Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. A powerful factor for sector growth this decade will be generational trends. As consumer interest in greener vehicles grows, along with government encouragement, premium car manufacturers have focused on larger models, to ease the higher cost of electric-car components. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. Bain Warns China Luxury Growth to Further Decelerate in 2022 Prospects for personal luxury goods market out to 2030 are also highly positive, todays analysis concludes. China to be world's No 1 luxury market by 2025, Bain & Co forecasts Online and monobrand, key channels for 2021 recovery, will lead the mid term growth of the industry. High-end brands want to control their own destiny and how they appear and are presented in the store, he says, adding, So we are not going to move away from department stores but change the economic relationship they have with them to concessions.. Sustainability remains a focus for both consumers and shipyards, from greener propulsion systems to design-for-disassembly solutions that make yacht materials more recyclable. The full report, which will be published in late 2022, will include a full analysis of the Top 100 companies, as well as luxury trends and special focus sections. Omnichannel retailing and a major shift in passenger mix are poised to transform traditional airport shopping. Market favored by positive consumption tailwinds, yet partially slowed-down by disruption across the supply chain. The prospects for personal luxury goods out to 2030 are positive. However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. MILANNovember 15, 2022The global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. Luxury is converting into art, with the ultimate objective of transcending from its original form, rooted in craftmanship and functional excellence, towards broader meanings, empowered by imagination and symbolic power, to build its handmade creations. Bain & Co. partner: Luxury brands seen a 'roaring start' to 2022 CNBC International TV 331K subscribers Subscribe 694 views 1 year ago Federica Levato, a partner at Bain & Company,. New types of activities, often powered by technology, should also spark an additional 60 billion to 120 billion in sales by 2030, from sources such as the metaverse and brand-related media content. Heinemann Outperforms Travel Retail Rivals With 81% Growth To $4.2 Billion In 2022, Airport Retail Confectionery Firsts From Oreo And Lindt, Both With Live Chefs, Consumer Demand Is Slowing, Good For Government Policy Wonks, Bad For Retailers, An Exclusive Retail Service Experience Is At The Center Of CB2's New Design Shop, Whats Working - And Not - In Mobile Commerce (Part 1 Of 2), Magna reports global digital media grew by nearly one-third year-over- year in 2021, China can be a risky bet for Western luxury brands, Chinese Gen Z consumers find local brands. Please see www.deloitte.com/about to learn more. Broader meanings and business models will emerge. We work with ambitious leaders who want to define the future, not hide from it. After a severe contraction in 2020 due to the Covid-19 pandemic, the market grew back to 1.15 trillion in 2021 and surprised everyone in 2022 by further growing 19%21%, according to our estimates. The top wealth segments stand out more now than ever before a . The customer wants a seamless experience to shop anywhere, anytime. Increasing market concentration, yet with high dynamism from rising stars. DTTL does not provide services to clients. Secondhand luxury goods sales are not included in Bains personal luxury goods market size estimate, but in 2021, Bain reports they will account for 33 billion or $38 billion in sales, up 27% from 2019. Luxury yachts confirming positive momentum, with growth in deliveries paired with sharp growth in order books. As a result, Bain-Altagamma analysis sets out two scenarios, with sales growth in the personal luxury goods market set to be between 3 to 5% or 6 to 8% (at constant exchange rates), depending on the strength of economic recovery in China and the ability of the US and Europe to withstand economic headwinds. Find info on Construction companies in Cottenchy, including financial statements, sales and marketing contacts, top competitors, and firmographic insights. The impact of a possible global recession on the industry in 2023 could differ from the impact of the 200809 global financial crisis. