Worst dip in history for the personal luxury goods market: Personal luxury goods are items like jewelry, luggage, haute couture clothing, sports cars and more. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. Recent studies Altagamma Studies archive Bain and Company and the Italian trade association Fondazione Altagamma are out with their 2021 study of the global luxury market. Among the rising stars, India stands out; its luxury market could expand to 3.5 times todays size by 2030. The FY2021 composite net profit margin for the 78 Top 100 companies reporting net profits more than doubled to 12.2% year-on-year, higher than pre-pandemic levels. In May 2020, we began making regular forecasts of how soon aviation demand would recover from the effects of the Covid-19 pandemic. Luxury cars are still subject to supply chain disruption, with component shortages further heightened by the Russia-Ukraine war. Report. Omnichannel retailing and a major shift in passenger mix are poised to transform traditional airport shopping. 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. The economic model will continue to evolve. Opinions expressed by Forbes Contributors are their own. Analysis of financial performance and operations for financial years ended through 31 December 2021 using company annual reports, industry estimates and other sources. Some countries will finally see some long awaited recoveries: China, Japan and European countries. Federica Levato, Bain & Company's partner and the report's co-author, said: "The speed of future market growth will depend on luxury players' strategic responses to the current crisis and their ability to transform the industry on behalf of the customer.". 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. This generational factor is one of the critical trends affecting the development of the luxury market in 2022, and for the rest of the decade, that are highlighted by todays report. Retail continues to dominate, while online channels are seeing a normalization in their growth. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. Even in the face of recessionary conditions expected across leading economies into 2023, the Bain and Altagamma analysis forecasts further expansion in sales and market value for luxury goods through the coming year and decade. Travelers were lured not just to leading cities but also to out-of-the-way destinations, in keeping with the pandemic trend to seek rural solitude. Luxury yachts confirming positive momentum, with growth in deliveries paired with sharp growth in order books. The makeup and fragrances categories led growth. People under 40 years old will remain main drivers for growth up to 2020 in the luxury goods market. There are sectors that were affected by the pandemic much more, and one of them is experiences. Travel retail is in recovery mode, at least in Western markets, but not yet back on its pre-Covid track. 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. Interest from high-net-worth individuals continued to rise, reflecting a desire for deeper connections with nature and comfort; designs increasingly reflect these preoccupations, through features such as enlarged stern areas or a preference for explorer yachts able to sail to the remotest areas. Solid fundamentals are set to boost the markets value to between 540 billion and 580 billion by the end of the present decade, from an estimated 353 billion in 2022a rise of 50% or more. Globally, things should go back to normal between 2023 and 2024. Some tourists bounce back over the summer. 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%. Three of the Top 5 companies are based in France. That ratio has come down from 3.4 times in 2018. The market for personal luxury goodsthe core of the core of luxury segments and the focus of this analysissaw impressive growth in 2022, coming on the heels of the V-shaped Covid rebound enjoyed in 2021. Now, even as the pandemic's impact on air travel diminishes, inflation and lower disposable incomes have emerged as constraints on future growth. 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. 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. Spirits driving maret recovery thanks to growth in local consumers interest for Asian spirits, increasing interest for status spirits and better ability vs ine brands in catering interest of younger generations. Only luxury cruises are down relative to both 2019 and 2020. The second-hand luxury market, valued at $38 billion, is now also worth luxury's attention, as it is growing more than twice as fast as first-hand luxury. Strong cross category, generation and price growth. Asia (excluding Japan) switched to second position, followed by Europe. 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. "Luxury is back to the future" is the title of the latest market study worldwide by Bain - Altagamma. This market growth is driven by factors that go beyond aspiration, with consumers becoming more knowledgeable and choosy, and intensified competition for loyalty and advocacy. 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. One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. "):e("#nl2go_form").html("Unexpected error. (Photo by Hollie Adams/Getty Images). Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. The competition will heat up, new players will rise, and consumer preferences will shift rapidly. Read More USD 1,325 Add To Cart Online should become the leading channel for luxury purchases with an estimated 32%34% market share, followed by monobrand stores (30%32% market share). Within the personal luxury segment, only shoes (23 or $26 billion), jewelry (22 or $25 billion), and leather accessories (62 or $70 billion) will beat 2019 results, up 5%, 3% and 4% respectively. Together, we achieve extraordinary outcomes. 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. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. "):200==n.status?e("#nl2go_form").html("You are already subscribed. 2022 Diversity, Equity, and Inclusion Report. ")},function(n){console.log(n),e("#nl2go_form").html("Unexpected error")})})})}(jQuery); 2023 E-commerce Germany and E-commerce Berlin. By 2030, luxury should have expanded beyond its traditional business model, typically defined by sales of products, transcending an original form rooted in craftmanship and functional excellence. Download By Bain & Company Scope: Global Mar 13, 2022 In the United States, traditional luxury hubs gradually returned to growth while suburban areas retained their new prominence as a source of luxury sales. