Over the past two decades, the Bain & Company Luxury Study has become a reference point for the industry, but it has never seen a year of surging performance to match 2021. Mergers and acquisitions meant a wave of consolidation rippled through high-end galleries. In the last few months, luxury brands have been forced to reroute their futures said, , a Bain & Company partner and co-author of the report. The global luxury market is enjoying strong momentum in 2022 so far, Bain & Company said, estimating that first-quarter sales rose 17 to 19 percent year on year. Southeast Asia, meanwhile, continued to suffer from the dearth of tourists. Well beyond product considerations, they seek personalization and alignment with their values, a strong voice on social issues, and real action and responsibility when it comes to sustainability. Japan is forecast to grow by 10% at current exchange rates to 20 billion, still below its 2019 performance. This helps streamline processes and clarify roles and responsibilities within an organization. Bain has published its annual findings in the Luxury Goods Worldwide Market Study since 2000. Luxury products in general were first to recover to their 2019 levels, driven by the loosening of pandemic restrictions and by lockdown-inspired home upgrades and blended living and working spaces. Shoes grew by 20%22% compared with 2021 to reach 28 billion. Gourmet food and fine dining grew 12% at current exchange rates to 57 billion, completing its recovery to prepandemic levels, as social restrictions were lifted across major cities. The high-end furniture and housewares market reached 45 billion, up 13% to 15% from 2020 and 6% to 8% ahead of 2019. Fondazione Altagamma is led by Matteo Lunelli, who was named chairman in 2020. The spending of Gen Z and the even younger Generation Alpha is set to grow three times faster than other generations through 2030, making up a third of the market. 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. In contrast, Mainland China lost a little ground, dropping 1% from 2021. Global Powers of Luxury Goods 2022 | Deloitte Global The personal luxury goods market reached an estimated 113 billion in the Americas, growing 25% over 2021. Travelers were lured not just to leading cities but also to out-of-the-way destinations, in keeping with the pandemic trend to seek rural solitude. Please read and agree to the Privacy Policy. Jonathan Goldsworthy. Asia. A deliberate (and effective) elevation strategy has driven a progressive price increase across the leather categoryaccounting for about 60% of 201922 growthwithout damaging volume growth. Despite high inflation and rising costs of living, as well as ongoing COVID-19 restrictions, some 95 percent of luxury brands reported positive growth in 2022. Luxury yacht orders rose to a record level, amid solid growth in deliveries. Skin care was boosted by a wave of pampering, although the weak performance of travel retail is still holding beauty back. Between 2021 and 2022, about 70% of leather category growth has been driven by price increases; by contrast, price increases accounted for only about 50% of category growth from 2019 to 2021. Womenswear grew faster than menswear, in large part due to the recent acceleration of occasionwear. Customization proved vital to accelerate the recovery. 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. 2022 Diversity, Equity, and Inclusion Report. Bain & Company is a global consultancy that helps the worlds most ambitious change makers define the future. Local consumption was also strong in Europe, including heavy spending by Russians in Russia. 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. 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.". In spite of 110% year-over-year growth at current exchange rates, sales were still down 7% from their 2019 level. Mainland China experienced remarkable momentum, with the market size nearly doubling since 2019, entirely due to the repatriation of Chinese purchases from abroad. Bain estimates that the secondhand luxury market soared to 33 billion in 2021, driven by surging demand and an increasingly competitive offer. 2022 From Surging Recovery to Elegant Advance: The evolving Future of Luxury A Market Study that shows how brands can build on their historic rebound. The fine art market grew 13% to 39 billion, as the ranks of potential buyers swelled and new Asian art hubs strengthened. Luxury went local most dramatically in mainland China, whose market is forecast to grow by 36% at current exchange rates to 60 billion; Chinas share of the global market has almost doubled in two years, to a forecast 21% in 2021. Asia (excluding Japan) switched to second position, followed by Europe. Luxury cars are still subject to supply chain disruption, with component shortages further heightened by the Russia-Ukraine war. We work with ambitious leaders who want to define the future, not hide from it. 