Luxury Goods Market in Poland 2013

KPMG IN POLAND
Luxury goods
market in Poland
Edition 2013
kpmg.pl
2 | Section or Brochure name
1 Foreword
2 Key Findings
3 Buyers of luxury goods in Poland and their financial situation

3.1 The number of potential purchasers and their income
3.2 Assets owned by Poles
3.3 Assets owned by Poles in comparison with other European countries
7
7
10
11
4 Availability of global luxury brands in Poland
15
5 Perception of the Polish luxury goods market by companies

5.1 About the survey
5.2 Situation on the Polish luxury goods market
5.3 Purchasers of luxury goods
5.4 Barriers to growth of businesses
19
19
20
22
24
6 Expenditure on luxury goods
27
7 Segments of the luxury goods market

7.1 Cars
7.2 Clothing and accessories
7.3 Hotel services, spa resorts and travels
7.4 Real estate
7.5 Alcohol and stimulants
7.6 Jewelry and timepieces
7.7 Perfume and cosmetics
7.8 Yachts
7.9 Interior design, electronics and stationery articles
31
32
36
39
42
46
48
50
52
55
8 Global success of Polish brands
59
9 Research methodology
63
Acknowledgments
64
2013 KPMG Sp. z o.o. is a Polish limited liability company and a member firm of the KPMG network of independent member firms affiliated
withInternational Cooperative (KPMG International), a Swiss entity. All rights reserved.
Table of contents
Luxury goods market in Poland Edition 2013 | 3
Foreword
We are extremely glad to present the fourth edition of our report devoted to the market
of luxury goods in Poland. Considering the very high interest drawn by our previous
publications, we decided to provide more in-depth analysis.
The main theme of this years report was a study conducted among manufacturers
and distributors of luxury goods operating within all key segments of that market
inPoland. The high quality of answers enabled us to present a picture of the singularities
of the entire market of luxury goods and, moreover, of its specific segments (clothes,
cosmetics, jewelry, cars, yachts, furniture, electronics, hotels). Our survey covered
issues such as customer profile, trends, problems and growth forecasts for the
coming years.
This years report clearly demonstrates that the Polish market of luxury goods
andservices still experiences growth. Companies selling luxury goods and services
favorably view their standing and see their future in bright colors. This should not come
as a surprise since the total number of rich and wealthy Poles has increased year after
year, thus the number of potential customers has been expanding. The majority of key
luxury brands are already present on the Polish market, with new players still arriving.
We increasingly observe daring actions of Polish owners of luxury brands, notonly
onthe domestic arena but also on international markets.
We would like to express our sincere thanks to all organizations, companies
andindividuals who actively participated in the survey, thus supporting the preparation
of this years edition of the report. We hope that this document will provide you with
further interesting insights into this promising market.
Andrzej Marczak
Partner, KPMG in Poland
Tomasz Winiewski
Key Findings
The value of the luxury goods market

amounted to PLN 10.8 billion in 2013.
The number of the wealthiest Poles is

estimated at nearly 45 thousand.
According to our estimates, the value of the

luxury goods market in Poland amounted to
PLN 10.8 billion in 2013, which represents
growth by as much as 5.9% in comparison
with the previous year. Based on the
forecasts formulated by our respondents,
we foresee that the value of the market
will increase by 20% to PLN 12.9 billion
by 2016. The fastest growth will be
experienced by luxury real estate (by 29%)
as well as hotel and SPA services (by 28%).
The wealthiest individuals (HNWI high net

worth individuals) are traditionally defined
as those who own liquid assets exceeding
USD 1 million. Based on the 2013 Global
Wealth Databook data published by Credit
Suisse, in 2013 there were almost 45
thousand people in Poland who could be
classified into the HNWI segment. The
individual assets owned by most of them
(89%) are estimated at USD 1 to 5 million.
Two hundred Poles own assets with a total
value exceeding USD 50 million.
Luxury and premium vehicles represent

the largest segment of the luxury goods
market in Poland.
Luxurious and premium vehicles are the
largest of the analyzed categories, with an
estimated value of PLN 4.5 billion. Luxury
clothes and accessories are the second
largest segment, with a value of PLN 1.8
billion. Further positions are occupied by
hotel and SPA services PLN 1.2 billion,
luxury real estate PLN 900 million, luxury
alcohol and cigars PLN 714 million, and
furniture PLN 580 million.
The number of rich and wealthy
consumers has been rising.
In 2013, Poland had 786 thousand rich
and wealthy individuals, i.e. those with
an annual gross income exceeding PLN
85 thousand. Their total net income was
estimated at PLN 130.9 billion.
As much as 69% of global luxury

brands are already available in Poland,
with most of them coming from Italy
andFrance.
Luxury brands have expanded their
presence in Poland in recent years, yet the
growth rate has been weakening due to
the gradual market saturation. After the
entry of Louis Vuitton, Maserati and Rolls
Royce, Polish consumers already have
access to 69% of key global luxury brands.
The largest group of brands come from
Italy (22%) and France (17%). As regards
the market structure by origin, considerable
shares are also held by Swiss, American,
English and German brands.
Positive growth prospects.

The survey respondents are optimistic
about the future: 94% of them believe that
the number of their clients will rise within
the next three years, whilst 68% believe
that transaction value will also rise.
Quality is the key factor taken into
consideration by buyers of luxury goods
and services.
In the opinion of the surveyed companies
selling luxury goods and services, their
customers pay most attention to high
quality (80%). Other important factors
include appearance and aesthetic aspects
(58%) and the prestige of the brand (54%).
Nearly one in two companies (46%) believe
that their customers seek unique goods
and services.
Three quarters of all surveyed
companies report barriers which limit
the growth of their business in Poland.
A considerable majority (75%)
ofcompanies operating on the Polish
market of luxurious goods claim that
they experience barriers limiting their
further growth. The greatest problem
lies in the insufficient number of buyers
with the right level of income as well as
fluctuating forex rates. These barriers have
a significant impact on the business of 66%
of therespondents. Nearly every other
company also experiences problems with
legal, tax-related and administrative barriers
and the high costs of adequate commercial
premises.
Buyers of luxury goods

in Poland and their
financial situation
3.1 The number
of potential
purchasers and
their income
Low GDP growth, stagnation
of real pay levels, and growing
unemployment these developments,
which affect the whole economy, have
little influence on the financial status
of rich and affluent Poles. In 2013, the
aforementioned group expanded and
its total net income rose again, as it
did in previous years. The richest Poles
(HNWI) have the highest importance
for the market of luxury goods, their
number estimated at 45 thousand.
In 2013, Poland had 768 thousand
residents who could be described as
wealthy or rich, i.e. with an annual gross
income exceeding PLN 85 thousand.
We estimate that their total net income
amounted to PLN 126.8 billion this year.
In comparison with 2011, there has
been an increase in the number of
rich and affluent Poles in hired work
(i.e.paying taxes in accordance with the
general tax scale) and in their income
levels. On the other hand, the situation
looked considerably worse among
entrepreneurs and self-employed
individuals. The number of such
individuals had not changed yet their
income shrank. There was also a decline
in taxpayers income earned from the
sales of securities or derivative financial
instruments.
Even though 2013 saw no economic

rebounding, this should not have any
significant effect on the number of rich
and affluent individuals or their income.
In the worst case scenario, the growth
will be slower than in 2012. We estimate
that the group of rich or affluent Poles
will increase by 18 thousand (up to 786
thousand) throughout 2013, and their
net income will rise to PLN 130.9 billion.
Itis likely that the growth rate will pick
up after 2013. In 2016, Poland might have
as many as 1 million rich and affluent
residents, with a total net income
reaching PLN 172 billion.
8 | Luxury goods market in Poland Edition 2013
Number of rich and affluent individuals in Poland (expressed in thousands)
2016
963 k
2013
786 k
232
342
2008
191
387
2009
197
464
2010
214
522
214
554
218
568
227
601
239
649
251
Taxpayers paying taxes in accordance
with the tax scale (second band annual gross
income exceeding PLN 85 thousand)
712
Taxpayers generating income over

PLN 85 thousand who pay a at-rate tax of 19%
2011
2012
2013 (p) 2014 (p) 2015 (p) 2016 (p)
A rich or an affluent person is defined as a person with a monthly gross income exceeding PLN 7.1 thousand
Source: KPMG in Poland analysis and forecasts based on the Ministry of Finance data; (p) forecast
2016
PLN 171.6
billion
2013
PLN 130.9
billion
4,7
3,4
58,5
52,5
35,3
2008
5,1
54,9
45,7
50,6
2009
2010
4,0
3,2
3,3
61,9
59,5
60,5
56,6
2011
64,2
2012
67,1
3,8
3,4
64,3
73,0
3,6
75,9
69,5
81,0
91,9
2013 (p) 2014 (p) 2015 (p) 2016 (p)
A rich or an affluent person is defined as a person with a monthly gross income exceeding PLN 7.1 thousand
Source: KPMG in Poland analysis and forecasts based on the Ministry of Finance data; (p) - forecast
Taxpayers paying taxes in accordance

with the tax scale (second band annual gross
income exceeding PLN 85 thousand)
Taxpayers generating income over PLN 85 thousand
who pay a at-rate tax of 19%
Net income of rich and afuent individuals
generated from sale of securities or derivative
nancial instruments
Total annual net income of rich and affluent individuals in Poland (in PLN billion)
According to the 2013 Global Wealth

Report Databook, published by Credit
Suisse, there are 45 thousand Polish
residents who may be classified as
HNWI. In comparison with Western
Europe, the total number of HNWI
inPoland is not high. For instance,
there are 2.2 million of such individuals
in France, 1.7 million in Germany,
and 1.5 million in the UK. The total
number HNWI in Poland is comparable
to countries such as Portugal
(65thousand), Finland (66 thousand)
orthe Czech Republic (28 thousand),
i.e.much less populated countries.
The individual assets held by the
majority (39.7 thousand) of Polish HNWI
are estimated at USD 1 to 5 million.
Only a very small group has significantly
greater assets.
However, potential consumers of luxury
goods are not only the HNWI, and even
not only rich and affluent citizens. Apart
from them, Poland has a large group of
people aspiring to wealth, with
higher-than-average income (PLN 3.77.1
a month gross) which allow them to
make occasional purchases of luxury
goods of smaller value. Based on our
estimates, in 2013 there were slightly
more than 2 million of such Poles, with
their total annual income amounting to
about PLN 97 billion. The total number
of such citizens as well as their income
will most likely grow more slowly than
in comparison with the group of rich and
affluent individuals, yet growth could
also be expected within this group.
Number of HNWI in Poland by wealth (2013)

USD 1-5 million
39 737
USD 5-0 million
3 000
USD 10-50 million
1 677
USD 50-100 million
127
above USD 100 million
79
Total HNWI
44 620
Total number of HNWI individuals in selected European countries

