designer apparel. Distributors such as Stores Specialists Inc are predicted to take this

into consideration in their selection process for luxury brands to be introduced in the country.

The effect this has on luxury goods targeted towards men, however, is not to be disregarded for

it is likely to benefit from this development as well through the purchases by women, which are

to serve as gifts to the male members of the family.

While the greater involvement of women in the workforce may not benefit designer

childrenswear, distributors have the option to concentrate instead on encouraging more frequent

purchases and offering luxury brands which have a wider product line including such items like

accessories or children’s bags. For luxury brands which likewise provide designer apparel for

women, for instance, promotions can be linked to a mother’s purchase of designer apparel such



that product lines for children will also benefit from the high inclination of women to shop for

clothes and footwear for themselves.

Luxury Brand Choices Improve

Stores Specialists Inc under the Rustan’s Group of Cos continued to dominate the distribution

of luxury brands in the country. The company holds the exclusive franchise to a number of

prestigious brands such as Hugo Boss, Salvatore Ferragamo and Burberry, among others.

Contributing to the continued success of the company is its affiliation with key luxury retailer,

Rustan’s department store. At the end of the review period, however, the brand choices of

consumers widened. With the growing purchasing power of the middle-income group, a number

of affordable and aspirational luxury brands were made available locally which serves as the

entry point of middle class individuals to the world of luxury goods.

Current impact

Designer apparel (ready-to-wear) is one category of luxury goods which has numerous

players providing wide brand choices for affluent consumers. Branded luxury electronic gadgets,

meanwhile, is highly limited to a few brands in the market. Luxury writing instruments,

meanwhile, is no longer to be considered an indulgence only of the rich with the return of

Sheaffer in 2012. With the wide price range of Sheaffer’s writing instruments, it can capture the

market composed of middle to high-income individuals. Swarovski likewise expanded the

brand’s product offerings in the country with the availability of eyewear and fragrance from the

company.

Amidst these developments, however, Stores Specialists Inc continued to maintain a

comfortable lead against other distributors of various luxury brands owing to the expertise of its

parent company, Rustan’s, in luxury retailing. Having built on its years of experience, Rustan’s is

able to carry over its success in serving the elite sector of the society through its luxury retailing

arm, Stores Specialists which is continuous in selectively introducing luxury brands that would

appeal to the country’s high-end consumers.

Outlook

Given the economic slowdown in European countries, the attention of various luxury brands

shifted towards emerging economies such as the Philippines. This did not only result in the

introduction of various luxury brands but also increased the available supply in the country

especially with regards to alcoholic beverages produced in limited quantities such as

champagne. Such a scenario is likely to continue until advanced economies recover and the

market potential of luxury brands improves in these countries. The rise in the number of upscale

properties, meanwhile, serves to lay the ground for the expected continued entry of luxury

brands locally.

Future impact

Given the low percentage of high-income consumers who remain as the steady audience for

luxury goods, the increase in the number of players in luxury goods will toughen the competition

as more brands are made available to affluent shoppers. Given the relative price insensitivity of

high-income consumers, competition is expected to be based mostly on product quality and on

several intangibles that are related to customer service. The overall shopping experience of

affluent consumers is one important aspect which distributors of luxury brands should pay

attention to in order to retain their loyal clientele and attract others to prefer their brand.

Stores Specialists, meanwhile, is predicted to be more selective in its introduction of new

brands and improve the accessibility of its current products by widening its distribution with

special attention given to locations with dynamic business developments. Its lead is not



expected to be challenged by any player over the forecast period given the strong foothold it has

established together with the synergies in operation that it has with its parent company,

Rustan’s.

Luxury Distribution Channels Grow in Number

High-end department stores and shopping centres are small in number and are concentrated

mainly in Metro Manila compared to those which cater to the mass market such as SM

department stores which have established its presence even in rural areas. Currently, the

choice of luxury high-end department store is limited to Rustan’s and Adora. Upscale shopping

centres, meanwhile, are restricted to Shangri-La Mall, Powerplant Mall and Greenbelt Shopping

Mall. The over-all positive outlook for luxury goods, meanwhile, led to the expansion of high-end

distribution channels in anticipation of the rise in affluent tourists that upscale hotels, casinos

and residences will attract into visiting the country and the increasing disposable incomes

among locals as a result of the country’s robust economy.

