Despite economic and geopolitical challenges, the global luxury market reached a record €1.5 trillion in 2023, driven by a resurgence in luxury travel and a strong US holiday season. However, the first quarter of 2024 experienced a slowdown due to macroeconomic pressures, with Japan being a notable exception thanks to a tourism boom. These insights come from the latest Bain & Company Luxury Goods Worldwide Market Study, released in collaboration with Altagamma, the Italian luxury goods manufacturers’ association.
Jewellery emerged as a top performer in this complex landscape, with investment-led purchases driving growth beyond that of watches. The sector’s strength spans both ultra-luxury and entry-level segments, appealing to a broad spectrum of consumers.
China’s market is under pressure due to two primary factors: the revival of outbound tourism and weakening local demand caused by rising economic uncertainties. The latter is undermining middle-class consumer confidence, leading to “luxury shame” behaviour similar to what occurred in the Americas during the 2008-09 financial crisis. Likewise, the US continues to face with macroeconomic pressures despite signs of gradual improvement in GDP and consumer confidence.
While Europe and Japan have shown resilience due to tourism, China’s market is under pressure from revived outbound tourism and weakening local demand. In the US, macroeconomic challenges persist despite some signs of recovery.
The study also notes a dichotomous consumer strategy: Gen Z is delaying luxury spending due to economic uncertainties, while Gen X and Baby Boomers are increasing their expenditures. Luxury brands are focusing on top clients through large-scale events and expanding into new areas like sports, with the 2024 Paris Olympics serving as a key platform.