(in PLN thousand, 2013)
France
2 211
Germany
1 735
UK
1 529
Italy
1 449
Switzerland
610
Sweden
506
Spain
402
Netherlands
285
Norway
279
Belgium
269
Denmark
238
Austria
206
Russia
84
Ireland
77
Greece
75
Finland
66
Portugal
65
Poland
45
Czech Republic
28
10.2
million
Total number of HNWI individuals in Europe
0.4%
Polands share in HNWI individuals in Europe
HNWI (high net worth individuals) individuals with net assets exceeding USD 1 million
Source: Analysis by KPMG in Poland based on data provided by Credit Suisse
Rich and affluent individuals constitute

the major target group for companies
operating on the luxury goods market.
However, the HNWI group (high net
worth individuals), i.e. the richest
consumers, play the key role there.
The traditionally adopted classification
criterion in the case of this group is the
possession of liquid assets exceeding
USD 1 million in worth (for instance,
cash, stocks and shares etc.).
3.2 Assets owned by

Poles
Poles own a growing number of
investments and savings. At the end
of the first quarter of 2013, households
owned financial assets totaling PLN 1.4
trillion. This represents a 7.3% increase
in comparison to the previous year and
over a half more (55.7%) versus the peak
of the crisis (the first quarter of 2009).
The value of the non-financial property
held by Poles (mainly in real estate)
isestimated at over PLN 1.7 trillion.
securities fell considerably in the course of

the last year (by 4.5%, to PLN 263 billion).
Deposits represent the greatest portion of

financial assets held by Poles, their value
amounting to PLN 544 billion. Along with
cash assets, in the first quarter of the year
Poles had PLN 645 billion worth of liquid
financial assets. That value increased by
9.2% in the course of the last year.
There has been a very slight increase in the
value of investment assets held by Polish
households (by 1.1%). While the value of
shares in investment funds has been on the
rise (up to PLN 89 billion, a 22% increase
yoy), the value of shares, equities and debt
The least liquid assets represent the third

key group of financial assets held by Poles
comprising insurance and OFE units (OFE
open-end pension funds), with a total
value of PLN 378 billion. This category
recorded the most significant growth
(11.1%) during the past year, mostly as
aresult of the growing value of OFE funds.
Assets held by Polish households (in PLN billion)

Total value of nancial assets (Q1 2013)
1 600
1 400
Other
PLN 1 409 billion
PLN 34 billion
1 200
Insurance and OFE funds
800
Investments
PLN 352 billion

600
400
200
Cash and deposits
PLN 645 billion
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008
2009
2010
2011
2012
2013
PLN 1 721 billion
The estimated value of non-financial shares owned by Poles,

in accordance with Credit Suisse data (mid-2013)
PLN 576 billion
The total value of financial liabilities (Q1 2013)
57.8%
The share of financial liabilities versus total cash,

deposits and financial investments
The presented data cover households and non-commercial institution operating for the benefit of households (data for the current quarter, in PLN billion). Investments: debt
securities, shares and equities, shares in mutual funds. Insurance and OFE: net shares in reserves of life insurance and pension pension funds, down payments of insurance
premiums as well as reserves for unsettled claims.
Source: Analysis by KPMG in Poland based on NBP and Credit Suisse data
PLN 378 billion
1 000
Despite a systematic growth of income,

Polish consumers are still significantly
less affluent than consumers from
Western Europe, or even from some
Central and Eastern European
countries.
According to Credit Suisse estimates,
theassets held by an average Pole in
mid-2013 (financial and non-financial
assets less liabilities) were worth USD
20.8 thousand. Those assets have been
increasing rapidly. In 2008 it was USD 17.3
thousand whereas in 2000 it amounted to
as little as USD 6.4 thousand.
Considering the value of assets owned
by an average resident, the situation
inPoland is comparable to that in countries
such as Slovakia or Croatia (USD 21.6

thousand each), Hungary (USD 22.7
thousand) or Latvia (USD 19.6 thousand).
This places Polish consumers towards the
end of affluence scale in Europe. Poles are
significantly outperformed by the Czech
Republic (USD 36.2 thousand) and by even
least affluent countries of Western Europe
such as Spain (USD 99.2 thousand),
Greece (USD 83.4 thousand) or Portugal
(USD 71.2 thousand). A comparison with
consumers from the strongest economies
of Europe leaves no illusion as towhether
Poles can catch up with them in the near
future. An average German holds assets
which are eight times greater than the
value of assets held by an average Pole.
An average UK citizen holds nine times
more and an average French person owns
as many as eleven times more assets.
Moreover, a number of Western European
countries generate their wealth at a rate
which is comparable or faster than that
ofPoland.
An inhabitant of the European Union holds, on average, USD 138.6 thousand worth of assets. A Polish citizen
with an average asset value of USD 20.8 thousand occupies the 24th position among EU member states.
Alower value of assets was recorded only in Lithuania, Latvia, Romania and Bulgaria. Poles increase their assets
atamuch faster rate than the EU average, which is 4.1% per annum. If this rate were maintained, Poland would need
nearly 50 years to catch up with the current EU average in terms of the value of assets held.
Andrzej Marczak
3.3 Assets owned by

Poles in comparison
with other European
countries
High degree
of afuence
Assets per capita (in USD thousand)
Affluence of societies in selected European countries (mid- 2013)
300
A rapid decrease
250
High degree
of afuence
NO
A rapid increase
LU
SE
FR
200
BE
IT
DK
GB
-15,0%
-10,0%
150
0,0%
-5,0%
IE
ES
5,0%
NL
10,0%
15,0%
FI
100
GR
PT
SI
HR
Low degree
of afuence
A rapid decrease
50
HU
LT
BG
RO
UA
The size of the circle reflects the total value of assets

Source: analysis and calculations prepared by KPMG in Poland based on Credit Suisse data
CZ
PL
RU
SK
LV
Low degree
of afuence
A rapid increase
IS
An yearly average change in the value

of assets (CAGR 2008 mid-2013)
AT
DE
14 | Section
Luxury goods
or Brochure
marketname
in Poland Edition 2013
Availability of global
luxury brands in Poland
For several years now, the interest
of global luxury brands in Poland
has been visibly growing. However,
the number of new foreign brands
entering Poland has been rising more
slowly than in previous years, which
reflects the gradual saturation of the
market.
As in the previous editions of this report,
we have examined the share of global
luxury brands available in mono-brand
and multi-brand outlets in Poland (over
200 subjectively selected global luxury
brands from various market segments
were included). The analysis does
not cover online only brands the
widespread access to the Internet
eliminates physical barriers and results
innear 100% availability.
Since 2009, there has been a noticeable

and steady expansion of the presence
of luxury brands in Poland. In 2013,
when three new players entered the
Polish market, the overall availability of
luxury brands reached 69%. It is worth
stressing that the growth dynamic of
luxury brands presence has dwindled:
in comparison with last years report,
growth by only 1 percentage point
was recorded, which indicates gradual
saturation of the Polish market of luxury
goods. The number of brands available
inPoland is expected to rise further but
the pace is likely to be rather slow.
Presence of luxury brands in Poland
47%
39%
61%
32%
31%
68%
69%
2012
2013
53%
2009
2010
Available brands
More than 200 key global luxury brands were included

Source: Own analysis by KPMG in Poland
Unavailable brands
The opening of a Louis Vuitton

showroom in the vitkAc fashion house
in Warsaw was the most commented
event of 2013. As a result, the availability
of luxury brands in the segment of
clothing, footwear, bags and perfume
climbed to 64% (a 1-point growth).
A more significant increase in the
presence of luxury brands was noted
inthe automotive segment. In December
2012, a Maserati showroom was opened,
and in spring 2013 Rolls-Royce signed
anauthorization agreement with
aPolish dealer.
Thus, the automotive sector recorded

the largest rise in the presence of
luxury brands.
Although no significant changes were
observed in the segment of alcohols and
stimulants, this segment has the highest
presence of luxury brands, reaching 88%.
Multi-brand outlets are still more popular
in Poland than mono-brand ones. Only
30% of manufacturers and distributors
of all luxury goods available on the
Polish market opt for a mono-brand
outlet, which indicates a growth by
1percentage point versus last year.

The sector of luxury vehicles is the one
that displays the highest popularity of
mono-brand showrooms, and there
is a growing number of mono-brand
boutiques offering clothing, footwear,
bags and perfumes. A different approach
is observed in the segment of watches
and jewelry (89% of labels available
in multi-brand outlets) or alcohol and
stimulants which may only be purchased
from multi-brand stores.
Presence of luxury brands in Poland, by segment
88%
Consumer electronics
86%
Cars
80%
Accessories
75%
Timepieces and jewelry
69%
Clothing, footwear, bags and perfumes

Hotels and other services
20%
25%
31%
66%
34%
69%
Available brands
14%
36%
64%
Total
12%
Unavailable brands
31%
Alcohols and exclusive stimulants
Since the last edition of our report,

the structure of brands by origin has
undergone only minor changes. Much
as before, the highest share is held
by Italian brands (22%) followed by
French ones (17%), and then Swiss
andAmerican ones (14% each).
Origin of luxury brands available in Poland
16%
22%
8%
9%
17%
14%
14%
Italy
France
Switzerland
USA
UK
Germany
Other
Italys strong position on the international market is attributable to automotive brands (Maserati, Ferrari)
and clothing labels (Dolce&Gabbana, Prada, Gucci). As for French brands, clothing labels play a major role
(Louis Vuitton) and so do perfume brands (Chanel, Dior, YSL) and alcohol brands (Mot&Chandon and Dom Prignon
champagnes, Hennessy cognac).
Tomasz Winiewski,
18 | Section
Luxury goods
or Brochure
marketname
Perception of the
Polish luxury goods
market by companies
5.1 About the
survey
In order to explore the current status,
the functioning and prospects of
the Polish luxury goods market,
we decided to conduct a survey on
arepresentative sample of companies
operating on the Polish market.
The survey covered Polish branches
of international corporations, official
distributors, independent retailers as well
as Polish owners of luxury brands.
The respondents were top managers:

owners, management board members,
managers and executives. The study
was based on questionnaires and
face-to-face interviews, and was carried
out in September 2013. A total of 59
companies were surveyed, submitting
71 questionnaires assessing the situation
intheir respective segments.
Companies were asked to assess
thesituation on the Polish luxury goods
market, shopping habits of Polish
consumers as well as growth prospects
of the market in general and of their
respective segment.
Survey responses by market segment
14%
15%
10%
10%
9%
11%
11%
11%
9%
Clothing, footwear,
bags and accessories
Cars
Perfumes and cosmetics
Timepieces and jewelry
Yachts
Real property
Alcohols and cigars
Luxury services
Other
Source: KPMG in Poland survey
5.2 Situation on
the Polish luxury
goods market
Very good
Good
25%
Neither good nor bad
50%
Bad
23%
Very bad
2%
0%
Assessment of the current situation on the Polish luxury goods market

in 2013 compared to 2012
7%
51%
30%
Signicant improvement
Improvement
No change
Decline
12%
Signicant decline
Assessment of the current situation on the Polish luxury goods market
56%
3%
Very good
Good
25%
Neither good nor bad
Bad
16%
Very bad
Anticipated change of the situation on the Polish luxury goods market

in2014 compared to 2013
80%
7%
Signicant improvement
Improvement
No change
Decline
Signicant decline
12%
1%
The majority of companies selling

luxury goods in Poland express
positive opinions about the
situation in their sector of operation.
Therespondents are also optimistic
about the future: they predict that the
value of luxury goods sales in Poland
will increase, on average, by as much
as 20% in the next three years.
Our survey has revealed that three
quarters of the respondents perceive
the condition of their companies as
good. Only 2% assessed it as bad and
no company claimed to be in a very bad
situation.
However, the market itself is viewed
somewhat less optimistically. Most
companies (56%) describe the situation
on the Polish market of luxury goods and
services as good but only 3% assess it
as very good. Importantly, none of the
respondents perceived the situation as
very bad.
The survey responses provided by
companies clearly indicate that the
condition of the Polish luxury goods
market is getting better year after year.
Six out of ten companies claim that
the market situation improved in 2013.
Moreover, future prospects seem to
be very optimistic. As many as as 87%
of the companies expect 2014 to be
abetter year for the Polish luxury goods
market than 2013.
Assessment of the companys current situation
Perceived availability of major global luxury brands
9%
22%
14%
The survey respondents were also

asked to assess the availability of global
luxury brands in their segment of the
Polish market. More than half of the
respondents described the availability as
very good or good. However, it must be
stressed that one in four respondents
claimed otherwise, saying that Polish
consumers had limited or very limited
access to global luxury brands in Poland.
20%
35%
Very good
Good
Average
Poor
Very poor
5.3 Purchasers
ofluxury goods
Number of customers on the luxury goods market

