Brands invested heavily (and successfully) to fuel demand. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. The impact of a possible global recession on the industry in 2023 could differ from the impact of the 200809 global financial crisis. 'Gen Y' and 'Gen Z' accounted for the entire growth of the market in 2022, it notes. Prospects for personal luxury goods market out to 2030 are also highly positive, todays analysis concludes. 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. 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. Sales of secondhand watches, estimated at an additional 2530 billion, rapidly grew in 2022, fueled by the appetite of Generation Z and millennials for investment and resale opportunities, given the high resilience of the category during crises. 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 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. Latin America experienced solid growth, especially in Mexico and Brazil. 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. In keeping with greater social interest in diversity, equity, and inclusion, galleries and collectors focused more on areas such as women artists and African art. The economic model will continue to evolve. These are key findings from the 21st edition of the Bain & Company-Altagamma Luxury Study, a collaboration between Bain & Company and Fondazione Altagamma, the trade association of Italian luxury goods manufacturers. Moreover, Gen Y and Gen Z are expected to contribute roughly 180% of the total growth from 2019 to 2025. But with more turbulence ahead, the power luxury brands are best positioned to power on through. Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. 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. 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. Sales of fine wines and spirits hit 96 billion, up 16% on 2021. In 2021, profits are already back at 2019 levels. If we have selected the wrong experience for you, please change it above. "):200==n.status?e("#nl2go_form").html("You are already subscribed. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. 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. Now, brands are multi-price points to answer to different customer needs. The study reveals that some of the consumption fundamentals of China will go through changes. 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. And finally, Bains positive growth projections hinge on Chinese consumers and their continued appetite for luxury brands. 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 other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Retail continues to dominate, while online channels are seeing a normalization in their growth. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. 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. Generation Y (millennials) and Generation Z accounted for all of the markets growth in 2022. There are few sources for data-driven insights to help consumer businesses understand and navigate these fast-changing times. The nonfungible token (NFT) market stabilized after a wave of speculative interest from investors. Meanwhile, the effect of the airline industry's CO2 mitigation costs has already begun to reshape medium- to long . More specifically, they make up for almost 50% of the whole market. Core high quality design market, already showing stronger-than-forecasted performance in last quarters of 2020, continuing on its growth path sustained by continued refocus of consumer spending on home, in particular on Living& Bedroom, outdoor and lighting. 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. Chinas luxury market is expected to recover between H1 and H2 2023. Small leather goods gained further traction. 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. The overall luxury industry tracked by Bain & Company encompasses both luxury goods and experiences. 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. The personal luxury goods market reached an estimated 113 billion in the Americas, growing 25% over 2021. 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. 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. Online and monobrand, key channels for 2021 recovery, will lead the mid term growth of the industry. Older generations will be permanently leaving the luxury market. Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. Hong Kong and Macau were weaker spots, while Taiwan slowly recovered. We expect that solid market fundamentals will result in annual growth rates between 5% and 7% until 2030. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. 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. Bain & Company is a global consultancy that helps the worlds most ambitious change makers define the future. data regarding the outbreak of Covid-19 and consequential lockdowns across countries; macroeconomic data (e.g., GDP, consumer confidence index) and latest forecasts; current trading performance from relevant luxury industry players; annual reports, quarterly results, and analyst reports; and. 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. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Online sales rose 20% from 2021 to 2022 to reach an estimated 75 billion. Please read and agree to the Privacy Policy. Download By Bain & Company Scope: Global Mar 13, 2022 By Claudia D'Arpizio, Federica Levato, Filippo Prete, and Jolle de Montgolfier. 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. With 2022 already knocking on our doors, it's time to step into another year full of new and interesting trends, figures and actions for the Luxury Goods market. Heels and formal shoes are now back to their 2019 levels. 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. Read the report. 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. 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. The year of 2021 confirmed Chinas growing importance in luxury, together with a bright evolution for European and American customers. One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. Post-streetwearis emerging as the new look. Spirits grew faster than wine, with status spirits growing internationally and across categories, tapping into usage occasions once reserved for wines. Bain: China's Luxury Market Contracted 10 Percent in 2022 The consultancy firm expects growth in the sector to resume in 2023, with sales returning to the 2021 level as soon as the first. South Korea back to 2019 levels: full repatriation of local customers over-compensate for the lack of tourism. You may opt-out by. 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. Over-performance of all categories, restocking wardrobe in the rising post-streetwear era. 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. The customer centricity honed in recent years is another source of resilience for the industry, as is the multi-touchpoint ecosystem that luxury has developed. Art-based NFTs still represent a limitedalbeit expandingportion of the overall market; artists are looking for ways to meaningfully integrate NFTs into fine arts. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (DTTL), its global network of member firms, and their related entities (collectively, the Deloitte organization). Sales growth accelerated to 28%, equivalent to 1.3 times the growth rate for new luxury goods. 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. Over-performance of all categories, restocking wardrobe in the rising "post-streetwear" era. 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. Analysis of financial performance and operations for financial years ended through 31 December 2021 using company annual reports, industry estimates and other sources. The start-up world also became a less secure option for innovation talent during this period, with investment size falling and the number of start-up investments dropping 59%, from 14,400 in the last quarter of 2021 . Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. 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. But the Global State of the Consumer Tracker makes it easy for you to access consistent, high-quality data on consumer sentiment and behavior in retail, consumer products, automotive, and travel. South-east Asia and Korea are winning in terms of growth and potential. Monobrand stores were boosted by the willingness of customers to return to in-person shopping. 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 global luxury goods market took a leap forward in 2022, despite uncertain market conditions. The companies making up the Top 5 have been relatively stable, with only LOral Luxe entering the Top 5, replacing Richemont*, Chart 1: Luxury goods sales US$ million: FY2016 & FY2021. Read More USD 1,325 Add To Cart Required fields are marked *. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. But what's the current scenario? People under 40 years old will remain main drivers for growth up to 2020 in the luxury goods market. 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. The secondhand luxury goods market rose to 43 billion in 2022. China's luxury market is expected to recover between H1 and H2 2023. Gen Y and Gen Z accounted for the entire growth of the market in 2022, it notes. The market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. Art benefited from being seen by the wealthy as an alternative asset to hedge against volatility in financial markets. from 8 AM - 9 PM ET. 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. When segmented into goods vs. experiences, spending continued to skew to tangible products in 2022. Unfortunately, it doesnt show signs of improving sooner than in 2024 back to its 2019 levels.