Do you remember, back in your primary school days, the prettiest girl in class? Of course you do. She had silk ribbons in her hair, was always the lead in the school play, and was the unofficial teacher’s pet. She was pretty and she knew it. Everyone knew it. And we all lived happily ever after.

Paris is like that girl. And her wardrobe is the most fabulous in the world. Which explains why, on average, 27 million visitors flock to the capital’s cobbled ruelles to step into a pair of Christian Louboutin heels, make precious discoveries at the little vintage shops, get lost in Galeries Lafayette and Franck et Fils, and indulge in ethereal perfumes by Chanel and Annick Goutal.

It’s all as pretty as a Ladurée macaroon.

But Paris is just the shop window – behind it is a whole industry that leads the world in the luxury goods market. The European luxury goods sector, whose output includes leather goods, textiles, fine wines and spirits, and designer jewellery, is the biggest in the world. European brands account for at least 70 per cent of the global luxury goods market and around three per cent of European GDP. It employs approximately one million workers directly and a further 500,000 indirectly. According to Comité Colbert, an association set up to promote luxury, the European luxury sector contributes more than €110bn to the tax authorities through sales, corporate and export taxes.

In Interbrand’s top 10 of the highest net worth luxury brands in the world, France is represented by four brands. But that is not the whole list. A comparative survey by the Paris-Ile-de-France Chamber of Commerce and Industry shows that, out of 270 prestige brands, 130 are French. Together, these account for a quarter of worldwide turnover and contribute around €217bn to the global economy.

One of the biggest players is the LVMH Moët Hennessy Louis Vuitton group. Last year, it recorded a revenue of €29.1bn, an increase of four per cent over 2012. Another example is the Hermès luxury group, which in 2012 reported a historic €3.4bn turnover – this translates into a 22.6 per cent sales increase over the previous year.

The success of the French luxury goods market did not happen overnight. Its present vitality draws on the legacy of its past, a long-term coherent strategy and an artisanal appreciation which is centuries old. As Bernard Arnault, LVMH CEO, says: “It takes time and patience to develop a brand.”

Moreover, this success is not due to an individual effort. To ensure competitiveness, luxury industry actors have opted for solidarity. An emblem of this synergy is the Comité Colbert association: as a platform for exchanges and proposals, it brings together 75 French firms and provides its members with development tools. The Comité Colbert actively helps to promote France’s image. On the one hand, French taste is embodied by a collective strategy. On the other, exchanges on best practices and policy among members help anticipate market trends. The Comité Colbert is also in a position to approach public authorities directly in France, Europe and the rest of the world. It therefore possesses significant negotiating power.

The ability of French luxury goods industries to adapt to global markets is another key to their success. Traditionally, the US, Japan and Europe are the leading markets for French know-how. Yet new centres for the consumption of deluxe goods have emerged as a result of global economic shifts. China has become the second biggest consumer of luxury goods, behind the US but ahead of Japan. The visionary strategy of French luxury firms has enabled them to capture new market shares worldwide. The Comité Colbert has published spectacular statistics: today, 12 per cent of the revenue of French luxury firms comes from the Chinese market. In 2012, despite existing tariff barriers, they posted a 15 per cent increase in Brazil and a 20 per cent increase in India.

The future for the French luxury goods market is glittering. According to Euromonitor, in the next five years, the French luxury goods market is expected to register a similar performance compared to that of the previous five years. That means an annual growth of between 2.3 and 4.1 per cent until 2018. Made in France will continue to represent a seal of quality in luxury. Moreover, the French luxury goods market will always have Paris, the most beautiful showcase in the world.

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