Next three years
18%
26%
59%
68%
12%
6%
Signicant growth
Growth
No change
Decline
Signicant decline
11%
0%
0%
0%
Individual expenses of customers on the luxury goods market
Next three years
6%
3%
63%
65%
21%
29%
Three quarters of the surveyed

companies claim that the number
oftheir customers has grown in the last
three years. Only 11% indicated that
the number of buyers of their goods and
services has declined.
During the next three years, the group of
customers is likely to grow more rapidly.
As many as 94% of the respondents
expect to have more customers, with
26% forecasting a significant growth.
Notably, none of the respondents
predicted a decline in the number
ofbuyers.
Last three years
The group of purchasers of luxury

goods and services in Poland
isgrowing and this trend will hold
infuture.
Signicant growth
The number of customers is growing

along with the increase in their individual
expenses (transaction size): this was the
opinion of 69% of the respondents. Only
one in ten companies thinks that those
expenses have shrunk.
According to companies forecasts
(nearly 70% of the respondents),
clients individual (per transaction)
expenses will continue to grow. Only
3% of the companies anticipate
adecrease in this area.
Growth
No change
Decline
Signicant decline
10%
3%
0%
0%
Luxury goods are not

meant to satisfy basic
needs: such products are meant
tohighlight a persons status or are
regarded as a hobby for affluent
people.
Patryk Uznaski, owner,
GLOBAL COMPANY GROUP,
retailer of yachts and luxury furniture
Last three years
Key factors taken into consideration by buyers of luxury goods
Quality
80%
Appearance, design, beauty
58%
Brand prestige
54%
Uniqueness/exceptionality
46%
Brand recognition
28%
Opinions and recommendations
27%
Price
Values represented by the brand
Promotion by celebrities
Other
24%
20%
20%
7%
Opinions expressed by companies turned

out to be partly consistent with the
feedback provided by rich and affluent
consumers surveyed in the last years
edition of our report. The majority of them
(85%) regarded high quality of luxury
goods as the essential purchase driver.
The second most important factor was
related to opinions and recommendations
(26%) and values represented
by the brand (25%).
7%
The Polish market is growing

ready for luxury goods.
Itspotential is considerably greater
than that of Western Europe.
Francis Lapp,
President and founder, Sunreef Yachts
Brand tradition/history
We asked the surveyed companies about

elements which are particularly important
to those who buy their products. Thevast
majority of the respondents said their
customers mostly considered the quality
of purchased goods and services (80%).
More than half of the respondents also
claimed that their customers attach
importance to appearance, design and
aesthetic aspects of products (68%) as
well as the brand prestige (54%). Nearly
half of the respondents emphasized the
significance of uniqueness of products
and services.
5.4 Barriers to
business growth
75%
25%
Barriers constraining growth of business in Poland
Forex rates
66%
56%
Legal/tax-related/administrative barriers
Difculties in obtaining
external nancing
49%
34%
Intellectual property infringements

(counterfeit goods)
32%
Difcult cooperation with

owners of brands sold
10%
Insufcient group of adequately

afuent individuals
Inadequate interest in luxury goods

among afuent consumers
66%
34%
Customers
Poor awareness of luxury brands
Business environment
Strong market competition
24%
41%
High labor cost
39%
Staff
No properly qualied personnel
Poor availability of high-quality

retail premises/locations
Other
46%
29%
Real property
Signicant cost of high-quality

retail premises/locations
7%
The presented feedback was provided by companies which reported barriers constraining their business in Poland
Despite the optimism as regard the

current condition and prospects
ofthe Polish luxury goods market,
the majority of companies experience
barriers that constrain the growth of
their business.
An insufficient number of individuals
with the right level of income is the most
commonly mentioned reason (66%).
Interestingly, low interest in luxury
goods among affluent individuals or poor
awareness of luxury brands are indicated
rarely by the respondents (24% and 34%
respectively).
The risk related to fluctuating foreign
exchange rates is considered to be
amajor barrier to growth (66%). Strong
competition on the market is another
problem (56%).
Another factor of importance is the impact
of the legal environment: nearly half of the
surveyed companies (49%) experience
severe impact of legal, tax-related or
administrative barriers. Infringements of
intellectual property (counterfeit goods)
are not uncommon either, with negative
consequences affecting one in three
companies operating on the Polish luxury
goods market.
Location of outlets is a serious factor
having an adverse effect on business
growth. The problems does not lie as
much in the availability of premises (29%)
as in the costs of quality locations (49%).
Four in ten companies are struggling
with staff issues, in terms of the quality
of the available staff and the overly high
labor costs (as seen by the surveyed
companies).
Barriers constraining growth of business in Poland
26 | Section
Luxury goods
or Brochure
marketname
Expenditure
on luxury goods
In 2013, the value of the luxury goods
market in Poland increased by 5.9%,
reaching an estimated level of PLN
10.8 billion. This sum comprises luxury
consumer goods (clothing, accessories,
alcohols, cigars, jewelry and timepieces,
cosmetics and perfume, consumer
electronics, stationery goods), premiumclass and luxury cars, deluxe real estate
(apartments and residencies), yachts,
hotel and spa services as well as
furniture and interior decor.
The segment of premium-class
and luxury cars is largest of the
aforementioned categories (ca. PLN
4.5 billion in 2013). Luxury clothing and
accessories is another very important
segment, with total sales reaching
PLN1.8 billion.
This is followed by hotel and spa services

(PLN 1.2 billion), real property (PLN900
million), alcohols (PLN 684 million)
andfurniture (PLN 580 million).
The forecasts of market participants
surveyed by KPMG as well as
Euromonitor International data indicate
that the value of the Polish luxury goods
market will reach nearly PLN 12.9 billion
in 2016. This will represent a 20% growth
versus 2013. The most significant growth
figures are to be expected inhotel
and spa services (28%), real estate
(29%) and furniture (25%). A dynamic
growth rate will also be observed in the
segments of premium-class and luxury
cars (17% growth), luxury clothing
andaccessories (17%) as well as alcohol
and tobacco products (13%).
Value of the Polish luxury goods market (in PLN billion)

CAGR: +6.0%
CAGR: +13.6%
12.9
10.2
10.8
11.3
12.0
8.9
7.8
5.4
2007
6.0
2008
6.5
2009
2010
2011
2012
2013
2014 (p) 2015 (p) 2016 (p)
Source: KPMG in Poland analysis and forecasts based on data from Euromonitor International, BMI, GUS
(Polands Central Statistical Office) and responses from the surveyed companies; (p) forecast
Value and structure of the luxury goods market in Poland (in PLN million)
PLN 12.9
billion
PLN 10.8
billion
+ 20%
96
165
193
348
487
722
580
+ 25%
805
Luxury stationery articles

Yachts
+ 13%
1 163
714
Cosmetics and perfume
+ 29%
1 534
900
Consumer electronic goods
Jewelry and timepieces

Furniture
+ 28%
1 200
Alcohol and cigars

2 112
+ 17%
Real property
Hotel and spa services
1 811
Designer clothing and accessories

Cars
4 500
2013
+ 17%
5 261
2016 (p)
Source: KPMG in Poland evaluation and forecasts based on data from Euromonitor International, BMI, GUS (Polands Central Statistical Office)
and responses from the surveyed companies; (p) forecast
85
135
161
304
380
According to our survey, the value of the luxury goods market in BRIC countries has experienced
an enormous, 104-per cent growth in the last five years, versus merely 18% in developed countries.
Theexpenditure on luxury goods is growing particularly fast in China, despite the governments efforts to curb
extravagant consumption. At the same time, the weaker yen reinforced demand for premium brands in Japan,
whereas the buyers of luxury goods in Europe and the United States are tempted by new possibilities in the so-called
affordable luxury goods segment.
The Polish market, which is the second largest market in Eastern Europe, offers good prospects for the luxury goods
industry thanks to its stable economic situation, expanding middle class and income growth.
Fflur Roberts,
Head of Luxury Goods, Euromonitor International
Segments of the
luxury goods market
Cars
Designer clothing and accessories
Hotel and spa services
Real property
Alcohols and exclusive stimulants
Jewelry and timepieces
Perfume and cosmetics
Yachts
Interior decor, consumer electronics

andluxury stationery
7.1 Cars
Premium
Segment
Brand
2012
Q1-Q3 2013
Q1-Q3 2013 / Q1-Q3 2012
BMW
5 596
4 526
+12.0%
Mercedes-Benz
4 851
4 149
+12.7%
Audi
5 128
3 928
+2.7%
Volvo
4 639
3 629
+5.4%
Mini
777
569
-3.6%
Lexus
573
517
+22.5%
Porsche
414
328
+4.5%
Jaguar
186
140
-4.8%
Infiniti
187
104
-31.6%
22 351
17 890
+7.7%
11
14
+27.3%
Maserati
14
x7
Bentley
11
13
+44.4%
Aston Martin
+133.3%
Rolls-Royce
Lamborghini
Lotus
Total
33
52
+85.7%
Total
Luxury
Ferrari
Source: KPMG in Poland based on data from PZPM/CEP and respondents forecasts
The market of premium and luxury cars

is among the strongest segments of
the Polish automotive market. Despite
some turbulences in recent years, the
number of registrations of top class
vehicles continues to grow, even with
stagnation experienced on the market
of passenger cars as a whole.
In 2012, there were 22,400 registrations
of cars classified as premium brands.
Sales volumes in the luxury segment are
considerably lower and more volatile, with
only 33 registrations in 2012, that is by21
vehicles fewer than in 2011.
Registrations of new premium and luxury cars
Registrations of new premium class cars (thousand)

