Global personal luxury goods market hits 288 billion in 2021: Bain & Co.

After its worst fall in history, the personal luxury goods market has experienced a V-shaped rebound, valued at € 288 billion, according to Bain & Company, a Boston-based global consultancy firm that says the medium-term direction luxury market remains unchanged. The company estimates that market growth will reach 360-380 billion euros by 2025.

In an optimistic situation, where the growth path of the first half of 2022 continues throughout the year, by the end of 2022 the market will reach around 320-330 billion euros, which will increase by 10-15 percent compared to 2021.

After its worst fall in history, the personal luxury goods market has experienced a V-shaped rebound, valued at € 288 billion, according to Bain & Company, a Boston-based global consultancy firm that says the medium-term direction luxury market remains unchanged. The company estimates that market growth will reach 360-380 billion euros by 2025.

In a slower scenario, which projected a potential slowdown in growth due to the slow recovery of mainland China and the challenge of mature market spending due to inflationary pressures and the macroeconomic recession, the market will reach 305-320 billion euros by the end of 2022, compared to 5 in 2021. Growing 10 percent.

Markets have benefited from a booming 2021 holiday shopping season across the region, with a 7 percent increase over the same period in 2019.

In addition, China continued double-digit growth last year and Western markets maintained local demand. The United States, in particular, maintained momentum even after the end of the federal stimulus check, the company said in its luxurious 2022 Spring update titled ‘Reconstruction of the Future’.

The study was published in collaboration with the Fundazion Altagama, the industrial foundation of Italian luxury goods manufacturers.

“Despite significant macroeconomic challenges, hyperinflation, including slowing GDP [gross domestic product] Growth and the Russia-Ukraine conflict, the private luxury goods market has once again proved to be resilient, ”said Claudia D’RPGO, partner and lead author of the research at Bain & Company.

“Luxury product brands have shown particularly strong growth this year and are playing a leading role in the ongoing sustainable and digital transformation of the world,” he was quoted as saying in a press release.

The private luxury goods market experienced a significant performance in the first quarter of 2022, with the current exchange rate increasing by 17-19 percent compared to the same period in 2021 (13-15 percent at a fixed exchange rate) for various reasons.

The impact of the Russia-Ukraine conflict has so far been limited to local markets, with limited consequences on the attitudes and spending of luxury customers worldwide.

The U.S. luxury market is experiencing unprecedented growth as luxury brands reveal the true power of diversity and inclusion, exploring the real potential of an entire American customer base, the study found.

Expenditure has been reduced in China under strict COVID restrictions. However, the country showed strong momentum during Chinese New Year and until March 2022, and its spending has been challenged by its stringent COVID restrictions, which have proven to be far more significant than its 2020 policy. Nevertheless, the appetite of local consumers remains strong and will likely lead to the recovery of the country from the end of 2022 to the beginning of 2023.

South Korea is going through a profound change. The country has increased its size and cultural relevance, replacing tourism spending with local demand. Winning brands have successfully redesigned their business models in the country to meet growing local demand and influence, the study found.

In addition to the growth provided by traditional luxury products, digital resources and the virtual world, Metaverse, social media and gaming, will play an increasingly relevant role in the value proposition of luxury brands.

By the end of 2030, digital assets and metavers will cover 5-10 percent of the global luxury market. Luxury brands have the opportunity to play a key role in shaping the growing virtual world, acting as creators and makers.

Technological disruptions favor luxury brands that adopt a Uber-channel approach, creating new intimacy with customers using new and evolving touchpoints, the research report noted.

The high consumer demand for sustainable products and the lack of clear sustainability standards with evolving sustainable issues represent a call-to-action for luxury brands: innovation on sustainability to create a competitive advantage.

Fibre2Fashion News Desk (DS)