Current impact

After the establishment of upscale residence, The St Francis Shangri-La Place Condominium

which is connected to luxury shopping centre Shangri-La Mall, expansion of the current

shopping space was undertaken to now include the newly opened East Wing in 2013. Major

luxury watch retailer, Lucerne, meanwhile, opened eight new watch boutiques in Bonifacio High

Street Central in the last quarter of 2012 in anticipation of the high-end real estate developments

in the area. Luxury travel goods brand, Tumi, likewise, set up its second shop in the same

location in the second quarter of 2012. In the southern part of the country, Ayala Center Cebu is

scheduled to open the Ps2 billion expansion project in the fourth quarter of 2013 which will offer

increased luxury brand choices and a renovated Rustan’s department store.

Those who prefer to shop online likewise have better options with the increasing number of

selling sites dedicated to luxury goods. Luxury cigar distributor, Tabac, for instance, recently

ventured into selling its line of tobacco products through the company’s website. The purchase

of fine wines/champagne and spirits are also increasingly available online through sites such as

ewine.ph, forthtay.com, winephilippines.com and metrovinos.com. Local online purchase of

luxury writing instruments can likewise be carried out through pen.com.ph. Lazada also included

luxury goods in its product line although currently limited to super premium fragrances. Those

looking into purchasing designer bags can opt to shop at mnoluxury.com which currently

provides limited product options but nevertheless holds the potential to grow should it improve

on its limitations in product assortment.

Outlook

Given the small percentage of individuals comprising the high-income group, continued

expansions in luxury distribution channels is predicted to undergo a controlled growth and

remain concentrated in major cities in the country. Another factor contributing to the limited

increase of luxury distribution channels is the lack of adequate space in prime locations within

Metro Manila giving rise to the interest of some developers towards new sites with ample space

for expansion. Online retailing, meanwhile, is predicted to grow although its progress is

predicted to depend on the resolution of a number of issues associated with online purchases

such as security of online transactions, provisions for product returns, transparency with regards

to hidden charges and adequate information for proper product evaluation.



Future impact

As the number of luxury shopping centres is not predicted to continuously increase

significantly, distributors of luxury brands will be in a better position to focus their attention on

introducing affordable and aspirational luxury brands which can be accommodated through

some of the department stores by SM Supermalls or Ayala Malls. Absolute luxury brands,

meanwhile, have to carefully consider their store location and the ambiance must be such that

the perception of prestige and exclusivity is not sacrificed. As such, it would be best for absolute

luxury brands to maintain its distribution solely through upscale shopping centres in prime

locations with high concentration of affluent consumers.

Internet retailers, meanwhile, can take advantage of this scenario and introduce as large an

assortment of luxury brands as operationally feasible. Companies which sell online must

however, ensure that they can process orders smoothly to provide consumers with a pleasant

shopping experience through the internet. Luxury retailers such as Rustan’s likewise have the

option to include internet retailing in their operations or expand its current online catalogue to

include other products aside from beauty and personal care items.

Middle Class Gain An Affordable Access To Luxury Goods

The middle class aspire to own luxury goods and high-income individuals can afford to

indulge in them. Previously, the only option of lower-income groups in owning these luxury items

was through counterfeit merchandise available through bazaars or low-end retail channels. The

difference between an authentic and fake luxury item, however, can be easily discerned

especially by those who are familiar with the original products from a particular brand. As such,

although a counterfeit luxury item may allow easy ownership of high-end brands, it does not,

however, allow an individual to achieve a sense of belongingness with the elite sector of society.

This scenario paved the way for the creation of new ways for middle-income consumers to gain

access especially to absolute luxury brands without significantly straining their finances.

Current impact

Luxury bags are among the most coveted luxury goods, especially among women. It is one

accessory which can easily identify the owner to the economic class to which she belongs to.

Given the high price tag these items carry, middle-income consumers gained affordable access

to these luxury goods through the retail of pre-owned designer bags which is a better option to

purchasing counterfeit items. Second hand designer bags are sold through boutiques and online

shops such as Authentic Brand Retailer, bagaholic.com.ph and authentecite.net. Ownership of

the highly counterfeited brand, Louis Vuitton, is also made more economical by online shopping

club handbagslouisvuittonphilippines.net which sells bags, travel goods and small leather goods

for up to 80% less than its original retail price.

Super premium beauty and personal care is also something which even middle-income

consumers are more open to purchasing occasionally. The desire of women to look good and

appear pleasing to others drives them to prefer expensive brands which serve as special treats

to those for whom its cost is prohibitive. This scenario led to the availability of beauty

subscription boxes which provides small packaging sizes of several beauty products contained

in a box and is affordably priced at around Ps500. As of 2013, Glamourbox and BDJ Box are

two of those providing such a service which includes super premium beauty and personal care

brands such as Bvlgari, Burberry, Guerlain and Schwartzkopf, to name a few, in their product

offerings.