CAGR: +5.6%
27.8
CAGR: +8.3%
22.1
19.2
18.5
2008
2009
20.5
22.4
24.0
25.0
26.2
15.0
2007
2010
2011
2012
2013 (p) 2014 (p) 2015 (p) 2016 (p)
Registrations of new luxury class cars (vehicles)
Both segments of the market are

likely toexperience growth in 2013.
The available data for Q1-Q3 of 2013
indicate that the number of registrations
has increased by 7.7% year-on-year.
Thehighest growth (as a percentage)
has been recorded for Lexus, BMW
andMercedes. Astrong rebound isseen
in the luxury segment: the number of
registrations has increased by 86%
compared to first three quarters of
2012. Registrations of Ferrari, Maserati
and Bentley are particularly prominent
(regarding the segment as a whole).
Considering the entire year 2013, one
may expect an increase in registrations
in the premium segment to up to 24,000
premium cars and up to 60 luxury
vehicles. We estimate that the total
sales in both segments will exceed PLN
4.5billion2.
CAGR: +28.6%
90
CAGR: +17.1%
82
54
39
33
31
15
2007
66
13
2008
2009
2010
2011
2012
2013 (p) 2014 (p) 2015 (p) 2016 (p)
Source: KPMG in Poland based on data from PZPM/CEP and respondents forecasts; (p) - forecasts
As the scale of re-exports is hard to assess, it must be assumed that approx. 1015% of registered cars are not, in fact, obtained by Polish consumers.
60
Condition of the segment of premium and luxury cars
of companies express positive opinions about the situation

in this segment
Who are the buyers of premium and luxury cars?
52%
48%
corporate
customers
8%
49%
aged under 35
50%
43%
aged 35-50 years old
aged over 50
of companies claim that the corporate/private customer

ratiowill not change
22%
foreign-based customers
50%
individual
customers
78%
domestic customers
of companies claim that foreign customers spend the same

per transaction as domestic customers
Key issues considered by buyers of premium and luxury cars:
1. Brand prestige
2. Quality
3. Uniqueness
4. Appearance, design, aesthetic value
5. Brand tradition/history
Only the responses from the companies operating in the analyzed segment are presented
Source: KPMG in Poland survey carried out among luxury goods companies
The number of cars per capita,

particularly luxury ones, is still among
the lowest in Europe. However,
the Polish market is important to
companies we represent, mostly
due to its growing potential. We are
the first market in Europe to enjoy
product launches which is the best
proof that global brands are interested
in Poland.
Marcin Dbrowski,
Vice-president of Board/CEO
Jaguar Land Rover Polska, Aston
Martin Warszawa, Lotus Warszawa
63%
The segment of luxury

goods in Poland is still at
anearly stage of development, partly
because the wealthiest social class
is still relatively young. It is not only
about age but, first and foremost,
about the fact that this is not the
old money generation but the first
generation. The second generation
is just entering the game and joining
parents businesses. Thus, one can
hardly invoke consumer behavior
patterns or preferences that are
observable on mature Western
European markets. What happens
very often is that strategies developed
by global companies fail to succeed
on the Polish market given its
characteristics andyoung age.
The majority of our customers are business owners, mainly from Poland, though the foreign ones are
not a rarity. Senior and top executives are not the most prominent group of purchasers and money is not
a decisive issue. While being able to afford top-end vehicles, such CEOs tend to choose a high standard
premium segment car, for a number of reasons. What kind of qualities are sought by our clients? Supreme quality
and design are a priority: customers are extremely demanding in this respect. Also important is personalization and
customization to clients needs. They also give great consideration to the brands prestige, its history and values
itrepresents. Despite our relatively short presence on the Polish market, we observe customers returning to us.
Piotr Jdrach, General Manager,
Bentley Warszawa
Despite its steady growth year after year, the market of premium cars in Poland is still considerably smaller than
that in the countries of Western Europe. We estimate that the number of HNWI (High-Net-Worth Individuals)
will be increasing and the same applies to customers with higher-than-average income levels. The profile of
consumers is undergoing a positive change as well. More and more people begin to appreciate the benefits of a healthy
lifestyle, they are sensitive to latest technologies, they want luxury and comfort without having to give up emotions.
Therefore, we expect a bright future for Lexus, a brand which offers cutting-edge technologies, comfort andexcitement
in hybrid vehicles. Such cars were already manufactured by Toyota before the Facebook and YouTube era. Customers
want something they can trust. Reliability of Lexus hybrid cars has been confirmed on numerous occasions by
independent experts. It boosts interest in the product and its desirability.
Monika Maek, Lexus PR Manager,
Toyota Motor Poland
I am convinced that the obvious upward trend in the segment will be maintained both in the short- and
long-term perspective. It is my strong belief that Infiniti will exceed the average growth rate, not just
because it benefits from the potential attributable to a brand still perceived as a new one, but also due to
abroad range of products and the brands ability to satisfy the needs of redefined luxury, expected by generation X
and Y consumers. New showrooms, opened this year, will also contribute to growth in this segment. We are also
about to expand our network to ensure that our products are close to consumers even in geographical terms.
Wojciech Kordalewski, President,
Infiniti Polska
The segment of premium vehicles is not affected by the fluctuations of the entire sector and we have been
witnessing its steady growth for a long time. Traditionally, the most popular in car types Poland include
SUVs (GLK, ML and GL) as well as the new family of Mercedes compact vehicles (A-class and CLA class).
Thenew S-class was a hit: it was sold out by dealers by August 2013 and wont be available until February 2014. Under
thesecircumstances, the forecasts for the next year seem to be very good.
Ewa abno-Falcka, PR Director,
Mercedes-Benz Polska
7.2 Clothing
andaccessories
Value of the luxury clothing market in Poland (in PLN million)

CAGR: +4.7%
CAGR: +2.5%
1 447
1 436
1 460
1 488
1 532
1 593
1 667
1 748
1 838
1 352
In 2012, the value of the Polish market

ofluxury clothing exceeded PLN 1.5 billion.
The future prospects for the market look
promising and the forecasted average
annual growth for the period of 20132016
will reach 4.7%.
2008
2009
2010
2011
2012
4.4%
of the whole Polish

clothing market
is represented by
luxury clothing
0.3%
is the percentage of total

global sales of luxury
clothing sold in Poland
2013 (p) 2014 (p) 2015 (p) 2016 (p)
whereas the respective

share in Western Europe is
11.2%
Value of the market of luxury accessories in Poland (in PLN million)

CAGR: +8.1%
274
CAGR: +5.7%
152
2007
165
166
175
2008
2009
2010
12.9%
0.2%
200
186
218
237
255
The segment of luxury accessories

(sunglasses, bags) in Poland is considerably
smaller but growing faster than designer
clothing. In 2012, the sales volume in this
category increased by 8% and accounted
for more than PLN 200 million. The sales
volume of luxury accessories for the period
of 20132016 is forecasted to grow by
8.1% per year on average.
The market value has been growing
systematically as a result of the expanding
group of rich and affluent citizens in Poland,
the new luxury clothing brands entering
the Polish market and the expanding
distribution channels in major Polish towns.
Exclusive boutiques and multi-brand
outlets are the main distribution channels
of the luxury clothing and accessories. It is
expected that other forms of distribution,
such as online stores, will become more
popular.
The event that gained most publicity in
2013 in the sector of luxury clothing and
accessories was the opening of a Louis
Vuitton outlet in Warsaw.
2011
2012
of the Polish accessories

market is represented by
luxury accessories
2013 (p) 2014 (p) 2015 (p) 2016 (p)

37.9%
is the percentage of total

global sales of luxury
accessories sold in Poland
Source: KPMG in Poland based on data and forecasts from Euromonitor International; (p) forecast
2007
Clothing and accessories represent one

of the largest segments of the Polish
luxury goods market: the total sales
volume in 2013 reached PLN 1.8 billion.
Situation in the segment of luxury clothing and accessories in Poland
of companies express positive opinions about the situation

in this segment
Who are the buyers of luxury clothing and accessories?
11%
89%
corporate
customers
52%
20%
aged under 35
73%
28%
aged over 50
of companies believe that the corporate/individual client ratio

will not change
15%
50%
individual
customers
85%
domestic customers
of companies think that foreign customers spend more

per transaction than domestic customers
Key issues considered by buyers of luxury clothing and services
1. Quality
2. Appearance, design, aesthetic aspects
3. Price
4. Brand prestige
5. Uniqueness
Our analyses and forecasts reveal that

Poland is still a very promising market
for luxury brands, with a high growth
potential, which is reflected in the
growing number of foreign luxury brands
from various segments entering the
Polish market. While it is not likely to
happen within a year or two, the growth
trends will persist. More significant
changes are yet to come as they require
changes in our mentality and the
perception of luxury brands.
Marzena Trejnis, General Manager,
LEGIC Kompania Importowa Dbr
Luksusowych
55%
The Polish market of luxury

goods is still at a fairly early
stage. Availability of foreign
exclusive brands is limited, which
reflects Polands medium importance
in comparison with other countries. With
the largest number of potential buyers,
the capital city of Warsaw attracts the
majority of this segment.
The fairly unsuccessful launches of certain brands representing global market leaders maintain the status
quo in Poland: the image of the luxury goods market of clothing and accessories still does not match the
status of mature markets. Despite certain turbulences following the Eurozone crisis, the market of Western
Europe still serves as a benchmark, though not the only one and not the most prominent one. The Eastern and
Far East markets are to be mentioned as areas with the strongest power of attraction, and a real benchmark for
the fastest growing regions. As long as the luxury shopping tourism does not change the market reality at least
to some extent, if at all (see Prague), there will be no substantial transformation or a significant boost of the sales
dynamics in this segment.
On the other hand, one may easily notice the recent expansion of the segment of affordable luxury, manifested
by the expansion of the existing distribution networks, new offers and boutiques which have become a regular part
in the majority of Polish shopping centers. Attractive offers in this segment, particularly those representing new
fashion trends or based on current collections of leading designers, are likely to succeed also in the near future.
Byenabling the new inflow of aspiring customers, the improved economic situation will be a natural ally and growth
driver for this segment.
Mariusz Kaczmarczyk, President of Board,
Paradise Group
Undergoing categorization procedure
7%
24%
40%
20%
6%
3%
Number of 5-star hotel rooms in voivodships

2 921
Mazowieckie
Maopolskie
1 119
Pomorskie
745
Dolnolskie
581
Zachodniopomorskie
565
lskie
269
Wielkopolskie
202
Warmisko-mazurskie
107
witokrzyskie
42
Kujawsko-pomorskie
24
Lubuskie
Podlaskie
Podkarpackie
Lubelskie
dzkie
Opolskie
Hotel and spa services represent the

third largest segment of the Polish
luxury goods market. This is also one
of the most promising segments
interms of future growth, even by 28%
in the coming three years, according to
companies forecasts.
Colliers International data reveals that the
total sales for all luxury hotels in Poland
(5-star hotels, selected SPA hotels) reaches
approx. PLN 1.2 billion per year.
According to international standards, only
several hotels in Poland may be qualified
as truly luxurious. Among them is the
upgraded Bristol Hotel, which joined the
Luxury Collection Hotels group. Another
facility that will soon be able to ensure
asimilar standard is the nearby Europejski
Hotel, currently undergoing renovation.
Also noteworthy is the Copernicus Hotel:
the only one in Poland which has obtained
membership in the exclusive
Relais & Chateaux association of 486 hotels
around the world.
For the purposes of this report, we
assumed that the luxury segment
comprises 5-star facilities. In 2012, there
were approx. 6,500 hotel rooms that could
be classified as five-star facilities. This
constitutes approximately 7% of hotel
rooms in total. Three quarters of 5-star
rooms are found in five largest Polish cities.
Source: KPMG in Poland based on data from Colliers International
PLN 1.2 billion
7.3 Hotel services,

spa resorts and
travel
The value of services provided by luxury hotels

and selected spa resorts
As for spa hotels, only two are considered

to fulfill international standards of luxury.
For the purposes of this report, 17 resorts
were classified into this category, based
on their top quality of service. In total, they
offer nearly 2,000 rooms. All luxury spa
hotels are located outside cities, in typical
holiday resorts. Only a few of them are
located near large urban areas.
Percentage of hotel rooms in Poland by category
Condition of the luxury hotel, spa and travel services
of companies express positive opinions about this market segment
Who are the buyers of luxury hotel, spa and travel services?
50%
50%
corporate
customers
23%
54%
aged under 35
71%
23%
aged over 50
of companies think that the share of corporate customers will grow
Alex Kloszewski, Partner,

