Index Luxury is in fashion for the next generation of Chinese Chinese Gen Z, Y and millennials now lead the world in luxury goods purchases G L O B A L G R O W T H O F L U X U RY M A R K E T I N 2 0 1 7 20 to 34 T H E BUYI N G POWE R O F C H I N E S E M I L L E N N I A LS 80 % Generation Z and Y Expected change in luxury goods spending among young adult digital buyers in China, sept 17 % of respondents Proportion of luxury market made up of cars hospitality personal goods Source: bit.ly/2CdLAFk decrease 4% 262bn sales of personal luxury goods, known as the core of the core remain unchanged 28% cagr* 1996-2017 6 global personal luxury goods market, 1996-2017e (bn) % 136 133 133 128 128 96 92 85 increase significantly 12% 251 250 *compound annual growth rate 212 262 218 224 192 increase slightly 56% 173 170 167 159 153 147 108 Source: KpMG and Mei.com, China s connected consumers:the rise of the millenials, conducted by Ipsos, 12 December 2017 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 85 % 68 share of global personal luxury goods consumers, by generation 6 28% % Source: KPMG and e-commerce platform Mei.com, September 2017 share of global personal luxury sales value, by generation 3% 4% % 26% 28 % Proportion of luxury growth in 2017 fuelled by Generations Y and Z 1% 31% 29% Proportion of millennials expected to increase their spending on luxury goods in 2018 Proportion of millennials planning to uphold their current spending patterns 26% 26 % 38% 38% 91 % 86 % And they are buying oine 38% 36 % 6% 4% 2016 2017e z 27% 30% 1% 2% 2016 y x 2017est baby boomer Increase in sales through digital channels between 2016 and 2017 Proportion of total luxury sales purchased oine silent Source: bit.ly/2CdLAFk CHINA IS BUYING Change in contributions of Chinese and non-Chinese consumers to luxury goods market growth, 2012-17E China overtakes Europe and America in purchases of luxury goods 13% 11% chinese spending non-chinese spending total market 6% 3% 2% 2% 0% -2% 2000 2010 european american 2013 2014 japanese chinese 2015 2017e cagr, 2012-15 other asian rest of world share of global personal luxury goods by region, 2016-17est 250bn 2016 -3% annual growth, 2015-16 annual growth, 2016-17e annual annual growth growth at constant at current exchange exchange rates rates (16-17est) (16-17est) 262bn 4% 5% 1% 0% 7% 8% 15% 18% 9% 8% 4% 8% 14% 14% 6% 9% 33% 32% 2% 2% 15 % sales growth of personal luxury goods in China in 2017 20bn size of total market in China for luxury goods in 2017 32 % 33% 33% 2016 europe americas 6% share of personal luxury goods purchased by Chinese nationals 2017e rest of asia japan 489bn 7% mainland china rest of world sales of luxury cars in Asia in 2017 Source: bit.ly/2CdLAFk cim.co.uk/exchange