Outlook

The trade of luxury bags is predicted to be sustained over the forecast period. Fashionable

high-income women are expected to provide a steady supply of used designer bags as they



regularly update their collections with the latest designs. The demand is likewise expected to

remain stable given that the ability to gain access to these expensive items at a lower cost is a

practical alternative for the middle class to own several pieces. Beauty subscription boxes,

meanwhile, are expected to continue to appeal mainly to younger age groups who are searching

for the right brands to meet their varying personal needs. Other innovative ways of making

luxury items accessible to a wider income group is predicted to be made available over the

forecast period given the high desirability of these expensive items.

Future impact

The retail of second hand designer bags has an undesirable effect on the distributors of the

brand as they lose the potential to capture expected occasional purchases from the middle-

income group. As such, their clientele is expected to be more exclusive to the high net worth

individuals in the country. This, however, has beneficial effects as well to the distributors of

luxury brands for it is predicted to help reduce the sale of counterfeit items which harms the

image of designer brands. Distributors, meanwhile, can curb the inclination of affluent women to

sell their designer bags by providing after-sales service or provisions for the proper maintenance

and repair of their slightly damaged items.

Of all the luxury goods, super premium beauty and personal care products is expected to

remain as most accessible to the middle-income group since it is the only one which can reduce

its price through smaller packaging sizes. As such, beauty subscription boxes and other

alternative forms for distributing luxury items that may be made available over the forecast

period should be considered by distributors in formulating their marketing strategies since it has

the potential to encourage more frequent purchases from lower-income groups.

DISTRIBUTION

Summary 1 Selected Luxury Shopping Centres 2013

City Location No of outlets

Greenbelt Shopping Mall Makati City 1

Powerplant Mall Makati City 1

Shangri-la Mall Mandaluyong City 1

Source: Euromonitor International

Summary 2 Selected Luxury Department Stores

City Location No of Outlets 2013

Rustan's Department Store Mandaluyong City 1

Rustan's Department Store Makati City 1

Adora Makati City 1


MARKET DATA

Table 1 Sales of Luxury Goods by Category: Value 2008-2013

PHP million



2008 2009 2010 2011 2012 2013 Designer Apparel (Ready- 8,878.6 9,385.0 10,023.5 10,792.2 11,560.4 12,356.5 to-Wear) Fine Wines/Champagne 91.9 94.6 95.7 98.7 107.7 116.5 and Spirits Luxury Accessories 2,772.4 3,154.3 3,377.0 3,670.8 3,963.8 4,061.0 Luxury Electronic Gadgets 2.2 1.7 3.6 2.3 5.4 6.1 Luxury Jewellery and 3,465.7 3,264.4 3,495.5 3,775.4 4,056.0 4,368.9 Timepieces Luxury Travel Goods 67.3 74.9 94.9 118.9 149.7 178.5 Luxury Cigars 69.4 75.0 81.7 89.5 98.4 107.9 Luxury Writing 100.2 107.7 116.3 126.2 137.5 148.5 Instruments and Stationery Super Premium Beauty 1,307.3 1,338.0 1,398.4 1,437.2 1,503.6 1,579.7 and Personal Care Luxury Goods 16,755.0 17,495.4 18,686.4 20,111.1 21,582.6 22,923.5

Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2 Sales of Luxury Goods by Category: % Value Growth 2008-2013

% current value growth 2012/13 2008-13 CAGR 2008/13 Total Designer Apparel (Ready-to-Wear) 6.9 6.8 39.2 Fine Wines/Champagne and Spirits 8.2 4.9 26.7 Luxury Accessories 2.5 7.9 46.5 Luxury Electronic Gadgets 13.0 22.3 173.5 Luxury Jewellery and Timepieces 7.7 4.7 26.1 Luxury Travel Goods 19.2 21.5 165.1 Luxury Cigars 9.6 9.2 55.4 Luxury Writing Instruments and 8.0 8.2 48.3 Stationery Super Premium Beauty and Personal Care 5.1 3.9 20.8 Luxury Goods 6.2 6.5 36.8