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. After a sharp contraction in 2020, personal luxury goods sales are set to beat their pre-Covid record, with the market forecast to grow by 29% at current exchange rates to hit 283 billion, likely finishing the year up 1% from its 2019 record. As we move ahead, we anticipate that four growth trends will profoundly reshape the luxury market by 2025. The analysis notes that, even with a possible global recession next year, the impact on the industry could be different from that of the 2008-2009 global financial crisis. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. That reflected a renewed value proposition in the US and successful reengagement with tourists in Europe. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling todays urgent challenges in education, racial equity, social justice, economic development, and the environment. Luxury Report 2021: From Surging Recovery to Elegant - Bain & Company Shein partners with Reliance in major India comeback - CNN Milan21 June, 2022After its worst dip in history, the personal luxury goods market has experienced a v-shaped rebound, reaching 288 billion in value. Websites devoted to a single brand gained ground on other types of online platforms and now make up 40% of the online segment, up from 30% in 2019. We expect that solid market fundamentals will result in annual growth rates between 5% and 7% until 2030. All segments except luxury cruises resumed growth, but only luxury cars, personal luxury goods, fine wines and spirits, and high-end design furniture were able to grow enough to exceed their 2019 levels. Fashion jewelry showed solid growth. *I have read thePrivacy Policyand agree to its terms. Hiring Process: Associate Consultant | Bain & Company China spending is crunched under strict Covid restrictions. The retail channel has grown to the point that it now accounts for almost half the market (a forecast 49% in 2021) and is poised to overtake the wholesale channel. According to our forecasts, shoes grew by 11% compared with 2019 to reach 23 billion, thanks to a switch to casual footwear (although there are signs that women are now snapping up shoes fit for more extrovert occasions). Fashion is a huge part of that, serving as one of the . Skin care was boosted by a persistent self-indulgence trend, while demand for makeup and fragrances remained constrained. Generation Y (millennials) and Generation Z accounted for all of the markets growth in 2022. The region is on the path to recover to 2019 levels one year before expectations, thanks to booming local demand driven by a fierce back to normal attitude and a rebound in intraregional tourism. Global luxury goods market takes 2022 leap forward and remains poised Southeast Asia and South Korea have been excelling in both growth and future potential. Luxury yacht delivery growth in 2021 was aided by delays in 2020 and surging interest in intimate luxury experiences. Growth was steady across regions as people finally realized travel ambitions previously blocked by Covid, using money they couldnt spend on trips during the pandemic. However, rising sustainability concerns, coupled with increased operational costs, narrowed the potential customer base and restricted airplane utilization rates. Luxury's Growth Expected to Slow Dramatically Next Year, Bain Says *I have read thePrivacy Policyand agree to its terms. bain and company luxury report 2022 - runbuk.com Sales are set to hit a new record in 2022, with the market forecast to grow by 22% at current exchange rates to 353 billion. The fine art market rebounded, thanks to the gradual reopening of public auctions and art fairs. Bookmark content that interests you and it will be saved here for you to read or share later. Bain & Company analyzes for Fondazione Altagamma the market and financial performance of more than 280 leading luxury goods companies and brands. Online should become the leading channel for luxury purchases with an estimated 32%34% market share, followed by monobrand stores (30%32% market share). Marketing messages focused on topics such as inclusivity and sustainability to meet the concerns of younger adults. There was a solid rebound in overall global spending by US and Latin American consumers in 2021, with some previously unheralded cities such as Denver and Austin emerging as luxury hotspots. These are the key findings from Bain & Company, the world's leading advisor to the global luxury goods industry, in its Luxury 2022 Spring Update - "Rerouting the Future." The study was released today in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers' industry foundation. Accessories remained the largest personal luxury goods category in 2021 and grew by 8%, relative to 2019, to reach 62 billion. In 2022, we estimate that 95% of brands experienced positive growth, but most luxury players continued to invest for the future, which resulted in a slight erosion of average profitability following an unprecedented increase in 2021. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. Bain & Company Millennials and Gen Z accounted for 72% of the global luxury market in 2022 compared with 2019, when millennials and Generation X made up most of the luxury-goods market,. 