Three of the Top 5 companies are based in France. 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. 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. South-east Asia and Korea are winning in terms of growth and potential. 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. Success online at least partly depends on the amount of advertising dollars pumped into online channels. 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. Despite worsening macroeconomic indicators globally and specific challenges in China, the sector performed strongly across quarters, and it is likely to have reached 353 billion in retail sales value in 2022, marking an advance of 22% at current exchange rates (or 15% at constant exchange rates) vs. 2021. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. Already it is about half the size of each of the three leading personal luxury goods categories leather accessories, beauty and apparel and its 27% growth from 2019 leaves every other personal luxury goods category in the dust. 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. "):e("#nl2go_form").html("Unexpected error. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. 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. 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. Lighting and living/bedroom categories benefited the most, as consumers looked for more comfort, functionality, and beauty. Bookmark content that interests you and it will be saved here for you to read or share later. The study reveals that some of the consumption fundamentals of China will go through changes. In contrast, Mainland China lost a little ground, dropping 1% from 2021. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. More troubling is they are expected to continue on a downward curve through 2025 when they will hold only between a 10% to 12% share each. 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. The competition will heat up, new players will rise, and consumer preferences will shift rapidly. A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. Beauty (60 or $68 billion) and watches (40 or $45 billion) will be flat and apparel (57 or $65 billion) will remain -5% down relative to 2019. What other changes can we expect looking at consumers age? Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. According to report co-author . Retail continues to dominate, while online channels are seeing a normalization in their growth. Sustainability remains a focus for both consumers and shipyards, from greener propulsion systems to design-for-disassembly solutions that make yacht materials more recyclable. We work with ambitious leaders who want to define the future, not hide from it. Demand for personalization and digital connectivity rose. SEA is still suffering from a lack of tourism. We expect that solid market fundamentals will result in annual growth rates between 5% and 7% until 2030. As a result, two scenarios could play out in 2023, with sales growth in the personal luxury goods market ranging from 3% to 5% in the base case and up to 6% to 8% (at constant exchange rates) in a more positive case, depending on the strength of economic recovery in China and the ability of the US and Europe to withstand economic headwinds. Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. The retail channel has now reached parity with the wholesale channel. Travel retail is in recovery mode, at least in Western markets, but not yet back on its pre-Covid track. 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. But despite present and continuing economic challenges, the luxury market continued to perform strongly throughout this year to date, with winners for brands across the board, and positive growth for some 95% of brands, today's report concludes. These consumers are hungry for unique products and experiences, putting brands VIC (very important client) strategies into overdrive. With digital advertising expenses growing and more power brands moving into the space Magna reports global digital media grew by nearly one-third year-over- year in 2021 smaller brands cant begin to match the online marketing muscle of the major brands. Department stores experienced faster growth than in previous years, gaining 20%. 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 luxury market's consumer base is broadening with some 400 million consumers in 2022 expected to expand to 500M by 2030. 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. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling todays urgent challenges in education, racial equity, social justice, economic development, and the environment. And yet, underneath the topline results are other findings that should give one pause, specifically how the balance of power in the luxury market is now firmly in the hands of the power brands, as Steve Sadove, former CEO of Saks and currently advisor to Mastercard Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. 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. *I have read thePrivacy Policyand agree to its terms. The top wealth segments stand out more now than ever before a . Jewelry sales in 2022 are estimated to have risen to 28 billion, up 23%25% from 2021. What will it bring? Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American, New Bain & Company-backed venture aims to help companies better trace data, achieve sustainability goals, ESG activities correlate to stronger financial performance, reveals new study from Bain & Company and EcoVadis. All rights reserved. Over-performance of all categories, restocking wardrobe in the rising "post-streetwear" era. The spending of Gen Z and the even younger Generation Alpha is set to grow three times faster than other generations through 2030, making up a third of the market. Stay ahead in a rapidly changing world. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. 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 other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. Global Luxury Goods Market Seen Growing 21% in 2022 to 1.4 Trillion Euros. The luxury markets consumer base is broadening with some 400 million consumers in 2022 expected to expand to 500M by 2030. Prospects for personal luxury goods market out to 2030 are also highly positive, today's analysis concludes. Specialty retailers went from 20% share of the personal luxury goods market in 2019 to 16% in 2021, a 10% decline in sales. Your email address will not be published. *I have read thePrivacy Policyand agree to its terms. Despite the slow recovery process, however, the demand for experiences to be allowed back is higher than ever. Stay ahead in a rapidly changing world. But with the future of the luxury market now on the shoulders of next-generation customers, expected to represent 70% of global purchases by 2025, and these customers keen on sustainability, a shift from firsthand to secondhand luxury goods can be expected. All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. 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. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. In general, luxury brands have the chance to secure common prosperity, but they will need to challenge and adapt their strategy. The market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. Luxury hospitality, gourmet food and fine dining, fine art, private jets and yachts will remain below 2019 levels, though up compared to 2020. But what's the current scenario? Growth was steady across regions as people finally realized travel ambitions previously blocked by Covid, using money they couldnt spend on trips during the pandemic. 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. Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. Together, we achieve extraordinary outcomes. This is, in part, driven by a more precocious attitude towards luxury, with Gen Z consumers starting to buy luxury items some 3 to 5 years earlier than Millennials (at 15 years-old, versus at 18-20), and Gen Alpha expected to behave in a similar way. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. India Private Equity Report 2023. 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. The analysis notes that, even with a possible global recession next year, the impact on the industry could be different from that of the 2008-2009 global financial crisis. The luxury market's consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. 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. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. South-east Asia and Korea are winning in terms of growth and potential. 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. Bain & Company is a global consultancy that helps the worlds most ambitious change makers define the future. Only luxury cruises are down relative to both 2019 and 2020. A powerful factor for sector growth in the rest of the decade will be generational trends,the analysis reports. The customer is going to shop and going to shop in different ways, Sadove affirms. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. Bain Warns China Luxury Growth to Further Decelerate in 2022 As China began to crack down on various sectors under the name of common prosperity, growth throughout the second half of 2021. The worlds Top 5 luxury goods companies generated revenues of US$122 billion in FY2021. INTERNATIONAL. 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. Examples include: acceleration of middle class and consumption upgrade, pressure on uber-wealth, delayed spending given current uncertainty. But with more turbulence ahead, the power luxury brands are best positioned to power on through. "Luxury is back to the future" is the title of the latest market study worldwide by Bain - Altagamma. 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. If we have selected the wrong experience for you, please change it above. Online and monobrand, key channels for 2021 recovery, will lead the mid term growth of the industry. 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. You may opt-out by. Luxury is back to the future is the title of the latest market study worldwide by Bain Altagamma. (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. Local consumptions are strong everywhere. 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. Photo: Shutterstock Around 21 per cent of global consumer spending on luxury goods in 2021. Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. 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. Strong market share shift towards European brands. Monobrand stores were boosted by the willingness of customers to return to in-person shopping. 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. Consumption was very strong in Europe. While US luxury market is still strong, and Europe managed to recover beyond 2019 thanks to solid local demand alongside an extra-boost from US and Middle Eastern tourist shoppers, new markets are surprising the industry. Your email address will not be published. Europe managed to recover beyond pre-Covid 2019 levels thanks to solid domestic demand, alongside a boost from US and Middle Eastern tourist shoppers. The study also reinforced previous projections that China and Chinese consumers will become the dominant force in global luxury by 2025 (see below). Beauty reached 69 billion, up a mere 14%16% on 2021 (but still double its pre-Covid growth rate in 2019). However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. Heels and formal shoes are now back to their 2019 levels. When typing in this field, a list of search results will appear and be automatically updated as you type. Sales of new watches grew by 22%24% and reached a record 52 billion, reflecting solid demand for top-of-the-range models and iconic pieces, but growth was capped by low product availability. 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 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. 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. 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. 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. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Over-performance of all categories, restocking wardrobe in the rising post-streetwear era. Performance was particularly robust in the first half of the year. 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 prospects for personal luxury goods out to 2030 are positive. The luxury markets consumer base will expand from some 400 million people in 2022 to 500 million by 2030. Fine art market rebounding thanks to gradual reopening of public auctions and art fairs. Agile and proactive brands that are radically customer-centric have a chance to win, he advised. 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. Please read and agree to the Privacy Policy. Interestingly enough, the pandemic caused this market to experience its worst dip in history. 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. Hong Kong and Macau were weaker spots, while Taiwan slowly recovered. 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. Carina Lau, Pansy Ho, Michelle . Opinions expressed by Forbes Contributors are their own. Uber-luxury jewelry outperformed globally, as did iconic pieces and lines. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. 3.0 experiences (such as virtual stores, digital shopping assistants, and ultra-luxury travel and hospitality). The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. 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. 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. continued focus for large established brands, with few exceptions intercepting the next gen of customers. The access to the reports is reserved to Altagamma Companies. Here it comes: the second stage of our E-commerce Germany Awards 2022! Spending on experiences will be the last luxury outlay to recover historical highs given its reliance on the resumption of international tourism and business travel. The Middle East is very strong throughout markets, with Dubai and Saudi Arabia leading growth. LONDON, ENGLAND - DECEMBER 27: A woman holds a Louis Vuitton shopping bag on Clifford Street on [+] December 27, 2021 in London, England.

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