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Although there will never be another China in terms of outsize growth contribution to the industry, India and emerging Southeast Asian and African countries have significant potential, if the luxury industrys infrastructure (such as malls) and regulation can evolve quickly enough in those markets. Altagamma Studies | Altagamma SEA is still suffering from a lack of tourism. The nouvelle vague the new wave of the luxury goods market will demand evolution amid disruption, adaptation amid uncertainty, and an expansion of creativity in all of the basics all while new trends and concepts develop, said Claudia DArpizio, a Bain & Company partner and leader of Bains Global Luxury Goods and Fashion practice, the lead author of the study. While the industry has benefited from increased prices and a continued shift to higher-margin direct channels, the lower profit levels reflect luxury brands investment in future growth, particularly through increased marketing spending and ambitious transformation programs. Meanwhile, the effect of the airline industry's CO2 mitigation costs has already begun to reshape medium- to long . Moreover, Gen Y and Gen Z are expected to contribute roughly 180% of the total growth from 2019 to 2025. 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. Local Japanese consumption was solid, and the market also benefited from the return of tourists after the country reopened to visitors. A deliberate (and effective) elevation strategy has driven a progressive price increase across the industry (driving around 60% of the 2019-2022 growth) without damaging volume growth. These domains are rich with opportunities for luxury brands but investments for future growth are crucial.. The report reserves the most ink to the personal luxury market, the second largest at 283 billion ($322 billion) in sales, up 29% over 2020 to end the year +1% ahead of 2019. Seventy-three of the Top 100 companies reported growth in luxury goods sales in FY2021, compared to only 20 companies in FY2020. Commenting on the critical trends and themes for the luxury industry up to 2030, Federica Levato, partner at Bain & Company and leader of the firms EMEA Luxury Goods and Fashion practice, co-author of todays report, said: In their path to 2030, luxury brands will need to leverage their cultural avant-garde position and insurgent excellence to overcome the challenges ahead and shape the world. In contrast, Mainland China lost a little ground, dropping 1% from 2021. Global luxury goods market takes 2022 leap forward and remains poised Jewelry sales in 2022 are estimated to have risen to 28 billion, up 23%25% from 2021. Department stores declined by 8% and went from 18% SOM to 15% in 2021. Heels and formal shoes are now back to their 2019 levels. The competition will heat up, new players will rise, and consumer preferences will shift rapidly. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. Demand for luxury experiences has been improving, but this segment will be the last of the three to regain its 2019 levels, probably in 2023. FINANCIERE JIMENEZ Company Profile | COTTENCHY, HAUTS DE FRANCE, France I study the world's most powerful consumers -- The American Affluent, December 27, 2021 in London, England. The global ranking of luxury sales by region changed in 2022, as the Americas regained the top position for personal luxury goods sales. Our 11th annual report looks at the pandemics effects, the industrys impressive recovery, and the possibilities ahead. *I have read thePrivacy Policyand agree to its terms. 2022 Diversity, Equity, and Inclusion Report. Bookmark content that interests you and it will be saved here for you to read or share later. The Russian market was mostly inactive due to war-related suspension of operations. Personal luxury goods market to reach $378B by 2025: Bain Globally, things should go back to normal between 2023 and 2024. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. Bain and Company and the Italian trade association Fondazione Altagamma are out with their 2021 study of the global luxury market. Your email address will not be published. But with more turbulence ahead, the power luxury brands are best positioned to power on through. And finally, Bains positive growth projections hinge on Chinese consumers and their continued appetite for luxury brands. Global luxury goods market takes 2022 leap forward and remains poised These domains are rich with opportunities for luxury brands but investments for future growth are crucial.". For any questions or to arrange an interview, please contact: Gary Duncan (London) Email: [emailprotected], Orsola Randi (Milan) Email: [emailprotected]Tel: +39 339 327 3672. As they seek new ways to connect with their customers, they are changing their approach and mindset by incorporating sustainability and digitalization into their long-term strategies, to align with consumers demands and new regulatory requirements. South-east Asia and Korea are winning in terms of growth and potential. from 8 AM - 9 PM ET. The composite luxury goods sales of the Top 5 companies grew by 91% over the five years FY2016-FY2021. "):200==n.status?e("#nl2go_form").html("You are already subscribed. *I have read thePrivacy Policyand agree to its terms. The luxury market now appears better equipped to cope with economic turbulence, thanks to a consumer base that is both larger