Colliers International
28%
75%
individual
customers
72%
domestic customers
of companies think that foreign customers spend more

per transaction than domestic customers
Key issues considered by the purchasers of luxury hotel, spa and travel services
1. Quality
2. Opinions and recommendations
3. Uniqueness
4. Promotion celebrities
5. Brand prestige
86%
We expect the emergence

of up to three luxury
facilities that will offer quality
standards currently unavailable
in our country. However, the only
rational location for those resorts
would be the on the strongest urban
markets, such as Warsaw, Krakow
or Wroclaw. The 5-star sector will
experience continuous growth but
its share in the total number ofhotel
rooms available in Poland isnot
expected to increase given the
anticipated boost in the segment of
affordable 2-star hotels. As for luxury
spa resorts, we predict further
reinforcement of recognized brands,
such as Dr Irena Eris. Additionally,
luxury spa hotels are likely to be
built more frequently in mountain
resorts (Zakopane Dr Irena Eris
spa, currently under construction)
orBieszczady (Aramw hotel).
The growth prospects for the market of luxury goods in Poland seem to be very promising. What we are
currently observing is a growing interest among our clients in exclusive trips, which is propelled by their
disappointment with mass market tourism. As a company, we are also striving to build customer awareness, showing
differences between mass market tourism, premium tourism and exclusive tourism. We foresee that the sector of luxury
travel will become highly profitable within 812 years, when customers from the new generation will enter the market.
Wiktor Stachurski, Easy Times,

co-owner
7.4 Real estate

The primary and secondary market
ofluxury real estate is worth about PLN
0.9 billion per annum. The available
investments may be classified as
luxurious or super-luxurious. To date,
noinvestment in Poland could be
classified (based on global standards)
as ultra-luxurious.
The market of luxurious residential
real estate in Poland is relatively little
known or studied. While the market of
new premises, especially apartments,
isregularly reviewed by market monitoring
companies, information from the
second hand market is indicative only
whereas information on new stand-alone
residencies is hardly available at all.
Based on the data from REAS, the value

of the primary market (apartments and
residences) is approximately PLN 250-260
million annually. The primary is dominated
by developers who erect luxurious
apartments (80% in terms ofvalue). Such
premises erected mostly inWarsaw,
Krakw, Pozna, Wrocaw and
the Tri-city. The primary market
ofresidences is nearly four times smaller,
with the average transaction price for
residences falling significantly below those
of luxury apartments. This means that the
most affluent individuals prefer to invest in
apartments, whereas they prefer to build
residences in an independent manner,
based on individual designs.
The secondary market is almost twice
as big and its value may be estimated at
PLN 600 million annually. This comprises
transactions involving apartments of a total

value exceeding PLN 1 million and a price
per square meter of over PLN 20 thousand,
as well as luxurious residences priced
over PLN 2.5 million. Whereas sale of
apartments is the main type of transaction
on the primary market, the respective share
on the secondary market is merely 12%.
Contrary to the primary market, the average
prices of residences on the secondary
market are significantly higher than the
average prices of apartments.
The total value of annual sales of luxurious
apartments and residences in Poland nears
PLN 900 million. If we add the value of new
residences based on individual designs
to this figure, the value of expenditure
on luxurious real estate in Poland would
significantly exceed f PLN 1 billion.
Number
of offers
First hand
market*
*)
Value of
transactions
(annually, in
PLN million)
Apartments
650
75-80
200-230
Residences
180
20-30
45-50
750
20-25
46-58
5 600
135-145
540-580
250-280
831-918
Apartments**
Second hand
market
Residences***
Total
Number
of transactions
(annually)
Based on data provided by REAS from 5 urban agglomerations (Warsaw, Krakw, Pozna, Wrocaw
andTri-city). Apartments and residences were qualified on the basis of a number of complex criteria
(prices, locations, standard, etc.)
**) Apartments from the second hand market were defined solely based on the price criterion
(offering price > PLN 20 000 per sq.m.)
***) Residences from the second hand market were defined solely based on the price criterion
(offering price > PLN 2.5 million)
Source: KPMG in Poland based on data from REAS (first hand market) and data from websites of gratka.pl
anddomy.pl (second hand market)
The market of luxurious real estate
The market of luxury residential investments may be divided into three segments:
Selected investments:
Super Luxurious Apartments

characterized by attractive location, high
standard of service as well as numerous
high-quality amenities for residents. Only
asingle property may be classified into
this group, i.e. the Zota building by Orco.
Theaforementioned property was designed
by aworld renowned architect D. Liebeskind
and is currently the tallest residential
building in Europe. It has an excellent
location in central Warsaw, with sales prices
significantly exceeding average prices
ofapartments inPoland.
One Hyde Park, London (from EUR 75 000 per sq.m.)

Opus, Hong Kong (from EUR 66 000 per sq.m.)
One57, New York (from EUR 47000 per sq.m.)
Millenium Tower, San Francisco

(from EUR 9 722 per sq.m.)
ZOTA, Warszawa
(the range of PLN 25000 up to PLN 65000 per sq.m.)
Meier Rothschild, Tel Aviv
(from EUR 80430 per sq.m.)
Cosmopolitan, Warsaw
(from PLN 22000 up to PLN 26158 per sq.m.)
Luxurious Apartments with an attractive
location as part of the standard, with
interesting architecture, amenities for
residents such as round-the-clock security
service and leisure facilities. A number
ofpremises located in Poland may be
classified into this segment,
e.g. Sea Apartments in Sopot, Sky Tower
inWrocaw or Cosmopolitan in Warsaw.
Sky Tower, Wrocaw

Sea Apartments, Sopot
Angel Wawel, Krakw
Soneczna Rezydencja II, Warsaw
Na Powilu, Warsaw
Klimt House, Warsaw
Source: KPMG in Poland based on the report entitled Super-Prime Developments, Knight Frank 2013 and information gathered from developers.
Ultra Luxurious apartments this group

of real estate includes the most luxurious
properties in the world, characterized by
super exclusive locations, a recognizable
shape as well as five-star hotel service.
No real estate erected in Poland has been
classified into this group.
100%
of companies favorably view the situation within the sector
Who are the customers of luxurious real estate?
14%
86%
corporate
customers
17%
54%
aged under 35
71%
29%
aged over 50
of companies believe that proportions between corporate

and individual clients will not change
16%
57%
individual
customers
84%
domestic customers
of companies believe that foreign clients spend the same

amounts per transaction as domestic clients
Key aspects considered by buyers of luxurious real estate
1. Quality
2. Looks, design and aesthetic aspects
3. Uniqueness
4. Price
5. Prestige
The idea to erect a luxury

apartment house in
Warsaw stemmed from two
factors: first of all, we saw a unique
opportunity to erect a high-rise
building right in front of the Palace
of Culture and Science. Secondly,
we saw a growing concentration
of capital on the Polish market.
Nevertheless, what is important
is the fact that the lifestyle of
Polish HNWI is becoming much
closer to behaviors displayed by
Western Europeans, contrary to, say,
Russians. Polish owners of luxury
real estate have links with other
countries, through professional life
or travel. A number of them have
sold their businesses to international
corporations. The most important
characteristic of luxury real estate
lies in the fact that they enable
people to lead a unique lifestyle.
The richest citizens (HNWI) in
Poland constitute a rather small
group, nevertheless they express
very specific needs. The possibility
to ensure complete privacy is very
important to them. Another factor of
significance is the possibility to use
their time as efficiently as possible,
for work and private life, especially
given that the borderline between
the two is quite blurred.
Nicolas Tommasini,
Deputy CEO i COO,
Orco Property Group
(Zota property et al.)
Situation on the market of luxurious real estate
If we want to classify an apartment as a luxury one, we must always consider its location. It must be a unique and
prestigious location in the city, within the old centre, in the vicinity of a park, close to theatres, an opera or a seaside
beach. The global architecture stars hired to prepare designs are also an important characteristic of luxury premises.
Katarzyna Kuniewicz, Associate Director,
Research REAS
During the last year, the number of clients willing to purchase luxurious property has increased. Those are not
just customers from Poland but also from Sweden, Norway or the Kaliningrad District of Russia.
As my observations prove, the most important elements in the process of choosing real estate include the location,
attractiveness of the premises and the quality of the offering. An investment which has such characteristics allows us
to pursue a robust sales policy where price plays a secondary role for clients.
Marcin Suchocki, President of Board
dreamHomes.pl (Sea Apartments et al.)
For a few months now, interest in high-standard apartments has risen, especially amongst clients seeking to
buy real estate for rent. The low interest rates motivate clients to get loans and mortgages, with an increasing
number of people paying cash for such property. This is an alternative for those who do not want to invest
their savings at the stock exchange or to keep them at bank. Currently, flat rental fees generate more gains than bank
deposits or treasury bonds. Many buyers believe that a purchase of an apartment in a higher standard is an excellent
investment of their assets.
Pawe Wassilew, Head of Sales & Marketing
BALMORAL PROPERTIES
7.5 Alcohol
andstimulants
CAGR: +3.6%
CAGR: +2.0%
630
568
2007
2008
603
2009
605
2010
627
611
2011
2012
2.9%
of the Polish market of

alcohol is represented by
luxury products
0.6%
of the global sales of luxury

alcohol are generated by
the Polish market
648
672
696
721
2013 (p) 2014 (p) 2015 (p) 2016 (p)

4.5%
CAGR: +7.6%
55
41
2007
44
2008
60
62
66
71
77
84
2010
2011
47.8%

cigars is represented by
luxury products
0.4%
of global sales of luxury

cigars are generated by
the Polish market
2012
2013 (p) 2014 (p) 2015 (p) 2016 (p)