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. In coming years, the spending of Gen Z and Gen Alpha is set to grow some three times faster than for other generations until 2030, making up a third of the market. Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. That reflected a renewed value proposition in the US and successful reengagement with tourists in Europe. 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. Luxury goods leader LVMH increased its share of the Top 5 from 39.1% in FY2016 to 44.9% in FY2021. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Solid rebound, polarized between entry prices and tops items. International travel disruptions, duty-free opportunities, and digitalization continue to strengthen domestic spending in 2021. Now, brands are multi-price points to answer to different customer needs. Bookmark content that interests you and it will be saved here for you to read or share later. Sales of private yachts and jets grew by 18% at current exchange rates relative to 2021, reaching 26 billion. But because of its vast cultural and geo-political differences, China can be a risky bet for Western luxury brands. And it remains poised to see further expansion next year, and for the rest of the decade to 2030, even in the face of present economic turbulence, the 21st edition of the Bain & CompanyAltagamma Luxury Study, says today. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. 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. When it comes to the overall value of this market, luxury cars significantly outperform all of the other components combined. 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. A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. The apparel category grew by 22%24% in 2022, aided by wardrobe restocking. 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. Get your bi-weekly update on the e-commerce insights: console.log("1"),function(e,n,o,t,l,c,r){e.Newsletter2GoTrackingObject=l,e[l]=e[l]||function(){(e[l].q=e[l].q||[]).push(arguments)},e[l].l=1*new Date,c=n.createElement(o),r=n.getElementsByTagName(o)[0],c.async=1,c.src="https://static.newsletter2go.com/utils.js",r.parentNode.insertBefore(c,r)}(window,document,"script",0,"n2g"),n2g("create","yj76l2pj-nqhljzcz-qvj"),function(e){e(function(){console.log("1"),e("#nl2go_form").on("submit",function(n){n.preventDefault(),console.log("1");var o={email:e("input[name=email]").val()};console.log("1"),n2g("subscribe:send",{recipient:o},function(n){console.log(n),201==n.status?e("#nl2go_form").html("Succes! 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 industry is poised to see further expansion next year and for the rest of the decade to 2030, even in the face of economic turbulence. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. Struggling Australia which only recently reopened after months of lockdown. Examples include: acceleration of middle class and consumption upgrade, pressure on uber-wealth, delayed spending given current uncertainty. Translating wholesale and licensing revenue to its retail equivalent, Bain estimates global personal luxury goods sales will reach 283 billion ($324 billion) by year end, marking a 1% increase. The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. You may opt-out by. In the past year retailers faced some strong economic headwinds against the backdrop of an unpredictable virus and its resurging variants. The global luxury market is projected to grow by 21% in 2022, reaching 1.4 trillion; the personal luxury goods. The threats revolve mostly around understanding the winning value proposition, cracking operation complexity and defining logo and rebranding strategies. These wildcards secondhand luxury, next-gen consumers and China may continue to test the strength, resilience and agility that Bain observes has enabled luxury brands to overcome the tremendous turbulence of the past two years. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. Taken together, the study characterizes these trends as the 'nouvelle vague' or 'new wave' of developments for the sector. The luxury goods sales of the top two companies in FY2021 was more than the total luxury goods sales of the Top 5 in FY2016. Across 63 offices in 38 countries, we work alongside our clients as one team with a. Please enable JavaScript to view the site. The coming years will see a further blurring of the boundaries between monobrand outlets and e-commerce, which will increasingly push brands to take an omnichannel 3.0 approach, enabled and enhanced by new technologies. 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. Now distribution is split virtually down the middle, half through wholesale and half through retail. Cultural relevance and evolving values ask for a new value-creation model in customer engagement. What other changes can we expect looking at consumers age? Fashion ranking: Top 20 clothing retailers in Germany. The prospects for personal luxury goods out to 2030 are positive. Stay ahead in a rapidly changing world. LONDON, ENGLAND - DECEMBER 27: A woman holds a Louis Vuitton shopping bag on Clifford Street on [+] December 27, 2021 in London, England. That concludes the studys breathless reporting of the topline findings of the past year in luxury, saying, it has never seen a year of surging performance to match 2021.. BEIJING, Feb 7 (Reuters) - China's luxury market contracted 10% in 2022 on the year, snapping a five-year streak of high growth, as Beijing's zero-COVID policy and a slowing economy hit. Evolving luxury map: new cities emerging, large cities back and persisting suburban areas. But what's the current scenario? The study also reinforced previous projections that China and Chinese consumers will become the dominant force in global luxury by 2025 (see below). 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. But that too will favor power brands that have long practiced concessions, leaving emerging brands out in the cold. Between 2017 and 2021, the market size of second-hand luxury ballooned by 27 percent (first-hand luxury only grew by 12 percent over that same period.) Monobrand stores were boosted by the willingness of customers to return to in-person shopping. "The nouvelle vague thenew 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 D'Arpizio, a Bain & Company partner and leader of Bain's Global Luxury Goods and Fashion practice, the lead author of the study. Only fine wines and spirits (77 or $88 billion) and high-end furniture and housewares (45 or $51 billion) will exceed 2019 levels, up between 12% to 14% and 13% to 15% respectively. Weak Hong Kong vs mixed Taiwan and Macau. While the report states, there is still a place for rising stars in the industry, one wonders where? Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. And finally, Bains positive growth projections hinge on Chinese consumers and their continued appetite for luxury brands. Our 11th annual report looks at the pandemics effects, the industrys impressive recovery, and the possibilities ahead. Sadove suggests these numbers may not be as stark as they first appear. The luxury goods sales of the top two companies in FY2021 was more than the total luxury goods sales of the Top 5 in FY2016. Consumption was very strong in Europe. Hong Kong and Macau were weaker spots, while Taiwan slowly recovered. Driven by the dichotomic impact of pandemic outbreak in 2020, the luxury food market is showing significant difference in growth rates within its components. Later on in 2021 that dip turned into a V-shaped recovery, with the value in 2021 being slightly bigger than before the pandemic. The latest Bain-Altagamma Luxury Goods Worldwide Market Study forecasts increased resilience to recession after robust 2022 growth. Tech-enabled profit pools and strong generational trends to drive 60%+ market growth to 2030. Physical stores are distribution centers for online. Increasing market concentration, yet with high dynamism from rising stars. Abstracts are available in the press releases area. Consumer expectations for service levels are rising too, with brands embracing direct-to-consumer models to create a more luxurious shopping experience at every stage. The Russian market was mostly inactive due to war-related suspension of operations. This is a BETA experience. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today's urgent challenges in education, racial equity, social justice, economic development, and the environment. I study the world's most powerful consumers -- The American Affluent, December 27, 2021 in London, England. The customer is going to shop and going to shop in different ways, Sadove affirms. Online and monobrand, key channels for 2021 recovery, will lead the mid term growth of the industry. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. The luxury market's consumer base is broadening with some 400 million consumers in 2022 expected to expand to 500M by 2030. Department stores experienced faster growth than in previous years, gaining 20%. Local consumptions impacted by the slow vaccine adoption. Chinas luxury market is expected to recover by the second half of 2023. 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. Please see www.deloitte.com/about to learn more. 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. In 2022, the luxury market generated positive growth for 95% of brands. Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. Top 5 Five-year view The composite luxury goods sales of the Top 5 companies grew by 91% over the five years FY2016-FY2021. , describes them. 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. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. 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. Its not an either-or question but both. PARIS The luxury industry has shown resilience with a return to pre-COVID performance levels and an estimated sector growth of more than 6% between 2022 and 2026. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Moreover, Gen Y and Gen Z are expected to contribute roughly 180% of the total growth from 2019 to 2025. Iconic models and new hero products were the most desirable items. 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. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. Sales growth accelerated to 28%, equivalent to 1.3 times the growth rate for new luxury goods. Many of them reported sales above their pre-pandemic levels, driven partly by increasing e-commerce sales and the re-opening of physical stores. Brands invested heavily (and successfully) to fuel demand. The US and Europe still command the lions share of the market, but Asia (especially China) accelerated as consumer acceptance increased. Jewelry sales in 2022 are estimated to have risen to 28 billion, up 23%25% from 2021. South Korea back to 2019 levels: full repatriation of local customers over-compensate for the lack of tourism. 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. In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. When typing in this field, a list of search results will appear and be automatically updated as you type. 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. Luxury brands have faced three years of tremendous turbulence and uncertainty, but the industry shows more strength, resilience, and ability to innovate than before. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Young and affluent Chinese Gen Z consumers find local brands much more aspirational and desirable than millennials or Gen Xers, he wrote, as he observes the native Gen Z consumers are exceptionally proud of their Chinese culture heritage and its future potential. Beauty reached 69 billion, up a mere 14%16% on 2021 (but still double its pre-Covid growth rate in 2019). Read the report. 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. Monobrand websites gained further ground, raising their share to about 45% of the online segment, up from 43% in 2021. *I have read thePrivacy Policyand agree to its terms. Bains insights are based on triangulating information and sources available as of November 10, 2022, including: The scenarios do not consider disruptive changes to the Covid-19 status quo (e.g., potential future waves of Covid-19 related to variations of the virus) nor to the global sociopolitical situation. Mainland China should overcome the Americas and Europe to become the biggest luxury market globally (25%27% of global purchases). (Photo by Hollie Adams/Getty Images), Cinco De Mayo Is Only One Day, Yet Latino Consumers Deserve Attention All Year, Retail Alert: Philippines May Talk Trade As President Marcos Arrives In The USA, Gebr. These consumers are hungry for unique products and experiences, putting brands VIC (very important client) strategies into overdrive. Get the latest business insights from Dun & Bradstreet. If we have selected the wrong experience for you, please change it above. Over the past twenty years, wholesales share of the market dropped by 72% in 2010 to 51% in 2021, with the biggest drop from 2019 when it declined from 60%.

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