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Italy remains the third market for luxury goods

by Giulia Crivelli

The world's luxury goods market will slow a bit in 2014, but is still holding up despite the global economic crisis: in 2014, it will grow by 5% at constant exchange rates, hitting €223 billion, according to figures from Worldwide Markets Monitor prepared by Fondazione Altagamma, Bain&Company and Sda-Bocconi presented on October 14.

Moreover, Italy remains the third market for luxury goods, with €16.1 billion, while the US and Japan rank respectively first and second, as in 2013, with €64.9 billion and €18 billion.

The figures show that Italy is still a hotspot for luxury goods purchases, and Milan, the only Italian city in the world's top ten list for shopping destinations, plays an important role. New York city ranks first, at €22.3 billion, followed by Paris (€11.3 billion) and London (€10.1 billion), while Milan is 8th at €5.1 billion.

“In 2014, Italy slipped 1% from 2013, but still remains the main luxury goods manufacturing hub: we estimate that 80% to -- possibly -- 90% of brand products are manufactured here,” said Claudia D'Arpizio, partner at Bain and author of the Worldwide Markets Monitor.

Clearly, most of the purchases of high-end goods in Milan and in Italy were not made by Italian shoppers, but by tourists, both from Europe and from outside the EU, as confirmed by another study presented at the conference and carried out by GlobalBlue, a company offering shopping services to foreign tourists, such as VAT reimbursements.

In the first nine months of the year, tax-free purchases in Europe were unchanged, but Italy stood third after France and the UK, at 16% of total tax-free purchases, which were worth €40 billion in 2013.

The slowdown in tax-free shopping (for the first time in six years) is mainly due to a drop in Russian tourists, who, however, are still the largest group in Italy. By contrast, in Europe the Chinese were the biggest buyers in the first nine months of 2014.

“The luxury goods industry can be a driver for growth and help boost employment,” said entrepreneur and Fondazione Altagamma president Andrea Illy. “Prime Minister Matteo Renzi's government seems to have realized the importance of the culture and creativity sectors, but it is likewise important to emphasize that the luxury goods industry can support further production chains, and that all industry branches - fashion, wine and food, shipbuilding, furniture design - are present in Italy. No other country can boast such an outstanding and varied manufacturing industry.”