Luxurious alcohols generate most sales

inlarge cities, especially in Warsaw.
Although the market of luxury cigars
inPoland is small, it experienced an
almost 5% increase in 2012 and reached
the value of PLN 62 million (0.4% of the
global market). Based on Euromonitor
International data, further growth by
asmuch as 7.6% annually may be expected
inthe near future.
48
2009
In 2012, the value of sales of luxurious

alcohols in Poland amounted to almost
PLN 627 million, which constituted 0.6%
of the global market. The last few years did
not bring any significant growth in sales
of the aforementioned types of products.
Nevertheless, this market will experience
further growth in the future but will do so
at a fairly slow pace: its average annual
growth rate is expected to reach 3.6%
inthe years 2013-2016.
Luxury champagne is the fastest
growing category of products within the
aforementioned segment (the value of
sales in 2012 versus 2011 rose by 13.3%),
followed by single malt whisky (sales
growth by 10.6%) and Bourbon (growth
ofsales at 8.5%).
Value of the market of luxury cigars in Poland (in PLN million)
CAGR: +8.9%
Luxury alcohol is a large and well

established segment in Poland,
where no significant growth should
be expected. On the other hand,
thesituation is much different
onthemarket of luxurious cigars which,
although not very large, can hope for
very good growth prospects.
28.3%
Source: KPMG in Poland based on data and forecasts from Euromonitor International; (p) forecast
The distribution network for luxury

cigars isconstantly growing. Each
year, thenumber of outlets grows
bigger, offering the aforementioned
type ofassortment. The Internet is also
becoming an increasingly popular channel
of distribution of luxury cigars.
Value of the market of luxury alcohol in Poland (in PLN million)
Situation of the segment of luxury stimulants and luxury alcohol
Who are the buyers of luxurious stimulants and luxury alcohol?
14%
51%
aged under 35
50%
aged over 50
of companies believe that the share of corporate clients will rise
8%
40%
35%
92%
domestic customers

amount per transaction as domestic clients
Key aspects considered by buyers of luxury stimulants and luxury alcohol
1. Quality
2. Brand prestige
3. Price
4. Uniqueness, rarity
We expect the market

of luxury cigars in Poland
togrow in the future, with greater
availability of global brands, not only
because people will be getting richer
but also as a result of improved
customer awareness. Customers
begin to pay greater attention not
only toprice but also to quality
ofproducts. Moreover, the segment
of luxury alcohol and stimulants has
been recently witnessing the arrival
ofanew, interesting concept: there
are new exclusive lounges which fulfill
the function of a store and a tasting
place. Customers really appreciate
the added value of such locations: the
quality of communication and service,
design and the opportunity totaste
the product.
Wojciech Jaroszewicz,
President of Board,
Premium Cigars
66%
of companies favorably view the situation within the segment
7.6 Jewelry
andtimepieces
CAGR: +8.5%
CAGR: +7.7%
487
282
297
314
330
2008
2009
2010
2011
351
380
414
451
243
2007
16.2%

jewelry and timepieces
is represented by luxury
products
0.2%

jewelry are generated
by the Polish market
2012
2013 (p) 2014 (p) 2015 (p) 2016 (p)

39.8%
Source: Analysis by KPMG in Poland based on data and forecasts from Euromonitor International;
(p) a forecast
Jewelry and timepieces is not only one

of the fastest growing segments of the
Polish luxury goods market but also
the segment with the most optimistic
growth prospects.
During 2007-2012 the market of luxury
jewelry and timepieces in Poland recorded
an average growth of 7.7%. In 2012 the
value of the market reached PLN 351
million. This represents an increase by
as much as 6% versus 2011. Notably, the
greatest growth (by more than 10%) has
been recorded in the category of mens
watches.
In 2012, the market of luxury jewelry and
timepieces constituted 16.2% of the whole
Polish market of timepieces and jewelry.
This value is close to the global average
(18.6%), yet it is still much lower than
the respective value for Western Europe
(39.8%).
Nevertheless, some leading global
jewelry brands, such as Tiffany & Co.,
are still absent from this segment
ofthePolish market.
The greatest role in Poland is played by masstige brands (a product under a luxury label, sold in mainstream chain
stores KPMG), mostly brands of foreign origin, and Swiss brands of watches. Customers are influenced by
advertising but they are also looking for a safe choice, thus opting for brands which are well known and recognizable.
Originality is less desirable. The common trend to search and prefer domestic brands, prevalent in more developed markets,
has not yet set in on the Polish market.
Customers are increasingly interested in quality watches. They mostly pay attention to the history and the image of the brand
as well as the presentation effect. There is an increasing awareness that a watch is not only a device that tells the time but
also an element of an outfit and personal image. A good, well-chosen watch testifies to the class and good taste of its owner.
Watches are purchased mostly by private individuals but institutional clients buy them increasingly frequently as gifts.
As a seller of a Polish premium brand we still experience a certain degree of mistrust: people are not sure if a Polish brand
could be a premium or a luxury brand. The key problem is to change the deeply rooted belief that a Polish brand can compete
with foreign brands only in terms of price. This is not true, yet we are still to see more Poles believe that a Polish product
might just as well be luxurious and prestigious. The greatest challenge is to build pride with the Polish origin of the product,
the local inspirations and traditions.
Marcin Lewandowski, President of Board
Copernicus Watch Sp. z o.o., a maker of watches under the Copernicus brand
Value of the market of luxury timepieces and jewelry in Poland (in

PLN million)
Situation on the market of luxury timepieces and jewelry
Who are the buyers of luxury timepieces and jewelry?
7%
93%
corporate
customers
27%
46%
aged under 35
71%
Monika Klejewska,
Marketing Manager,
YES
27%
aged over 50
of companies believe that the share between

corporate and individual clients will not change
17%
50%
individual
customers
We have seen that buyers

ofluxury jewelry are tired with
mass market products and they seek
more personalized products. Another
trend is visible in other countries: noble
jewelry (e.g. with diamonds) is worn
on less formal occasions and in more
low-profile way. Given lower levels
ofaffluence, this kind of usage of noble
jewelry as a sign of top luxury, is not yet
noticeable in Poland.
83%
domestic customers
of companies believe that foreign clients spend more

pertransaction than domestic clients
Key aspects considered by buyers of luxury timepieces and alcohol
1. Price
2. Quality
3. Brand Prestige
4. Brand recognition
5. Looks, design, aesthetic aspects
The Polish market of

jewelry is dominated by
just a few domestic players who
nicely divided the market among
themselves. Theposition of domestic
brands is well grounded and enjoys
solid growth. What is therefore more
interesting isthe behavior of global
players whose presence in Poland
still remains akind of mystery. The
growing wealth of the society naturally
drives interest in jewelry. Watches are
amuch more dynamic category, where
growth perspectives are much more
promising. Poles have grown ready
and they understand the meaning
andimportance of good and expensive
watches and are willing to spend
increasing sums for that purpose.
Radosaw Jakociuk,
Vice-President of Board,
Vistula Group (W. Kruk et al.)
38%
of companies favorably view the situation within the sector
7.7 Perfume
andcosmetics
Value of the market of luxury perfume and cosmetics in Poland PLN

(in PLN million)
CAGR: +4.4%
2007
279
2008
277
2009
282
2010
293
286
2011
2012
2.6%

perfume and cosmetics
are luxury products
0.3%
of the global sales of luxury

perfume and cosmetics
are generated Poland
304
317
332
In 2012, the value of the market of luxury

perfume and cosmetics in Poland was
estimated at about PLN 293 million. This
represented about 2.6% of the total value
of perfume and cosmetics market in
Poland.
2013 (p) 2014 (p) 2015 (p) 2016 (p)

12.6%
Source: KPMG in Poland, based on Euromonitor International data and forecasts; (p) forecast
In 2012, the value of this segment

increased by 2.5%. The categories
recording the fastest growth were luxury
tanning products as well as hand care
products. An important factor contributing
to growth was the expansion of drug
stores offering the aforementioned types
of products.
It is forecasted that the sales of such
products will grow on average by 4.4%
annually in the near future.
In the category of luxury perfume, one can
encounter the most exclusive items with
flasks decorated with precious stones.
One excellent example comes from Clive
Christian perfume, considered to be the
most expensive perfume in the world.
Theflask of this perfume is decorated
with a 5-carat diamond and its price is PLN
675 thousand.
In the last year only the portfolio of our niche perfume shops expanded as we added many new, previously
unavailable brands. Currently, customers in Poland may purchase perfumes from the best, renowned manufacturers
from all over the world. Perfumes from France, Italy, UK or Arab countries play the greatest role but this is constantly
changing. Each year, during our visits to international fairs in Milan or Florence we see the arrival of new brands from around
Europe. Ifany of them becomes recognized by connoisseurs, it will be introduced onto the Polish market sooner or later.
Also, achange in preferences related to fragrance compositions is noticeable: Polish women tend to choose floral scents
yet recently more people have been seeking oriental or incense notes in perfume. Perfume with agar tree notes, the most
expensive tree in the world, is the recent hot thing. Also, we see a blurring borderline between mens and womens fragrances.
Tatiana Grabowska, owner
Laselection, exclusive niche perfume shop
266
The market of luxury perfume and

cosmetics in Poland still has very high
growth potential. This is reflected,
among others, by a very small
share ofluxury products in the total
market ofperfumes and cosmetics
incomparison with Western Europe.
348
CAGR: +1.9%
Situation on the market of luxury perfume and cosmetics
of companies favorably view the situation in this market segment
Who are the buyers of luxury perfume and cosmetics?
3%
97%
corporate
customers
28%
40%
aged under 35
67%
32%
aged over 50
of companies believe that the share of corporate

clients will rise
12%
80%
individual
customers
88%
domestic customers

amount per transaction as domestic clients
Key aspects considered by buyers of luxury perfume and alcohol
1. Price
2. Quality
4. Brand recognition
5. Uniqueness
Micha Missala,
co-owner, Quality Missala,
a network of luxury perfume shops and
distributor of luxury and niche cosmetics
Poles are looking for news

and inspirations from global
trends, traveling to other
countries to find new things in beauty.
At the same time, Polish consumers
choose renowned brands with a
fascinating story that differentiates
them from their competitors. This is
why most renowned world brands
top the sales rankings. The situation is
similar on the international market, with
one difference. Following a fascination
with such brands, European women
are turning to more niche products,
ones that are specialized and less
recognizable. I think that this phase
ofgrowth is still ahead in Poland.
Agnieszka Mosurek-Zava, PhD
President of Douglas-Polska
Regional Director for Poland, Czech
Republic, Latvia and Lithuania
72%
We can see an increasing

number of young people
purchasing luxury perfume
and cosmetics. There is a greater
degree of openness to non-standard,
distinctive scent compositions.
Moreover, our clients show increasing
knowledge of perfume. A fragrance
is increasingly viewed as an element
ofa comprehensive image. A growing
number of consumers own a collection
of a few (or more than ten) fragrances
which they use in various situations.
Inthe personal care segment we also
see a growing number of women opting
for radical solutions in aesthetic medicine
yet many problems can be solved using
carefully selected beauty products.
7.8 Yachts
Number of yachts registered in each year in the Polish registry

of sea yachts
1361
1247
1035
1016
651
491
506
335
50
67
121
181
156
172
106
118
62
2005
2006
2007
2008
2009
2010
2011
2012
H1 2013
Yachts over 10 m in length
Other yachts
The total number of all yachts registered

in Poland has remained similar for three
years, which reflects a permanent
and relatively high interest among
customers. In 2012, a total of 1134 sea
yachts were registered, which was
slightly less than in the preceding year
(by 1%), including 118 sea yachts with
body length exceeding 10 meters
(up by 11%).
The structure of yachts registered in H1 of 2013 by propelling

method and size
43.9%
Yacht manufacturers and distributors also

confirm growing interest in larger and,
consequently, more expensive and more
luxurious yachts.
27.5%
17.2%
5.6%
Amongst all registered sea yachts,