and more concentrated on top customers who are less sensitive to downturns. In spite of 110% year-over-year growth at current exchange rates, sales were still down 7% from their 2019 level. India Private Equity Report 2023 | Bain & Company This article is a preview of the Top 5 companies listed in the upcoming Global Powers of Luxury Goods 2022, which will be published in late 2022. Commenting on the critical trends and themes for the luxury industry up to 2030, Federica Levato, partner at Bain & Company and leader of the firm's EMEA Luxury Goods and Fashion practice, co-author of today's report, said: "In their path to 2030, luxury brands will need to leverage their cultural avant-garde position and insurgent excellence to overcome the challenges ahead and shape the world. Yet luxury brand players are continuing to invest in future growth, even in the face of high inflation and rising costs, so that their profitability is slightly decreasing, following an unprecedented increase in 2021. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. Internationally, secondhand growth was aided by sustained demand for watches, which account for 60%70% of the total market. This article is a preview of the Top 5 companies which will be listed in the upcoming Global Powers of Luxury Goods 2022. Now more than ever, the industry is facing paradigm shifts in all areas: production and resources, life cycle, customer relationships, corporate responsibility, and globalization. When typing in this field, a list of search results will appear and be automatically updated as you type. Online should become the leading channel for luxury purchases with an estimated 32%34% market share, followed by monobrand stores (30%32% market share). Luxury sales to grow at least 5% this year - Bain | Reuters We earned a platinum rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 1% of all companies. The coming years will see a further blurring of the boundaries between 'mono-brand' and ecommerce, which will increasingly push brands to take an 'Omnichannel 3.0' approach, enabled and enhanced by new technologies. The high-end furniture and housewares market reached 53 billion, up 13% from 2021. India stands out; its luxury market could expand to 3.5 times todays size by 2030, propelled by younger customers and an expanding upper and middle class. This could include revenues generated by: the metaverse and NFTs (such as through collectibles and other new products and services); the monetization of communities (through virtual events and data monetization, for instance); brand-related media content (such as movies, music, and art); secondhand luxury goods (by bringing more secondhand sales in-house, for instance); and. Tech-enabled profit pools and strong generational trends to drive 60%+ market growth to 2030. All of the Top 5 companies saw their luxury goods sales rebound in FY2021, as the impact of the COVID-19 pandemic on consumer demand, retail and supply chain constraints reduced. Latin America experienced solid growth, especially in Mexico and Brazil. Brands invested heavily (and successfully) to fuel demand. We therefore forecast that the market value of personal luxury goods will rise to between 540 billion and 580 billion by the end of the present decade, from an estimated 353 billion in 2022an increase of more than 50%. DTTL (also referred to as Deloitte Global) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. Although there will never be another China in terms of growth contribution to the industry, India and emerging Southeast Asian and African countries have a significant potential nevertheless. Online sales rose 20% from 2021 to 2022 to reach an estimated 75 billion. The global luxury goods industry overall is projected to achieve a market value of some 1.4 trillion in sales revenue this year, growing by 21%from 2021 (at current exchange rates), according to the latest Bain & Company report with Altagamma, the Italian luxury goods manufacturers' industry association. While he believes that Chinese luxury brands will not suddenly replace aspiration for Western luxury brands, he cautioned, There are clear signs that a fundamental shift is happening, and like so many disruptions in the luxury space it is being driven by Gen Z.. The leather goods category has benefited from a generalized price increase (from the most expensive products to entry-level items) that didnt hamper volume growth. Although there will never be another China in terms of growth contribution to the industry, new markets (such as India and emerging Southeast Asian and African countries) have significant potential, assuming their luxury shopping infrastructure can evolve quickly enough. The personal luxury goods industry, in particular, saw a further growth acceleration this year, coming on the heels of the V-shaped rebound enjoyed in 2021, the research shows. Some tourists bounce back over the summer. Retail continued to grow