Table 3 NBO Company Shares of Luxury Goods: % Value 2008-2012

% retail value rsp Company 2008 2009 2010 2011 2012 LVMH Moët Hennessy 13.6 13.6 14.4 14.5 12.2 Louis Vuitton SA Ralph Lauren Corp 3.9 5.3 7.2 8.4 9.3 PPR SA 8.5 9.1 9.3 9.2 9.1 Salvatore Ferragamo SpA 4.7 4.2 5.6 6.5 6.5 Burberry Group Plc 2.4 3.1 3.9 5.0 5.8 Rolex SA 4.3 3.5 3.4 3.4 3.3 Prada SpA 1.6 1.9 2.0 2.3 2.6 Tod's SpA 2.4 2.1 2.2 2.4 2.4 Hermès International SCA 1.4 1.9 2.1 2.2 2.2 Swatch Group Ltd, The 2.6 2.1 2.1 2.0 2.0 Richemont SA, Cie 1.2 1.2 1.2 1.3 1.4



Financière Luxottica Group SpA 1.1 1.4 1.4 1.3 1.3 L'Oréal Groupe 1.6 1.4 1.5 1.4 1.2 Coach Inc 0.9 0.9 0.9 0.9 1.0 Coty Inc 1.2 1.0 0.9 0.9 0.9 Procter & Gamble Co, The 0.8 0.9 0.9 0.8 0.8 Michael Kors Holdings Ltd - - - 0.4 0.6 VF Corp - 0.4 0.4 0.5 0.6 Warnaco Group Inc 0.5 0.5 0.5 0.5 0.5 Longchamp SAS 0.4 0.4 0.4 0.4 0.4 Swarovski AG 0.2 0.2 0.2 0.2 0.2 Giorgio Armani SpA 0.2 0.2 0.2 0.2 0.2 Tiffany & Co 0.1 0.1 0.1 0.1 0.1 Chanel SA 0.1 0.1 0.1 0.1 0.1 Bulgari SpA 2.2 2.2 2.5 - - Others 44.1 42.3 36.5 35.1 35.6 Total 100.0 100.0 100.0 100.0 100.0


Table 4 LBN Brand Shares of Luxury Goods: % Value 2009-2012

% retail value rsp Brand Company 2009 2010 2011 2012 Ralph Lauren Ralph Lauren Corp 5.3 7.2 8.4 9.3 Salvatore Ferragamo Salvatore Ferragamo SpA 4.2 5.6 6.5 6.5 Gucci PPR SA 6.3 6.2 6.2 6.0 Burberry Burberry Group Plc 3.1 3.9 5.0 5.8 Donna Karan LVMH Moët Hennessy 7.0 7.1 6.4 3.8 Louis Vuitton SA Rolex Rolex SA 3.5 3.4 3.4 3.3 Louis Vuitton LVMH Moët Hennessy 2.2 2.4 2.4 2.9 Louis Vuitton SA Prada Prada SpA 1.9 2.0 2.3 2.6 Tod's Tod's SpA 2.1 2.2 2.4 2.4 Hermès Hermès International SCA 1.9 2.1 2.2 2.2 Bottega Veneta PPR SA 2.2 2.1 2.1 2.2 Marc Jacobs LVMH Moët Hennessy 1.9 2.3 2.3 2.1 Louis Vuitton SA Omega Swatch Group Ltd, The 1.8 1.8 1.8 1.7 Cartier Richemont SA, Cie 1.1 1.2 1.3 1.3 Financière Ralph Lauren Luxottica Group SpA 1.4 1.4 1.3 1.3 TAG Heuer LVMH Moët Hennessy 1.1 1.1 1.1 1.1 Louis Vuitton SA Ralph Lauren L'Oréal Groupe 1.2 1.2 1.2 1.0 Coach Coach Inc 0.9 0.9 0.9 1.0 Bvlgari LVMH Moët Hennessy - - 0.9 0.9 Louis Vuitton SA Balenciaga PPR SA 0.7 1.0 0.9 0.9 Calvin Klein Coty Inc 1.0 0.9 0.9 0.9 Hugo Boss Procter & Gamble Co, The 0.9 0.9 0.8 0.8 Christian Dior LVMH Moët Hennessy 0.7 0.6 0.6 0.6 Louis Vuitton SA Michael Kors Michael Kors Holdings Ltd - - 0.4 0.6 7 For All Mankind VF Corp 0.4 0.4 0.5 0.6 Calvin Klein Warnaco Group Inc 0.5 0.5 0.5 0.5 Céline LVMH Moët Hennessy 0.3 0.4 0.4 0.5



