The market potential for Italian beauty and expertise in emerging markets.
The Exporting la dolce vita (EDV) report has presented an analysis of the potential of high-added-value consumer goods characteristic of Italy in global markets, produced thanks to Italian culture, creativity and taste. The report is based on a partnership between the Confindustria Research Centre, consultancy company Prometeia, Italian statistics institute Istat, and the sector federations and associations: Confindustria Moda, Federalimentare, FederlegnoArredo, AIP, ANFAO, ASSICA, Assocalzaturifici, Assopellettieri, Confindustria Federorafi, Federvini and SMI. The analysed products have been defined as “Belli e ben fatti” (BBF, Fine and well-made). The products are food, fashion and furniture items capable of conveying an added value characteristic of Italy, enjoying in turn a higher price by at least 20% compared to products from global competitors. The BBF goods in 2017 constituted approximately 20% of Italian manufactured exports. This year, EDV* has focused on emerging markets, categorised on the basis of indicators of specific interest for this analysis, such as the imports of BBF goods from Italy, and the local dimension of the affluent class (level and prospects). The report has prepared five-year forecasts on the import of Italian products in the markets analysed. These have been made based on the current situation concerning commercial policy. Therefore, any changes to trade rules made during the forecasting period have not been taken into consideration.
New markets: prospects for BBF goods In 2017, imports of BBF products from Italy to emerging economies alone totalled over 10 billion euro. The forecasts presented in this report however show that this figure may be much larger in the future. Indeed, in the next six years, imports to new markets could increase to up to approximately 15 billion euro, an expected cumulative growth close to 40% and, moreover, almost double compared to estimates for developed markets (roughly 20% for the same period). A rosier outlook predicts that imports into new markets could total over 18 billion euro. The “nouveau riche” category in the markets analysed will jump from 486 million in 2017 to 660 million in 2023: technically, there will be 174 million new potential customers purchasing Italian “beauty and expertise”. This is a “justifiable” optimism based on the premise that Italy’s market share in key markets will increase, sector by sector. This is no fanciful ambition, given that competitors very similar to Italy have already managed to do so, and targeted and coordinated action (on the level of businesses, associations and the country’s economic system) could allow achieving this goal to be realistic. The ‘top premium’ emerging markets flagged up in the report are China, Russia and the United Arab Emirates, where a consistent demand is apparent, as well as the willingness to pay reasonable prices for quality Italian products. Three other burgeoning markets can also be added to this group: Saudi Arabia, Mexico and Malaysia. However, the report has also highlighted that a number of risk factors could impair the growth in exports of “top-of-the-range” Italian products: the main factor is the “protectionist spiral” of trade relations between the USA and its partners, along with the potential escalation of geopolitical tensions in the Middle East and Asia, as well as the development of sanctions imposed on Russia.
*The publication was completed with data available up to April 2018.