the largest share is constituted by
new boats, manufactured after 2010.
Altogether, such vessels represent
almost a half of all new registrations.
5.6%
0.2%
Up to 5 m
From 5 to 10 m
Sail boats and yachts
Above 10 m
Motor boats and yachts
Source: KPMG in Poland based on data from the Polish Yachting Association
918
the total number of

companies in the Polish
yacht sector in 2011
13.000
the total employment

in the Polish yacht sector
in 2011
sales of the Polish

yacht sector
in 2011
EUR 1.2 billion
17.000
Apart from large manufacturers who

sell yachts under their own brands
(Sunreef Yachts catamarans, Galeon
motorboats, Delphia Yachts sail
boats), there are companies which
manufacture yachts for other entities
(e.g. Ostrda Yachts), numerous
subcontractors and resellers of yachts
made by foreign manufacturers, mainly
Italian and American ones.
the total number of yachts

manufactured in Poland
in 2013 (estimated)
Source: KPMG in Poland based on data from Eurostat and the Polish Chamber of Marine Industry and Water Sports
1379
The yacht industry is an important

segment of the Polish economy.
It is constituted by more than 900
companies, altogether employing
over 13 thousand people, with
15to17 thousand yachts constructed
annually. More than 90%
of end products are exported.
Situation on the yacht market
50%
of companies favorably view favorably view the situation

in this segment
Who are the buyers of yachts?
47%
53%
corporate
customers
5%
50%
aged under 35
aged over 50
of companies believe that the proportion between

corporate and individual clients will not change
64%
60%
45%
36%
domestic customers

perasingle transaction than domestic clients
Key aspects considered by buyers of yachts
1. Price
2. Quality
5. Tradition, history of the brand
50%
individual
customers
What has been observed in the last few years is a significant shift in demand of wealthy yacht buyers
inPoland towards larger, better equipped and more expensive vessels. Only a few years ago the average
length of yachts sold by our company was 9 meters, whereas now it is about 12 meters. Obviously, the prices
of such yachts are accordingly higher, which clearly confirms that Poles increasingly appreciate luxury vessels.
Wieczysaw Kobyko, President,
Galeon
For many years now the Polish yacht industry has been strengthening its position. This is clearly reflected inthe fact
that there are no solid international market analyses that would not consider the situation of our sector inPoland.
We have also seen a growing interest in our largest models, both cruise yachts and sail boats. An additional factor which
reinforces the foreign expansion of Delphia Yachts is development of the legendary Swedish brand Maxi Yachts, purchased
in2012.
Maciej Kot, Director,
DELPHIA YACHTS
A growing number of people ask about the largest yachts or those with super luxury furnishings. This is why
we have seen increased interest in our shipyard. We put most emphasis on quality and uniqueness of our
products, and this is something customers appreciate the most.
Magda Janowska,
JANMOR
Our company operates on international markets where the main tendency is that customers are interested inlarge
vessels, the so-called super yachts with a length of over 100 feet, both sail boats and motor boats. Following the
2008 crisis, the industry shifted its perspective of co-operation between the client and the shipyard. Nowadays, theclients,
their requirements and budgets are in focus. With our knowledge of clients requirements and their financial capabilities, we
are able to offer a custom-made product.
Francis Lapp, President and founder,
Sunreef Yachts
CAGR: +4.9%
680
CAGR: +6.2%
415
2007
420
2008
449
2009
491
2010
517
2011
561
2012
580
625
657
2013 (p) 2014 (p) 2015 (p) 2016 (p)
Source: Forecasts and estimations of KPMG in Poland based on PMR data and own data;
(p) forecast
7.9 Interior design,

electronics and
stationery articles
The estimated value of the Polish
market of luxury furniture and interior
design reached almost PLN 0.6 billion
in 2012. This represents about 5% of
the market of furniture and interior
design in Poland.
In the last six years the market of luxury
furniture and interior design articles
experienced an average growth of 6.2%.
The growth was driven not as much by
a large number of new real properties
released for use but, rather, Poles
growing interest in interior architecture
and design.
In the coming years we expect the
interest in top quality furniture and design
to grow, nevertheless fewer transactions
on the residential property market will
slightly undermine the dynamics of the
market.
We have already been working on the Polish market for six years. We are building the brand awareness
ofHastens from scratch, we stress the importance of good sleep, which determines our day, the way we fell
and act. We constantly observe clients needs, we address their expectations and verify the results. A certain barrier
lies in the fact that a bed is only a piece of furniture which is supposed just to match our bedroom so it cannot cost as
much as a good car. Well, why not, actually? After all, this is where we spend a third of our lives.
Nowadays, we live a fast and intensive life but, increasingly, we start to consider good, deep sleep as a way to take care
of ourselves. Year after year, we observe that our clients increasingly realize that the quality of their sleep influences
how our bodies work. This is an essential element of a healthy lifestyle, in the same manner as sports, good diet
orliving in harmony with nature. We can firmly say that we can see potential here! In the next few years we definitely
expect our sales to rise, mostly in terms of quantity.
Agata Zawadzka, Hastens Brand Development Manager in Poland
Value of the market of luxury furniture and interior design articles inPoland
(expressed in PLN million)
Value of the market of luxury electronic gadgets PLN

(in PLN million)
The value of luxury household

electronics in Poland amounted to PLN
156 million in 2012. The subsegment
ofluxury electronic gadgets was worth
PLN 7.3 million.
CAGR: +5.4%
CAGR: +5.1%
122
2007
131
156
142
161
193
111
2008
2009
2010
2011
2012
2013 (p) 2014 (p) 2015 (p) 2016 (p)
Source: KPMG in Poland based on data BMI and own data; (p) - forecast
Polish market of luxury electronic gadgets
PLN
7.3 million
the value
of the Polish market
of electronic gadgets
whilst the respective

share in Western Europe
amounts to
0.2%
0.6%
0.2%
of the Polish gadget market

is constituted by luxury
gadgets
CAGR: +3.9%
CAGR: +0.2%
81
2007
2008
37.8%
80
80
80
82
2009
2010
2011
2012
85
88
91
96
2013 (p) 2014 (p) 2015 (p) 2016 (p)

stationery articles includes
luxury products
whilst the respective

51.1%
0.6%
Luxury gadgets include, for example,

mobile phones made of precious metals,
frequently with inserts made of natural
leather or precious stones (diamonds,
rubies, emeralds). The interest in luxury
mobile phones in Poland is low, due
to fast developments in technology:
consumers are reluctant to pay a high
price foraproduct which will soon go
out-of-date.
of world sales of luxury

gadgets is achieved
in Poland
Value of the market of luxury stationery articles PLN

(in PLN million)
87
While the market of luxury electronics will

grow in future, the subsegment of luxury
electronic gadgets will shrink, mainly due
to the growing competition from
high-tech devices and smartphones.

stationery products
is generated by the Polish
market
Source: KPMG in Poland based on data and forecasts from Euromonitor International and BMI; (p) forecast
Luxury stationery articles constitute

a quite mature category, with a group
of loyal buyers in Poland. In 2012, the
value of the whole market amounted
to PLN 82 million, which represented
38% of the entire market of stationery
articles in Poland.
While the size of the market has
not changed significantly in recent
years, stable growth is forecasted
for the future. Luxury stationery
products are sold in monobrand shops
andinspecialist stores. The importance
of online sales is still very low.
146
183
177
20%
of companies favorably view favorably view the situation

in this segment
Who are the buyers of luxury furniture, household accessories,

electronics and stationery articles?
21%
79%
corporate
customers
13%
58%
aged under 35
50%
29%
aged over 50
of companies believe that the share of corporate clients will increase
15%
66%
individual
customers
85%
domestic customers

perasingle transaction than domestic clients
Key aspects considered by buyers of luxury furniture, household

accessories, electronics and stationery articles
1. Price
2. Quality
3. Brand prestige
4. Values represented by the brand
The greatest global furniture

brands are increasingly
willing to enter the Polish market.
Their customer base is recruited
from customers who are well off and
aware of those brands. Aproblem
for collections offered by foreign
companies lies in common copying
of their products by small, local
manufacturers. Nevertheless, while
remaining in the luxury sector,
customers increasingly turn away
from such solutions in favor of original
products manufactured in Western
European countries. This fact may be
a positive harbinger for luxury brands
in this segment in Poland. GRANGE
customers are mostly private
individuals aged 40+. However, those
are not people you see in newspaper
headlines. Their knowledge, sense of
aesthetics and top global experience
means that those customers
concentrate mainly on beauty and
unique quality. They seek high-end
furniture which will remain beautiful
for generations. Those customers
appreciate the importance of details,
sorts of wood and its quality. Once
they become our customers, they
stay with us for years. Along with
new investments in real property, they
come again to order furniture which
they love and which gives them
asense of top comfort and luxury.
Ewa Jaros, showroom owner,
GRANGE
Situation on the market of luxury furniture and household accessories,

electronics and stationery articles
58 | Section
Luxury goods
or Brochure
marketname
Despite the fact that the global and

European market of luxury goods
is highly competitive, some Polish
brands have been able to succeed.
International expansion coupled with
excellent quality of products should
guarantee a robust market position
of Polish brands on the international
market ofluxury goods in future.
Along with the increasing affluence of
the society, Polish luxury and premium
brands enjoy a growing popularity on the
domestic market, while making efforts
to expand outside Poland. In the last few
years, some Polish brands have achieved
global or European success.
In the beauty segment, Dr Irena Eris
may boast an exceptional success. In
2012, it was invited to join the prestigious
Comit Colbert, an association
established by J.J. Guerlain. The success
is even greater considering that Dr Irena
Eris is one of very few members from
outside of France and the only member
from Poland. The fact that Dr Irena Eris
products are to be found amongst such
brands as Chanel, Dior or Louis Vuitton
indicates that their exceptionality is also
appreciated abroad.
The clothing segment has also
experienced dynamic growth in Poland.
New boutiques of Polish designers pop
up in numbers in the most renowned
Polish commercial streets. Some labels
are also recognizable on the international
market. These include Twins from
Wrocaw, offering exclusive mens
clothing, the relatively new La Mania,
Worldwide success
ofPolish brands
which recently opened its own stand in
Londons Harrods, or well-known Polish
designers such as Eva Minge, Maciej
Zie or Gosia Baczyska. In 2013,
Eva Minge received the prestigious
International Star Diamond Award from
the American Academy of Hospitality
Sciences, awarded to companies which
stand out on the luxury goods market.
Apart from the Polish designer, only
Louis Vuitton was honored with the
same award.
The yacht market has somewhat
different characteristics, featuring
such Polish companies as Sunreef
Yachts, Galeon and Delphia Yachts.
Considering the very small demand in
Poland, yachts had to expand into foreign
markets. Each company operating in
that segment has adopted a different
growth strategy. Galeon specializes
in manufacturing luxury motor boats,
Sunreef concentrates on the niche
market of luxury catamarans while
Delphia Yachts, which manufactures
sail boats, decided to invest in further
development through takeovers, and in
2012 it took over the renowned Swedish
shipyard Maxi Yachts. Each of those
companies is highly successful on the
international market.
Takeovers are also recorded on on the
market of watches and jewelry. Apart
recently purchased the brand of the
Swiss watch manufacturer Albert Riele
and re-launched production. The takeover
of the Swiss brand may help this Polish
company raise its international profile.
Another effective method for Polish

