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15 Nov

Global Luxury Goods Market Seen Growing 21% in 2022

MILAN — Despite all of the uncertainties, the worldwide luxury goods industry continues to grow and is predicted to further expand in 2023 and until 2030.

In accordance with the newest Bain & Company Luxury Study in collaboration with Fondazione Altagamma, presented in Milan today, the worldwide luxury goods industry overall is projected to realize a market value of around 1.4 trillion euros in sales in 2022, up 21 percent from the previous 12 months.

Specifically, the non-public luxury goods industry is poised to see revenues climb 22 percent to 353 billion euros in 2022 in comparison with 2021.

The performance of the last quarter of this 12 months will largely rely on the progressive lifting of COVID-19 restrictions in China, and the patron confidence of European and American luxury consumers as inflation rises.

The private luxury market is forecast to see a growth of no less than 3 to eight percent next 12 months, even given a downturn in global economic conditions, and by 2030 the market value is predicted to climb to around 550 to 570 billion euros, an increase of 60 percent or more in comparison with 2022.

The luxurious market is ready to be more resilient to recession next 12 months than through the 2009 global financial crisis.

“Within the second half of 2008, consumer confidence in luxury was down and there was a dose of luxury shaming, while the client attitude now’s different, and sustained almost all over the place, with big tickets and an elevated selection of product,” said Federica Levato, partner at Bain & Company, leader of its EMEA Luxury Goods and Fashion practice, and co-author of the report.

Also, Levato pointed to a bigger and more global customer base, because the Chinese market was still small in 2008 and 2009.

She also noted that firms, having undergone COVID-19, are more prepared to directly engage customers and proceed to take a position in activations and marketing, in digital and physical technologies, even within the face of high inflation and rising costs, which lead their profitability to barely decrease on the back of growing sales, following an unprecedented increase in 2021.

“The nouvelle vague – the brand new wave – of the luxurious goods market will demand evolution amid disruption, adaptation amid uncertainty, and an expansion of creativity in all the basics – all while latest trends and ideas develop”, said Claudia D’Arpizio, a Bain & Company partner, leader of Bain’s Global Luxury Goods and Fashion practice, and the lead writer of the study. 

In coming years, the spending of Gen Z and ‘Gen Alpha’ is ready to grow some 3 times faster than for other generations until 2030, making up a 3rd of the market.  That is, partially, driven by a more precocious attitude toward luxury, with Gen Z consumers beginning to buy luxury items some three to 5 years sooner than Millennials, and Gen Alpha expected to behave in the same way.

Levato said that firms can have to now take care of latest priorities: ESG, creativity chain, technology and data. “These domains are wealthy with opportunities for luxury brands – but investments for future growth are crucial.”

The study also points to other key trends, corresponding to a return to physical retail, which was “not unexpected,” said Levato. “We factored this in in previous estimates, believing that when tourism restarted, it could be normal to return to stores.”

The U.S. and Europe have been showing strength, but there are also latest markets which might be showing potential, corresponding to South East Asia and Korea. India and emerging South East Asian and African countries have a major potential, although they should improve their infrastructure, the study stated.

China stays crucial to the luxurious market, but remains to be performing below 2021 figures, because of the continuing restrictions,  and is predicted to recuperate between the primary and second half of 2023.

The luxurious market’s consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. The upper and top end of the luxurious market have been expanding and accounted for some 40 percent of market value in 2022 compared with 35 percent in 2021.

Levato said all luxury categories have now recovered to 2019 levels or higher, with hard luxury, leather goods and apparel leading the resurgence following the pandemic.

“There may be a shift to the ‘post-streetwear’ era, which maintains some elements corresponding to gender fluidity, occasion-less apparel, inclusivity and sports-driven inspiration, but goes beyond its style codes through latest and enhanced techniques, materials and functionalities, corresponding to sartorial and casual integration, high tech and sustainable fabrics,” concluded Levato.

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