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. Growth is driven by value rather than volumes," says Bulgari Group CEO Jean-Christophe Babin. proved much more significant than its 2020 policies. PDF RESEARCH Luxury business to contract by 20-35pc this year: Bain update After a severe contraction in 2020 due to the Covid-19 pandemic, the market grew back to 1.15 trillion in 2021 and surprised everyone in 2022 by further growing 19%21%, according to our estimates. Responding to the call of sustainability. India stands out; its luxury market could expand to 3.5 times todays size by 2030, propelled by younger customers and an expanding upper and middle class. Luxury Goods: trends and predictions for 2022 (Bain Report) These small brands, many of which are newcomers, currently make up 2% of the market but are growing twice as fast as the broader industry. As in accessories, logos are back in fashion. 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 . Spirits grew faster than wine, with status spirits growing internationally and across categories, tapping into usage occasions once reserved for wines. It comprises nine segments led by luxury cars, personal luxury goods, and luxury hospitality, which together account for 80% of the total market. South Korea regained its 2019 levels due to the repatriation of local customers spending, which more than compensated for the lack of tourism. February 07, 2022. The latest Bain-Altagamma Luxury Goods Worldwide Market Study forecasts increased resilience to recession after robust 2022 growth. Art-based NFTs still represent a limitedalbeit expandingportion of the overall market; artists are looking for ways to meaningfully integrate NFTs into fine arts. It maintains some elements of streetwear (such as gender fluidity, a disregard for occasion, inclusiveness, and sports-driven inspiration), but goes beyond its style codes through new and enhanced techniques, materials, and functions. Sales of private yachts and jets grew by 18% at current exchange rates relative to 2021, reaching 26 billion. Additionally, China continued to see double-digit growth last year and Western markets experience sustained local demandthe United States, in particular, maintained momentum, even after federal stimulus cheques ended. After a 50% jump from 2019 to 2020, online continued to power on, growing by 27% from 2020 to 2021 to reach an estimated 62 billion in market value this year, thanks to accelerated adoption during the pandemic. LVMH Stopped From Building a Luxury Hotel in Beverly Hills The market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. Internationally, secondhand growth was aided by sustained demand for watches, which account for 60%70% of the total market. Bains insights are based on triangulating information and sources available as of November 10, 2022, including: The scenarios do not consider disruptive changes to the Covid-19 status quo (e.g., potential future waves of Covid-19 related to variations of the virus) nor to the global sociopolitical situation. 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. Small leather goods gained further traction. Apparel, Fashion & Luxury | Retail | McKinsey & Company Post-streetwearis emerging as the new look. Department stores declined by 8% and went from 18% SOM to 15% in 2021 . The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. Beauty recovered to 60 billion, just 1% below its 2019 levels. It comprises nine segments, led by luxury cars, luxury hospitality, and personal luxury goods, which together account for more than 80% of the total market. Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. Interest from high-net-worth individuals continued to rise, reflecting a desire for deeper connections with nature and comfort; designs increasingly reflect these preoccupations, through features such as enlarged stern areas or a preference for explorer yachts able to sail to the remotest areas. The goal of the. The global luxury goods market took a leap forward in 2022, despite uncertain market conditions. Bain & Company estimates market growth to reach 360-380 billion by 2025. highlighting two possible trajectories for 2022: In the last few months, luxury brands have been forced to reroute their futures said Federica Levato, a Bain & Company partner and co-author of the report. The apparel category grew in 2021, but not sufficiently to close the gap with 2019. The impact of a possible global recession on the industry in 2023 could differ from the impact of the 200809 global financial crisis. The most likely outcome in the fourth quarter is a 1% year-over-year rise. Online and monobrand stores were the key channels for 2021s recovery. 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 todays report. Luxury cars, luxury hospitality, and personal luxury goods together account for 80% of the total market. By Olya Linde, Ari Epstein, Sophia Kravchenko, and Karen Rentmeesters. Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. The nonfungible token (NFT) market stabilized after a wave of speculative interest from investors. Monobrand websites gained further ground, raising their share to about 45% of the online segment, up from 43% in 2021. Gen Y and Gen Z accounted for the entire growth of the market in 2022, it notes. According to our forecasts, the overall luxury market grew back by 13% to 15% in 2021, to 1.14 trillion, 9% to 11% below 2019 levels. Stay ahead in a rapidly changing world. Mainland China should overcome the Americas and Europe to become the biggest luxury market globally (25%27% of global purchases). New types of activities, often powered by technology, should also spark an additional 60 billion to 120 billion in sales by 2030, from sources such as the metaverse and brand-related media content. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Fondazione Altagamma is led by Matteo Lunelli, who was named chairman in 2020. Bains insights are based on triangulating information and sources available as of November 5, 2021, including the following: The scenarios do not consider disruptive changes in Covid-19 status quo (e.g., potential future waves of Covid-19 related to variations of the virus). As a result, two scenarios could play out in 2023, with sales growth in the personal luxury goods market ranging from 3% to 5% in the base case and up to 6% to 8% (at constant exchange rates) in a more positive case, depending on the strength of economic recovery in China and the ability of the US and Europe to withstand economic headwinds. The Future of Luxury: Bouncing Back from Covid-19 - Bain & Company The luxury market now appears better equipped to cope with economic turbulence, thanks to a consumer base that is both larger and more concentrated on top customers who are less sensitive to downturns. Winning brands successfully reinvented their business model in the country to cater growing local demand and influence. 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. Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. Download By Bain & Company Scope: Global Mar 14, 2022 2020 comCap Evolution of Digital Brands Report The rise . Watches and beauty grew back to their 2019 levels. Cyrille Fabre (MBA '03D) a partner at Bain in charge of its Consumer Goods and Retail practice in the Middle East, quotes a recent retail report from CB Richard Ellis showing 85 percent of luxury retailers are present in Dubai, the third highest density of this sector in the world after Hong Kong (91 percent) and London (87 percent). That said, there is still a place for rising stars in the industry. Bookmark content that interests you and it will be saved here for you to read or share later. Most brands are now covering multiple price points to respond to different customer segments and needs. Spending on experiences should be the last luxury outlay to recover historical highs, given its reliance on the resumption of international tourism and business travel. A powerful factor for sector growth this decade will be generational trends. Iconic models and new hero products were the most desirable items. Hotel chains outpaced independents, powered by their greater adaptability to shifting consumer needs. Sales of luxury cars, the biggest portion of the overall market, beat their 2019 record, reaching 551 billion, 7% to 9% more than 2020 at current exchange rates, and 0% to 1% up from 2019. However, this is still 9% to 11% below 2019 levels. Stay ahead in a rapidly changing world. 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. Global luxury goods market to grow 21 percent in 2022 to 1.4 trillion These consumers are hungry for unique products and experiences, putting brands VIC (very important client) strategies into overdrive. 2022 Diversity, Equity, and Inclusion Report. The weak performance of travel retail is still affecting the entire category. While there will not be "another China" to drive a. The personal luxury goods industry, in particular, saw a further growth acceleration this year, coming on the heels of the V-shaped rebound enjoyed in 2021, the research shows. By Mimosa Spencer. As tourism collapsed by 80% to 90%, spending on personal luxury goods by consumers in their home markets picked up the slack, rising by 50% to 60% between 2019 and 2021, according to our forecasts. 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. Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. Europe managed to recover beyond pre-Covid 2019 levels thanks to solid domestic demand, alongside a boost from US and Middle Eastern tourist shoppers. Our 2022 report found executives grappling with increasing complexity and a disorderly transition as they balanced carbon-reduction efforts with the economic realities of their businesses. 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. All personal luxury goods categories have now recovered to 2019 levels or better, with hard luxury, leather, and apparel leading the resurgence following the pandemic.
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