brands to make a global presence
is through a merger with a global
corporation. This is how the Belvedere
vodka brand from yrardw, owned by
LVMH, has managed to win international
acclaim. Moreover, the market of luxury
and premium vodkas has also witnessed
the success of other brands which
originate from Poland, such as Chopin.
In the case of luxury brands originating
from Poland, each segment struggles
with the negative impact of the
geographic origin, which makes it difficult
for companies to make a presence on
global markets. Nevertheless, the visible
success of domestic brands prove that
it is, indeed, possible to make a Polish
brand international. The most important
factors here include a long term vision
of growth, high quality and a carefully
crafted expansion strategy.
Calendar of events
on the Polish
market of luxury
goods
However, it is worth noting that many

more events took place in the course
ofrecent years, changing the picture
ofthe Polish luxury market. We present
themajor milestones below.
The opening of a Louis Vuitton

showroom in the vitkAc store was the
most commented event of 2013, with
an immense importance for the entire
luxury goods market in Poland.
Dr Irena Eris
X 2012
The brand joined
the prestigious Comite Colbert
club gathering the most
luxurious brands
vitkAc
XI 2011
The luxury fashion store
with monobrand boutiques
of worlds major brands
opens in Warsaw
Rolex
III 2010
The rst showroom
of Swiss luxury watch
manufacturer opens
in Poland
La Casa
del Habano
Louboutin
VII 2011
The rst boutique
with legendary shoes
opens in Poland
VI 2010
The agship showroom
of Cuban cigars opens
in Warsaw
Maxi Yachts
IV 2012
The renowned Swedish
yacht brand taken over
Polish manufacturer
Delphia Yachts
Lotus
Aston Martin
III 2010
Ofcial opening
of luxury vehicles
showroom
in Warsaw
Ferrari
X 2010
The rst showroom
opens in Poland
XII 2012
A showroom of this
luxury brand opens
in Piaseczno
near Warsaw
2012
2011
2010
Maserati
IX 2011
The rst showroom
of British vehicles
in Poland
Joop!
IV 2012
The rst boutique
opens in Poland
Michael Kors
XI 2012
The rst showroom
opens in Poland
Desir Paris
Missala Qessence
XI 2011
The ofcial launch
of the rst Polish luxury
perfume created by
Quality Missala
VI 2012
The rst boutique
selling Tara Jarmon
and Gerard Darel
opens in Poland
Mysia
Corporate Centre
X 2012
A centre with niche
brands opens
in Warsaw
Luxury Art. Cinema

VI 2013
A showroom opens
in Warsaw where luxury
audio-video brands
are presented in specially
arranged interiors
Hotel Bristol
I 2013
The rst Polish
hotel joined the group
of the worlds most luxurious
hotels The Luxury Collection
Hotels&Resorts
Eva Minge
X 2013
The prestigious
International Star Diamond
Award received by Polish
designer Eva Minge
Sky Tower
Rolls Royce
V 2013
An authorization
agreement signed
with a Polish dealer
IX 2013
Presentation of the rst
fully nished apartment
in the luxurious
Wrocaw investment
2013
Cosmopolitan
Harpers Bazaar
Polska
II 2013
The rst regular
issue of the oldest fashion
magazine in Poland
V 2013
Presentation
of showroom
apartments
Karl Lagerfeld
IX 2013
Opening of the rst
boutique of the designer
in Poland
Albert Riele
VI 2013
Apart announces
the takeover of the brand
of Swiss watches
Lux Brand Expo

IV 2013
The rst edition of luxury
goods trade fairs
in the Pure Sky Club
business club
in Warsaw
Louis Vuitton
VI 2013
Opening of the mono-brand
showroom in the vitkAc
fashion house
ZOTA
IX 2013
Opening of the showroom
space of one of the most
luxurious apartment
houses in Europe
62 | Section
Luxury goods
or Brochure
marketname
The goal of this years edition

ofthe survey was to present the
market of luxury goods in Poland
from the perspective of companies
manufacturing and/or distributing
such goods. Therefore, this years
edition complements the perspective
of buyers of luxury goods presented in
the previous version of the report.
Analysis of Poles affluence level
Rich and affluent individuals were
analyzed in our survey (i.e. those
with a total gross income PLN 7127).
Theestimates were based on data
published by the Ministry of Finance
(analysis of income) as well as by the
National Bank of Poland and Credit
Suisse (analysis of owned property).
The KPMG analysis also presents
the number of HNWI (high net worth
individuals) i.e. the number of people
with liquid net assets worth at least USD
1 million. The aforementioned data were
drawn from a 2013 Credit Suisse report.
Analysis of the market of luxury goods
and its particular segments
The analysis as well as characteristics
ofparticular sectors of the luxury market
in Poland is based on data provided by
Euromonitor International and a company
survey. The survey was conducted by
KPMG in Poland in September 2013.
Research methodology
Itfocused on companies manufacturing

and selling luxury goods in Poland,
with 71 questionnaires returned by
thecompanies.
Additionally, the following sources
ofinformation were used when analyzing
specific market segments:
Analysis of the market of premium
and luxury vehicles the analysis
isbased on data received from
PZPM/CEP.
Analysis of the yacht segment
calculation of the value of the yacht
market and its characteristics is
based on the Eurostat data as well
as data from the Polish Chamber of
Yacht Industry and the Polish Yachting
Association.
Analysis of the real estate segment
the analysis of the luxury real estate
market is based on data published by
REAS, the Knight Frank report entitled
Super-Prime Developments and
information supplied by developers.
Analysis of the hotel services
segment the profile of this segment
was described on the basis of data
provided by Colliers International.
Analysis of other luxury segments
the analysis of luxury household
electronics is based on BMI data
andthe profile of the luxury furniture
was described using PMR data.
Availability of global luxury brands

was analyzed on the basis of more than
200 key luxury brands (a subjective
selection) from various market
segments. For each brand, the presence
of its official representative or distributor
was verified. The analysis did not cover
on-line sales since availability of brands
would amount to almost 100% given
thecoverage of the Internet.
The calendar of events was prepared
on the basis of our desk research
conducted in 20102013.
Words of thanks
We would like to thank all institutions which helped us in developing the content
ofthis publication and who offered invaluable insights:
Colliers International
Euromonitor International
Polish Association of Automotive Industry
Polish Yachting Association
REAS
Authors: Piotr Kuskowski, Andrzej Marczak, Anna Patyra, Mariusz Strojny, Joanna Trawka, Marta Trusiewicz, Tomasz Winiewski
We would also like to express our thanks to all companies which participated in the
survey and who shared their observations about the luxury goods market in Poland.
KPMG Offices in Poland

Wrocaw
ul. Bema 2
50-265 Wrocaw
T: +48 71 370 49 00
F: +48 71 370 49 01
E: wroclaw@kpmg.pl
Krakw
al. Armii Krajowej 18
30-150 Krakw
T: +48 12 424 94 00
F: +48 12 424 94 01
E: krakow@kpmg.pl
Gdask
al. Zwycistwa 13a
80-219 Gdask
T: +48 58 772 95 00
F: +48 58 772 95 01
E: gdansk@kpmg.pl
Pozna
ul. Roosevelta 18
60-829 Pozna
T: +48 61 845 46 00
F: +48 61 845 46 01
E: poznan@kpmg.pl
Katowice
ul. Francuska 34
40-028 Katowice
T: +48 32 778 88 00
F: +48 32 778 88 10
E: katowice@kpmg.pl
kpmg.pl
d
al. Pisudskiego 22
90-051 d
T: +48 42 232 77 00
F: +48 42 232 77 01
E: lodz@kpmg.pl
Warsaw
ul. Chodna 51
00-867 Warsaw
T: +48 22 528 11 00
F: +48 22 528 10 09
E: kpmg@kpmg.pl
Contact
KPMG Sp. zo.o.
ul. Chodna 51
00-867 Warsaw
T: +48 22 528 11 00
F: +48 22 528 10 09
E: kpmg@kpmg.pl
Andrzej Marczak
Tax Advisory
Partner
E: amarczak@kpmg.pl
Tomasz Winiewski
Financial Advisory Services
Partner
E: twisniewski@kpmg.pl
Mariusz Strojny
Knowledge Management
& Research
Manager
E: mstrojny@kpmg.pl
Magdalena Maruszczak
Marketing and Communications
Director
E: mmaruszczak@kpmg.pl
kpmg.pl
2013 KPMG Sp. z o.o. is a Polish limited liability company and a member firm of the KPMG network of independent member firms affiliated with International
Cooperative (KPMG International), a Swiss entity. All rights reserved.
The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular entity. Given the pace of developments in the Polish
legislation and economy, when you read this publication please make sure that the information contained herein is still valid. Before making any specific decisions please
consult our advisors. The views and opinions expressed herein are those of the authors and do not necessarily represent the views and opinions of KPMG Sp. z o.o.

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2 | Section or Brochure name

3 Buyers of luxury goods in Poland and their financial situation

4 Availability of global luxury brands in Poland

5 Perception of the Polish luxury goods market by companies

6 Expenditure on luxury goods

7 Segments of the luxury goods market

8 Global success of Polish brands

Luxury goods market in Poland Edition 2013 | 3

4 | Section or Brochure name

Luxury goods market in Poland Edition 2013 | 5

The value of the luxury goods market

The number of the wealthiest Poles is

According to our estimates, the value of the

The wealthiest individuals (HNWI high net

Luxury and premium vehicles represent

As much as 69% of global luxury

Positive growth prospects.

6 | Section or Brochure name

Luxury goods market in Poland Edition 2013 | 7

Buyers of luxury goods

Even though 2013 saw no economic

8 | Luxury goods market in Poland Edition 2013

Number of rich and affluent individuals in Poland (expressed in thousands)

Taxpayers generating income over

2013 (p) 2014 (p) 2015 (p) 2016 (p)

2013 (p) 2014 (p) 2015 (p) 2016 (p)

Taxpayers paying taxes in accordance

Luxury goods market in Poland Edition 2013 | 9

According to the 2013 Global Wealth

Number of HNWI in Poland by wealth (2013)

USD 5-0 million

USD 10-50 million

USD 50-100 million

above USD 100 million

Total number of HNWI individuals in selected European countries

Polands share in HNWI individuals in Europe

Rich and affluent individuals constitute

10 | Luxury goods market in Poland Edition 2013

3.2 Assets owned by

securities fell considerably in the course of

Deposits represent the greatest portion of

The least liquid assets represent the third

Assets held by Polish households (in PLN billion)

PLN 1 409 billion

PLN 352 billion

Cash and deposits

PLN 645 billion

PLN 1 721 billion

The estimated value of non-financial shares owned by Poles,

PLN 576 billion

The total value of financial liabilities (Q1 2013)

The share of financial liabilities versus total cash,

PLN 378 billion

Luxury goods market in Poland Edition 2013 | 11

Despite a systematic growth of income,

such as Slovakia or Croatia (USD 21.6

3.3 Assets owned by

12 | Luxury goods market in Poland Edition 2013

Assets per capita (in USD thousand)

Affluence of societies in selected European countries (mid- 2013)

The size of the circle reflects the total value of assets

An yearly average change in the value

Luxury goods market in Poland Edition 2013 | 13