HERMES SILK PRODUCTS MARKET Challenges and Opportunities

One of the key challenges currently faced by the global Hermes silk products market is the high cost of silk materials which is negatively impacting the affordability of Hermes silk products. Silk being a premium natural fiber, the costs associated with procuring high-quality silk is significantly high. With silk production being a labor-intensive process, the costs of silk fiber production have substantially increased over the past few years. Added to this are the rising costs of transportation and supply chain disruptions post the pandemic which have further inflated the silk procurement prices. With inflation continuing to surge across many economies, customers now have less purchasing power and discretionary spending on luxury items is reducing. Hermes silk products catering to the high-end luxury segment are priced at a premium owing to the use of the finest quality silk.

Market Opportunity - Expansion of e-commerce platforms for luxury goods

One of the key opportunities for the global Hermes silk products market is the expansion of e-commerce platforms for luxury goods. Over the past few years, there has been tremendous growth in online shopping, especially for luxury and premium brands. High-income customers who earlier would visit luxury stores to buy high-end products are now increasingly comfortable making such expensive purchases online. Leading luxury brands like Hermes saw their online sales jump exponentially during the pandemic as people avoided visiting stores. This points towards a shift in customer shopping behavior. To tap into this growing online luxury customer segment, Hermes can look at strengthening its digital presence by investing more in its own exclusive e-commerce platforms and marketplaces. It can also consider selling through third-party luxury e-tailers.