A deliberate (and effective) elevation strategy has driven a progressive price increase across the leather categoryaccounting for about 60% of 201922 growthwithout damaging volume growth. 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 today's report. Asia (excluding Japan) switched to second position, followed by Europe. Across 64 cities in 39 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. Shoes grew by 20%22% compared with 2021 to reach 28 billion. Monobrand websites share grew from 30% in 2019. The customer is going to shop and going to shop in different ways, Sadove affirms. Personal Luxury Goods Market Has Recovered Ahead Of Schedule - Forbes 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. The luxury market now appears better equipped to cope with economic turbulence with its consumer base both larger and more concentrated, and customer-centricity and a multi-touchpoint ecosystem set to provide resiliency amid disruptions, the report finds. Beauty companies Este Lauder and LOral Luxe have seen slower growth in the sales of their owned and licensed luxury goods brands than multiple luxury goods companies LVMH, Kering and Chanel. 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. South Korea back to 2019 levels: full repatriation of local customers over-compensate for the lack of tourism. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. Increasing market concentration, yet with high dynamism from rising stars. Sadove suggests these numbers may not be as stark as they first appear. 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. 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. Required fields are marked *. Shoes, leather, jewelry, watches, beauty and apparel these categories can expect changes, with the highest growth between 2019 and 2021 being the shoes category. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. In addition to exploring the trends impacting the luxury goods market, the report will identify the hundred largest personal luxury goods companies (owned or licensed luxury brands). Only luxury cruises are down relative to both 2019 and 2020. Spirits grew faster than wine, with status spirits growing internationally and across categories, tapping into usage occasions once reserved for wines. Stay ahead in a rapidly changing world. 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. 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. 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. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. Omnichannel retailing and a major shift in passenger mix are poised to transform traditional airport shopping. Now, even as the pandemic's impact on air travel diminishes, inflation and lower disposable incomes have emerged as constraints on future growth. 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. The global luxury market is projected to grow by 21% in 2022, reaching 1.4 trillion; the personal luxury goods. These domains are rich with opportunities for luxury brands but investments for future growth are crucial.". 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. The prospects for personal luxury goods out to 2030 are positive. 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. And the data is continually updated so that you can track current trends. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. 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. 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. Across 63 offices in 38 countries, we work alongside our clients as one team with a. 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. 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. Bain Warns China Luxury Growth to Further Decelerate in 2022 China chic is only trouble for brands that continue doing what they always did. 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. Southeast Asia and South Korea have been excelling in both growth and future potential. Luxury Fashion Industry Recovery 2022 Bain Report | Hypebae 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. Luxury Goods: trends and predictions for 2022 (Bain Report) This reports reveals and describes what they are: China doubling and Americas booming, Europe and Japan are still in recovery mode. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. 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. There are few sources for data-driven insights to help consumer businesses understand and navigate these fast-changing times. The market was constrained by prolonged Covid lockdowns in the second quarter, which affected consumer confidence and resulted in lackluster performance across all categories and channels (including online). 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. 2023. 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. 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. A report by Bain & Company reveals China is set to become world's largest luxury market by 2025. According to the latest Bain & Company Study with Altagamma, the segment will continue to expand until 2030 despite the . Despite the slow recovery process, however, the demand for experiences to be allowed back is higher than ever. 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. "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. The luxury market's consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. The global ranking of luxury sales by region changed in 2022, as the Americas regained the top position for personal luxury goods sales. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. 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. Power Luxury Brands Take Control Of The Luxury Market In 2021, Leaving 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! Some countries will finally see some long awaited recoveries: China, Japan and European countries. 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. As sales of secondhand goods on online platforms soared, brands are moving to increase their direct control of the market. Brands invested heavily (and successfully) to fuel demand. The New ROI: Defy Uncertainty by Boosting Return on Innovation | Bain The share of top customers has been expanding and accounted for some 40% of market value in 2022, compared with 35% last year. South-east Asia and Korea are winning in terms of growth and potential. 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.
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