Louis Vuitton SA LONGCHAMP Longchamp SAS 0.4 0.4 0.4 0.4 Hublot LVMH Moët Hennessy 0.3 0.4 0.3 0.4 Louis Vuitton SA Longines Swatch Group Ltd, The 0.3 0.3 0.3 0.3 Bvlgari Bulgari SpA 2.2 2.5 - - Others 43.2 37.4 36.1 36.5 Total 100.0 100.0 100.0 100.0


Table 5 Distribution of Luxury Goods by Format: % Value 2008-2013

% retail value rsp 2008 2009 2010 2011 2012 2013 Store-Based Retailing 99.9 99.9 99.9 99.9 99.9 99.9 - Grocery Retailers 0.0 0.0 0.0 0.0 0.0 0.0 - Non-Grocery Retailers 99.9 99.9 99.9 99.9 99.8 99.8 Non-Store Retailing 0.1 0.1 0.1 0.1 0.1 0.1 Total 100.0 100.0 100.0 100.0 100.0 100.0


Table 6 Distribution of Luxury Goods by Format and Category: % Value 2013

% retail value rsp DA FWCS LA LEG LJT LTG Store-Based Retailing 99.8 100.0 100.0 100.0 100.0 100.0 Grocery Retailers 0.0 3.5 0.0 0.0 0.0 0.0 Non-Grocery Retailers 99.8 96.5 100.0 100.0 100.0 100.0 Non-Store Retailing 0.2 0.0 0.0 0.0 0.0 0.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 LC LWS SPB Store-Based Retailing 100.0 99.9 99.6 Grocery Retailers 0.0 0.0 0.0 Non-Grocery Retailers 100.0 99.9 99.6 Non-Store Retailing 0.0 0.1 0.4 Total 100.0 100.0 100.0


Key: DA = Designer Apparel (Ready-to-Wear); FWCS = Fine Wines/Champagne and Spirits; LA = Luxury Accessories; LEG = Luxury Electronic Gadgets; LJT = Luxury Jewellery and Timepieces; LTG = Luxury Travel Goods; LC = Luxury Cigars; LWS = Luxury Writing Instruments and Stationery; SPB = Super Premium Beauty and Personal Care

Table 7 Forecast Sales of Luxury Goods by Category: Value 2013-2018

PHP million 2013 2014 2015 2016 2017 2018 Designer Apparel (Ready- 12,356.5 12,725.3 13,086.7 13,444.4 13,795.8 14,142.0 to-Wear)



Fine Wines/Champagne 116.5 121.2 125.8 130.3 134.7 138.8 and Spirits Luxury Accessories 4,061.0 4,146.1 4,266.5 4,371.0 4,504.1 4,541.4 Luxury Electronic Gadgets 6.1 6.7 7.3 8.0 8.8 9.6 Luxury Jewellery and 4,368.9 4,547.7 4,734.4 4,932.4 5,142.0 5,363.8 Timepieces Luxury Travel Goods 178.5 196.3 212.0 224.8 233.8 238.4 Luxury Cigars 107.9 113.8 119.5 124.9 129.9 134.4 Luxury Writing 148.5 154.3 159.2 163.2 166.5 169.5 Instruments and Stationery Super Premium Beauty 1,579.7 1,599.4 1,616.7 1,633.4 1,649.8 1,665.4 and Personal Care Luxury Goods 22,923.5 23,610.8 24,328.3 25,032.3 25,765.3 26,403.3

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 8 Forecast Sales of Luxury Goods by Category: % Value Growth 2013-2018

% constant value growth 2013-18 CAGR 2013/18 TOTAL Designer Apparel (Ready-to-Wear) 2.7 14.4 Fine Wines/Champagne and Spirits 3.6 19.1 Luxury Accessories 2.3 11.8 Luxury Electronic Gadgets 9.5 57.4 Luxury Jewellery and Timepieces 4.2 22.8 Luxury Travel Goods 6.0 33.6 Luxury Cigars 4.5 24.6 Luxury Writing Instruments and Stationery 2.7 14.1 Super Premium Beauty and Personal Care 1.1 5.4 Luxury Goods 2.9 15.2

Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

SOURCES

Summary 3 Research Sources

Trade Associations Chamber of Cosmetics Industry of the Philippines (CCIP)

Guild of Philippine Jewellers Inc (GPJI)

Trade Press BagHagDiaries

Bryanboy.com

Female Network

Kumukutitap

Manila Fashion Observer

Philippine Star / Pen Manila

Rolexwatchesphilippines.blogspot.com

Style & Soul



Style Manila


Documents

Luxury Goods in the Philippines