This month’s Market Review looks into markets that are showing growth in recessive times. Most notably of those are the four fastest growing markets, which are described as decadent. Just who is sustaining the growth in these markets? Read the Market Review: “Luxuriating in Recessive Times” to learn more.

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steady5_12decline5_12Luxuriating in Recessive Times

Every downturn is different. This time there was plenty of warning of its coming, but in many countries it is only now filtering down to the consumer on the street.

Another feature of this squeeze is the loss of amount of trading down or up at the expense of the middle ground. Many consumers seeing their real incomes tighten have chosen to maintain consumption but at lower cost; perhaps buying cheaper or retailers’ own brands.

At the other end of the market, sales have generally held fast, or continued growing. So we see the four fastest growing markets could be regarded as having at least a touch of decadence. Despite male teenagers’ arguments to the contrary, games software is hardly a necessity in most countries, but in India definitely not. Fragrances in the same country and deodorants in Indonesia could be also be regarded as non-essential, hence their growth from a low base. Given the reported harsh conditions prevailing in the Italian economy, we wouldn’t expect to see television sets as one of the best performers.

In the emerging markets it is the middle and super rich which sustain the growth, but there is a certain amount of immunity from recession in some developed luxury markets. Consumers may well cut down on everyday items but are prepared to buy one or two “reward” items. Fragrance sales in the US have been steady in the last three years where the market, unusually, recorded most of the decline in sales prior to 2008. Consumer research reveals that current mood is the chief motivation for fragrance use (Women’s Fragrances – September 2010). So perhaps it is a case of a spray to lift the mood in the face of gloom.


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