faster than wholesale and reached parity in terms of market share. The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. Sales are set to hit a new record in 2022, with the market forecast to grow by 22% at current exchange rates to 353 billion. They are expected to account for between 40% to 45% of purchases by 2025 when the China mainland will overcome the Americas and Europe as the worlds largest market. The higher and top end of the luxury market is also expanding at the same time and accounted for some 40% of market value in 2022 compared with 35% last year, with these consumers hungry for unique products and experiences, and putting brands VIC (Very Important Client) strategies into overdrive. In this webinar, Nirad Jain and Kara Murphy, co-leads of Bain's Healthcare Private Equity practice, share key takeaways from our 2023 Global Healthcare Private Equity Report, and dive into the macroeconomic forces and geopolitical dynamics shaking up the industry. The worlds Top 5 luxury goods companies generated revenues of US$122 billion in FY2021. This article is a preview of the Top 10 companies listed in the upcoming Global Powers of Luxury Goods 2022, The top 5 companies are the powerhouses of luxury brand sales, About the Global Powers of Luxury Goods report, Global Powers of Luxury Goods | Deloitte | global economy, Luxury Consumer, Infrastructure, Transport & Regional Government, Telecommunications, Media & Entertainment, update your settings to accept analytics and performance cookies. The study reveals that some of the consumption fundamentals of China will go through changes. Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. Stay ahead in a rapidly changing world. In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. Taken together, the study characterizes these trends as the 'nouvelle vague' or 'new wave' of developments for the sector. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. Global Powers of Luxury Goods 2022. Luxury Goods: trends and predictions for 2022 (Bain Report) The secondhand luxury goods market rose to 43 billion in 2022. The fine art market grew 13% to 39 billion, as the ranks of potential buyers swelled and new Asian art hubs strengthened. As in last years report, there will be a section on the impact of COVID-19 on financial results. There are sectors that were affected by the pandemic much more, and one of them is experiences. The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. Sales of luxury cars, the biggest portion of the overall market, hit a new record, reaching an estimated 566 billion, 6% more than 2021 at current exchange rates and 3% above 2019. The performance of the last quarter of this year, in determining the final outcome for 2022, will largely depend on the progressive lifting of Covid-19 pandemic restrictions in China, as well as evolution of European and American luxury consumer confidence in the face of rising inflation and cost of living pressures, and potential recession in the US and European economies, the report notes. Success online at least partly depends on the amount of advertising dollars pumped into online channels. Globally the Americas (31% SOM) and China (21% share) will top 2019, up 12% and 3% respectively, but Europe (-10% with 25% share) and Japan (-9% with 7% share) will remain underwater. Luxury yacht orders rose to a record level, amid solid growth in deliveries. The top growth drivers are Chinese consumers in China, online channels and younger generations. 1 Richemonts FY2021 financial year ended in March 2021, so saw a greater negative impact of the COVID-19 pandemic on their FY2021 results compared with other Top 5 companies which had later year end dates. Unfortunately, it doesnt show signs of improving sooner than in 2024 back to its 2019 levels. "):e("#nl2go_form").html("Unexpected error. Bain estimates that global sales of personal luxury goods will reach at least 305 billion euros ($320 billion) this year, according to its most conservative estimate and up to 330 billion. The year of 2021 confirmed Chinas growing importance in luxury, together with a bright evolution for European and American customers. Banks should adapt lending strategies to account for - bain.com Local consumptions are strong everywhere. China represented 12 percent of total sales in 2022, but Luca Lisandroni, the company's co-CEO, is already calling 2023 a "golden year" for the China market. INTERNATIONAL. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. In 2021, they accounted for around 30% of new customers that entered the market since 2019, which is a total of 25% of the Personal Luxury Goods market. Shoes grew by 20%22% compared with 2021 to reach 28 billion. Meanwhile, China, which remains crucial to the long-term future of the luxury market, was challenged due to Covid lockdowns, and sales are likely to be down vs. 2021. Boosted by a strong market performance across quarters, and despite macro-economic indicators worsening globally, as well as specific challenges in China, the personal luxury sector is set to see the value of its sales jump to 353 billion in 2022, marking an advance of 22% at current exchange rates (or 15% at constant exchange rates) versus the previous year, the study projects. The personal luxury goods industry, in particular, saw a further growth acceleration this year, coming on the heels of the V-shaped rebound enjoyed in 2021, the research shows. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. Takeaways from Bain's 2023 Global Healthcare Private Equity and M&A Report For any questions or to arrange an interview, please contact: Gary Duncan (London) Email: gary.duncan@bain.com, Orsola Randi (Milan) Email: orsola.randi@bain.com Tel: +39 339 327 3672. A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. The US luxury market proved very strong in 2022. MILAN, Nov. 15, 2022 /PRNewswire/ -- The global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. The major brands moved aggressively into the online space over the past two years, which grew from 12% share of the personal luxury market in 2019 to 22% in 2021, a stunning 38% uptick since 2019. Personal Luxury Goods Market Has Recovered Ahead Of Schedule - Forbes Luxury brands have faced three years of tremendous turbulence and uncertainty, but the industry shows more strength, resilience, and ability to innovate than before. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Air Travel Forecast to 2030: The Recovery and the - Bain & Company After 20 years of large expansion and deep evolution, Covid-19 has fast forwarded and anticipated some of the key changes for the next 20 years of the global luxury market. Their performance across geographies and product sectors is based on publicly available data for FY2021 (which we define as financial years ending within the 12 months from 1 January to 31 December 2021). The overall luxury industry tracked by Bain & Company encompasses both luxury goods and experiences. All personal luxury goods categories have now recovered to 2019 levels or better, with hard luxury, leather, and apparel leading the resurgence following the pandemic. From insights to the performance of the market, through estimates for the approaching us 2022, all the way up to some key recommendations this study contains data no one from the Luxury Goods industry should overlook. Intuitive service that goes beyond merely offering the human touch is becoming more crucial, and operators are increasingly looking to technology to automate predictable tasks and free employees to focus on the most important interactions. Sales growth accelerated to 28%, equivalent to 1.3 times the growth rate for new luxury goods. The growth was fueled by the greater emphasis consumers have been placing on their home lifeas both shelter and source of self-definitionsince the pandemic. In 2022, the luxury market generated positive growth for 95% of brands. None of this has stopped brands from investing in modernizing their operations, especially through more robust information technology infrastructure to support the ongoing digitalization of the industry, and through a reconfiguration of their store networks (primarily through renovation and relocation projects). Sales of private yachts and jets grew by 18% at current exchange rates relative to 2021, reaching 26 billion. Luxury spending trends in 2022 The overall luxury market tracked by Bain & Company comprises nine segments: luxury cars, personal luxury goods, luxury hospitality, fine wines and spirits, gourmet food and fine dining, high-end furniture and housewares, fine art, private jets and yachts, and luxury cruises. Chinas luxury market is expected to recover between H1 and H2 2023. According to the latest Bain & Company Study with Altagamma, the segment will continue to expand until 2030 despite the . Strong cross category, generation and price growth. , describes them. We expect that solid market fundamentals will result in annual growth rates between 5% and 7% until 2030. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. Fondazione Altagamma is led by Matteo Lunelli, who was named chairman in 2020. Global luxury markets include items and services like personal luxury goods, cars, hospitality, gourmet food & fine dining, fine art, private jets & yachts, and even luxury cruises. Meanwhile, China itself, which remains crucial to the long-term of the luxury market, continues to confront a challenging phase due to Covid lockdowns and is still performing below 2021 figures. Here it comes: the second stage of our E-commerce Germany Awards 2022! The global luxury goods industry overall is projected to achieve a market value of some 1.4 trillion in sales revenue this year, growing by 21% from 2021 (at current exchange rates), according to the latest Bain & Company report with Altagamma, the Italian luxury goods manufacturers' industry association.