Introduction
Baccarat is a well-known company focused on producing cosmetics, fragrances, and crystalware goods. However, while being a reputable firm, its sector is highly competitive. The luxury goods industry is known for challenges associated with entry, rivalry, and disruptive nature. As a result, even though Baccarat has been conducting business in the given industry for several hundred years, it is essential to consider the market trends and existing and potential competitors. In the case of Baccarat, industry analysis can help illustrate how differentiation and focus on sustainable practices can help it shield itself against the growing competition and reinforce its unique brand presence.
Luxury Goods Industry
Growth Trend
Before delving deeper into the existing and potential rivals of the mentioned company, it is necessary to consider the industry’s overall image. According to the 2022 report of a reputable consulting firm, Deloitte (2022), in the fiscal year 2021, the top 100 luxury goods companies worldwide produced individual luxury product revenues of US$305 billion. In comparison, in the 2020 fiscal year, it was $252 billion, and $281 billion in the fiscal year 2019 (before the COVID-19 pandemic’s effects) (Deloitte, 2022). This shows how fast the given industry grows, which might indicate the increasing competition for the target audience and the requirement for firms to strengthen their competitive edges.
Sustainability Trend
Another trend seen in the industry is a focus on sustainable and environmentally conscious approaches. Luxury goods firms are currently dealing with new prospects due to environmental protection and advancements toward a circular economic model as they rebound from the adverse effects of the COVID-19 epidemic (Deloitte, 2022). More companies are incorporating sustainable practices, such as packaging, ingredients, and others, to broaden the market and attract investors. This creates a lot of optimism in the luxury market and offers unrivaled chances for businesses to be inventive and disruptive, along with the ongoing technological advancement of the metaverse.
Main Competitors
LVMH
Moving from the industry overview, it is essential to consider Baccarat’s major competitors out of the leading firms. The first and biggest competitor of Baccarat is LVMH Moët Hennessy Louis Vuitton, or, more specifically, its brand, Tiffany & Co. Tiffany & Co. is among the most renowned luxury design firms worldwide and is known for its cutting-edge jewelry designs, exceptional workmanship, and unmatched innovation. Regarding financials, LVMH individual luxury goods sales increased by over 55% year over year to around US$55 billion, ranking sixth among the Top 100 firms in terms of year-over-year growth (Deloitte, 2022). This was partially because Tiffany & Co., which was acquired in 2021, delivered a record-breaking accomplishment in the areas of revenue, profitability, and cash flow (Deloitte, 2022). As a result, the given brand is a significant competitor to Baccarat due to its financial strength and share of the market.
Tiffany & Co.
However, Tiffany & Co. is additionally a strong firm due to its practices, which are praised by investors and customers. The company has dedicated more than 25 years to conducting business ethically, protecting the environment, and having a good influence on the communities where it conducts business (LVMH, n.d.). The Diamond Craft Journey, an innovation for the diamond trading community, was introduced by Tiffany & Co. in 2020 (LVMH, n.d.). This makes it the first luxury jewelry brand in the world to identify the area or nations where its newly procured, uniquely registered gems are made, which makes it a disruptive and environmentally-conscious company.
Swarovski
Swarovski is another strong competitor of Baccarat and one of the leading companies in the industry. Founded in Austria in the 19th century, Swarovski creates, produces, and sells premium crystals, real gemstones, artificial stones, and completed goods, including jewelry, accessories, and illumination (Swarovski, n.d.). The business has a global presence with over 27,000 workers, 2,800 locations spread over 170 nations, and 2016 sales of nearly 2.6 billion euros (Swarovski, n.d.). Its size, product diversification, and firm brand name contribute to its competitive advantages.
Lalique
The following company, Lalique, is an internationally recognized French glass company. Lalique is renowned for creating glass art, such as fragrance bottles, vase decorations, and hood ornaments (Lalique, n.d.). Since the origin of its operations in the 19th century, it has become a reputable and large capital firm (Lalique, n.d.). For instance, the company has grown from $141 million in 2021 to $167 million in 2022 (Lalique, 2022). Lalique Decorative Items account for 27% of the organization’s revenue (Lalique, 2022). Organic growth and demand for Lalique’s products make it a strong competitor to Baccarat.
Waterford
Lastly, Waterford is a prominent player in the luxury goods industry, creating exquisite, hand-cut crystal glasses, barware, and home décor items of unmatched brightness and clarity. Its leading competitive edge is based on using equipment and methods that have been passed down through generations (Waterford, n.d.). The company’s renowned collections of crystal vessels, plates, cups, and wine glasses are inspired by the proud Irish ancestry and capture the beauty of the Emerald Isle’s towns, castles, and landscapes (Waterford, n.d.). Therefore, it can be seen that building a customer base and unique approaches is essential to maintaining market share.
Potential Competitors
Although market entry in the luxury goods industry is challenging, some companies can continue diversifying their product portfolio. In 2023, the market for luxury goods will generate US$354.80 billion in revenue (Statista, 2022). In addition, the market is anticipated to expand by 3.38% yearly (Statista, 2022). Therefore, Baccarat must consider potential competitors when developing new strategies.
Hermès
The first potential competitor is a French luxury design company, Hermès. It focuses on leather products, fashion accessories, home decor, jewelry, and watches (Hermès, n.d.). At constant currency rates, revenues from the company’s network of stores climbed by 44%. In contrast, wholesale revenue rose by 24%, owing to strong expansion in the year’s final quarter (+21%) and in Asia and Japan (Deloitte 2022).
Gucci
The second competitor among the top luxury brands worldwide is Gucci. It continues reinventing luxury after the House’s 100th anniversary while championing creativity, Italian artistry, and development (Gucci, n.d.). Gucci is a member of the famous Houses in fashion, leather products, jewelry, and eyewear managed by the international luxury conglomerate Kering (Gucci, n.d.). Thus, competition in the luxury goods industry is strong, with many leading companies incorporating new strategies and kinds of goods.
Conclusion
Hence, industry analysis may demonstrate how distinctiveness and a focus on sustainable practices can help Baccarat protect itself from escalating competition and strengthen the prominence of its distinctive brand. The luxury goods sector is expanding quickly, indicating increased rivalry for the target market and a need for businesses to sharpen their competitive advantages. To draw in more clients and investors, many businesses in this sector are now attempting to adopt more sustainable practices. Tiffany & Co., Swarovski, Lalique, and Waterford are among the top rivals. Hermes and Gucci are two prospective rivals, given the industry’s expansion and anticipated rise in sales.
References
Deloitte. (2022). Global powers of luxury goods 2022. Web.
Gucci. (n.d.). About Gucci. Web.
Hermès. (n.d.). Six generations of artisans. Web.
LVMH. (n.d.). Tiffany & Co. Web.
Lalique. (n.d.). Lalique timeline. Web.
Lalique. (2022). LLQ annual report 2022. Web.
Statista. (2022). Luxury goods. Web.
Swarovski. (n.d.). About Swarovski. Web.
Waterford. (n.d.). All collections. Web.