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. The nouvelle vague the new 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 DArpizio, a Bain & Company partner and leader of Bains Global Luxury Goods and Fashion practice, the lead author of the study. For information, contact Deloitte Global. Best performing categories of 2020 are already beyond 2019 in 2021, watches and beauty on par, apparel is still lagging. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. The study reveals that some of the consumption fundamentals of China will go through changes. Only fine wines and spirits (77 or $88 billion) and high-end furniture and housewares (45 or $51 billion) will exceed 2019 levels, up between 12% to 14% and 13% to 15% respectively. These domains are rich with opportunities for luxury brands but investments for future growth are crucial.. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Across 63 offices in 38 countries, we work alongside our clients as one team with a. 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 most likely outcome in the fourth quarter of 2022 is a 19% year-over-year rise in sales, which would be a slight slowdown from 23% growth in the third quarter. Over-performance of all categories, restocking wardrobe in the rising post-streetwear era. The estimated value for the whole market in 2021 is B 1.140. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. Download By Bain & Company Scope: Global Mar 13, 2022 This trend has also been reflected in product categories, through the shift to the 'post-streetwear' era, which maintains some elements of so-called streetwear (such as gender fluidity, occasion-less apparel, inclusivity and sports-driven inspiration) but goes beyond its style codes through new and enhanced techniques, materials and functionalities. Boosted by a strong market performance across quarters, and despite macro-economic indicators worsening globally, as well as specific challenges in China, the personal luxury sector is set to see the value of its sales jump to 353 billion in 2022, marking an advance of 22% at current exchange rates (or 15% at constant exchange rates) versus the previous year, the study projects. 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. SEA is still suffering from a lack of tourism. The year of 2021 confirmed Chinas growing importance in luxury, together with a bright evolution for European and American customers. The impact of a possible global recession on the industry in 2023 could differ from the impact of the 200809 global financial crisis. None of this has stopped brands from investing in modernizing their operations, especially through more robust information technology infrastructure to support the ongoing digitalization of the industry, and through a reconfiguration of their store networks (primarily through renovation and relocation projects). Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. Strong market share shift towards European brands. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. Top 5 Five-year view The composite luxury goods sales of the Top 5 companies grew by 91% over the five years FY2016-FY2021. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. 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. The experiences sector, including travel and any in-person brand experiences, is still way below its pre-covid levels, mostly because of travel restrictions. Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. The top growth drivers are Chinese consumers in China, online channels and younger generations. 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. Abstracts are available in the press releases area. However, rising sustainability concerns, coupled with increased operational costs, narrowed the potential customer base and restricted airplane utilization rates. This reflects a more precocious attitude toward luxury, with Gen Z consumers starting to buy luxury items some three to five years earlier than millennials did (at 15 vs. at 1820); Gen Alpha is expected to behave in a similar way. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. Bain has published its annual findings in the Luxury Goods Worldwide Market Study since 2000. 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, todays report concludes. The luxury hospitality market surged to an estimated 191 billion, more than doubling in value in 2022. This trend has also been reflected in product categories, through the shift to the post-streetwear era, which maintains some elements of so-called streetwear (such as gender fluidity, occasion-less apparel, inclusivity and sports-driven inspiration) but goes beyond its style codes through new and enhanced techniques, materials and functionalities. Iconic models and new hero products were the most desirable items. 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. We expect that the growth of new types of activities, often powered by technology, will result in an additional 60 billion to 120 billion of luxury industry sales. Bain & Company recently released its 20 th annual Luxury Study, which underlines the resurgence in the global luxury market in 2021 after a contraction in 2020. The nonfungible token (NFT) market stabilized after a wave of speculative interest from investors. 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. continued focus for large established brands, with few exceptions intercepting the next gen of customers. All rights reserved. How To Run A Mobile-First Web-To-Print Ecommerce Website In 2022. But that too will favor power brands that have long practiced concessions, leaving emerging brands out in the cold. 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. In general, luxury brands have the chance to secure common prosperity, but they will need to challenge and adapt their strategy. Specialty retailers went from 20% share of the personal luxury goods market in 2019 to 16% in 2021, a 10% decline in sales. Consumers overindulged on products, but the willingness to go back to experiences is at an all-time high we can read in the report. The year 2022 saw a global tempering of the peak activity witnessed in 2021, triggered by tightening monetary policies across American and European markets as economies emerged from a Covid-19-induced suppression in economic activity. 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. The share of top customers has been expanding and accounted for some 40% of market value in 2022, compared with 35% last year. 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. Federica Levato, Bain & Company's partner and the report's co-author, said: "The speed of future market growth will depend on luxury players' strategic responses to the current crisis and their ability to transform the industry on behalf of the customer.". Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. This provides both opportunities as well as potential threats to brand, fashion platforms and investors. *I have read thePrivacy Policyand agree to its terms. In this webinar, Nirad Jain and Kara Murphy, co-leads of Bain's Healthcare Private Equity practice, share key takeaways from our 2023 Global Healthcare Private Equity Report, and dive into the macroeconomic forces and geopolitical dynamics shaking up the industry. The economic model will continue to evolve. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. We observed a rebound when and where Covid restrictions were lifted, yet not enough to offset the performance of the second quarter. Luxury brands have faced three years of tremendous turbulence and uncertainty, but the industry shows more strength, resilience, and ability to innovate than before. And the data is continually updated so that you can track current trends. 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). Sustainability remains a focus for both consumers and shipyards, from greener propulsion systems to design-for-disassembly solutions that make yacht materials more recyclable. However, the spots will be replaced by new consumers, mostly Generation Y and Z. 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. Moreover, Gen Y and Gen Z are expected to contribute roughly 180% of the total growth from 2019 to 2025. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. The overall luxury market tracked by Bain & Company comprises nine segments: luxury cars, personal luxury goods, luxury hospitality, fine wines and spirits, gourmet food and fine dining, high-end furniture and housewares, fine art, private jets and yachts, and luxury cruises. 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. Increasing market concentration, yet with high dynamism from rising stars. Brands continued to exert more control over their distribution, with directly operated channels increasing in importance again. Together, we achieve extraordinary outcomes. 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. A report by Bain & Company reveals China is set to become world's largest luxury market by 2025. All personal luxury goods categories performed well in 2022, with double-digit growth rates across the board. Intuitive service that goes beyond merely offering the human touch is becoming more crucial, and operators are increasingly looking to technology to automate predictable tasks and free employees to focus on the most important interactions.
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