The personal luxury goods industry has come roaring back, experiencing a V-shaped recovery in 2021, noted Bain & Company, a global consultancy. After a sharp contraction in 2020, the personal luxury goods market grew by 29% at current exchange rates to hit \u20ac283 billion, increasing the size of the market by 1% versus 2019 levels. For the future, Bain & Company estimates that the personal luxury goods market could reach \u20ac360-380 billion by 2025 with a sustained growth of 6-8% annually.<\/p>\n\n\n\n
The overall luxury market\u2014encompassing both wider luxury goods and experiences\u2014are still below 2019 levels, reaching approximately \u20ac1.1 trillion, with a shift from experiences to goods and experience-based goods compensating for just half of the gap versus 2019.<\/p>\n\n\n\n
The revived luxury market has been powered by the resumption of local consumption, the dual engine of China and the US and consistent strength of the online channel. Younger customers (Gen Y and Gen Z) continue to drive growth and together are set to make up 70% of the market by 2025. Shifts in the market have accelerated and luxury brands are transforming from makers of products to purpose-driven actors in the push for a more sustainable, diverse and equal society.<\/p>\n\n\n\n
These are among the findings from the 20th edition of the Bain & Company Luxury Study, released in Milan in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.<\/p>\n\n\n\n
\u201cThe changes in the luxury industry over the past 20 years have been remarkable, and the emergence from the Covid crisis comes as a renaissance for luxury brands,\u201d said Claudia D\u2019Arpizio, a Bain & Company Partner and lead author of the study. \u201cWhere once it was all about status, logos and exclusivity, luxury brands are now actors in social conversations, driven by a renewed sense of purpose and responsibility.\u201d<\/p>\n\n\n\n
After navigating an unpredictable year, the luxury industry returned to growth in the second and third quarters when compared to 2019. Bain expects that the most likely outcome for the fourth quarter will be 1% growth versus 2019, which would allow the year to end on a positive note.<\/p>\n\n\n\n
Driving this growth is remarkable momentum in China, where the market size has doubled since 2019, as well as solid growth in the US, where a new map of luxury is fast emerging with increased importance of secondary cities and suburban areas. The Americas is now the largest global market for luxury, representing \u20ac89 billion or 31% of the global market, while China now represents \u20ac60 billion or 21%. The Middle East was another bright spot with Dubai and Saudi Arabia leading the growth.<\/p>\n\n\n\n
Europe, Japan and rest of Asia only partially recovered during 2021 and have still not reached pre-Covid levels. Their comeback is linked to the resumption of global travel. Japan is expected to be back to pre-crisis levels by 2023 and Europe by 2024.<\/p>\n\n\n\n
After a 50% jump from 2019 to 2020, online continues to power on, growing by 27% from 2020 to 2021 to reach an estimated \u20ac62 billion in market value this year, thanks to accelerated adoption during covid with newly acquired customers. Brand-controlled websites now make up 40% of the online segment, up from 30% in 2019. Online and monobrand stores combined were the key channels for 2021\u2019s recovery and will lead growth in the midterm. \u201cIt\u2019s interesting to think about where the industry might be in 20 years from now,\u201d said Federica Levato, a partner at Bain & Company and co-author of the report. \u201cIt\u2019s likely that the crisis will mark a turning point for luxury as we knew it\u2014luxury brands will continue to redefine themselves, expanding their mission beyond creativity and excellence, becoming enablers of social and cultural change.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The personal luxury goods industry has come roaring back, experiencing a V-shaped recovery in 2021, noted Bain & Company, a global consultancy. After a sharp contraction in 2020, the personal luxury goods market grew by 29% at current exchange rates to hit \u20ac283 billion, increasing the size of the market by 1% versus 2019 levels.…<\/p>\n","protected":false},"author":1,"featured_media":12649,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83],"tags":[],"thb-sponsors":[],"class_list":["post-12637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bulletin"],"acf":[],"yoast_head":"\n