bain and company luxury report 2022 bain and company luxury report 2022
All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. With 2022 already knocking on our doors, it's time to step into another year full of new and interesting trends, figures and actions for the Luxury Goods market. 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. South-east Asia and Korea are winning in terms of growth and potential. Takeaways from Bain's 2023 Global Healthcare Private Equity and M&A Report A powerful factor for sector growth this decade will be generational trends. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. 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. Weak Hong Kong vs mixed Taiwan and Macau. Required fields are marked *. Luxury Sales Set to Grow by 5 to 15% This Year, Bain Says The global luxury market accelerated sharply in early 2022, the consultancy found, but risks slowing due to macroeconomic pressures and Covid-19 lockdowns in China. A report by Bain & Company reveals China is set to become world's largest luxury market by 2025. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. All of the Top 5 companies saw their luxury goods sales rebound in FY2021, as the impact of the COVID-19 pandemic on consumer demand, retail and supply chain constraints reduced. Latin America experienced solid growth, especially in Mexico and Brazil. Here it comes: the second stage of our E-commerce Germany Awards 2022! ESG activities correlate to stronger financial performance - bain.com Please read and agree to the Privacy Policy. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. According to the latest Bain & Company Study with Altagamma, the segment will continue to expand until 2030 despite the . Globally, things should go back to normal between 2023 and 2024. The customer wants a seamless experience to shop anywhere, anytime. 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. 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. Taken together, the study characterizes these trends as the nouvelle vague or new wave of developments for the sector. Travel retail is in recovery mode, at least in Western markets, but not yet back on its pre-Covid track. It seems that traditional market segmentation lost its relevance. 2022 Luxury Study Renaissance in Uncertainty: Luxury Builds on Its Rebound Download By Bain & Company Scope: Global Apr 8, 2022 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. Bain Warns China Luxury Growth to Further Decelerate in 2022 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. Get the latest business insights from Dun & Bradstreet. Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. In contrast, Mainland China lost a little ground, dropping 1% from 2021. The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. But because of its vast cultural and geo-political differences, China can be a risky bet for Western luxury brands. In coming years, the spending of Gen Z and Gen Alpha is set to grow some three times faster than for other generations until 2030, making up a third of the market. Meanwhile, China itself, which remains crucial to the long-term of the luxury market, continues to confront a challenging phase due to Covid lockdowns and is still performing below 2021 figures. Online sales rose 20% from 2021 to 2022 to reach an estimated 75 billion. 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). Only luxury cruises are down relative to both 2019 and 2020. If we have selected the wrong experience for you, please change it above. *I have read thePrivacy Policyand agree to its terms. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. This is a BETA experience. Department stores declined by 8% and went from 18% SOM to 15% in 2021. Agile and proactive brands that are radically customer-centric have a chance to win, he advised. Fashion ranking: Top 20 clothing retailers in Germany. 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. Casual categories, such as fussbett sandals and Wellington boots, are on the rise. In the past year retailers faced some strong economic headwinds against the backdrop of an unpredictable virus and its resurging variants. Across 63 offices in 38 countries, we work alongside our clients as one team with a. Beauty reached 69 billion, up a mere 14%16% on 2021 (but still double its pre-Covid growth rate in 2019). That concludes the studys breathless reporting of the topline findings of the past year in luxury, saying, it has never seen a year of surging performance to match 2021.. If you would like to help improve Deloitte.com further, please complete a 3-minute survey, To tell us what you think, pleaseupdate your settings to accept analytics and performance cookies. Between 2017 and 2021, the market size of second-hand luxury ballooned by 27 percent (first-hand luxury only grew by 12 percent over that same period.) Sales of private yachts and jets grew by 18% at current exchange rates relative to 2021, reaching 26 billion. 2023. Specialty retailers went from 20% share of the personal luxury goods market in 2019 to 16% in 2021, a 10% decline in 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. In 2021, the personal luxury market is expected to grow 1 percent compared to 2019 and 29 percent compared to 2020. The economic model will continue to evolve. 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. The US luxury market proved very strong in 2022. 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. However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. 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. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. Download By Bain & Company Scope: Global Mar 13, 2022 Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. Further, some 40% of the online segment is now controlled by websites devoted to a single brand, rather than multi-brand marketplaces. But what's the current scenario? Within accessories, leather goods grew by 23%25%, far surpassing its pre-Covid levels (up 39%41% compared with 2019). The access to the reports is reserved to Altagamma Companies. Accessories remained the largest personal luxury goods category and grew by 21%23%. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. After softening in Aug-Sept, consumption restarted strong in October despite scattered lockdowns. This reports reveals and describes what they are: China doubling and Americas booming, Europe and Japan are still in recovery mode. Stay ahead in a rapidly changing world. And the data is continually updated so that you can track current trends. Together, we achieve extraordinary outcomes. Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. Many reported sales above pre-pandemic levels, driven mainly by store re-openings, strong ecommerce growth and normalizing consumer demand for their luxury brands. MA In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. 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. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling today's urgent challenges in education, racial equity, social justice, economic development, and the environment. 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. The year of 2021 confirmed Chinas growing importance in luxury, together with a bright evolution for European and American customers. These wildcards secondhand luxury, next-gen consumers and China may continue to test the strength, resilience and agility that Bain observes has enabled luxury brands to overcome the tremendous turbulence of the past two years. One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. 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. A new section in this year's report will focus on circularity strategies and the secondary/resell market, which has become increasingly important in the luxury sector. It finds that solid market fundamentals and new tech-enabled profit pools, are set to boost the markets value to 540-580 billion by the end of the present decade, from 353 billion estimated for 2022 a rise of 60% or more. Among the rising stars, India stands out for growth potential, which could see its luxury market expand to 3.5 times todays size by 2030, propelled by an increasing interest and evolving attitudes and behaviors among (young) customers towards luxury goods. While US luxury market is still strong, and Europe managed to recover beyond 2019 thanks to solid local demand alongside an extra-boost from US and Middle Eastern tourist shoppers, new markets are surprising the industry. Local consumptions are strong everywhere. The worlds Top 5 luxury goods companies generated revenues of US$122 billion in FY2021. 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. Consumers overindulged on products, but the willingness to go back to experiences is at an all-time high we can read in the report. Luxury Market Rebounds In 2021, Set To Return To Historic Growth Trajectory The FY2021 composite net profit margin for the 78 Top 100 companies reporting net profits more than doubled to 12.2% year-on-year, higher than pre-pandemic levels. Now, even as the pandemic's impact on air travel diminishes, inflation and lower disposable incomes have emerged as constraints on future growth. 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. 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. Local Japanese consumption was solid, and the market also benefited from the return of tourists after the country reopened to visitors. Global luxury goods market to grow 21 percent in 2022 to 1.4 trillion Fine art market rebounding thanks to gradual reopening of public auctions and art fairs. Sparkling wine (and not just Champagne) gained share over still. The leather goods category has benefited from a generalized price increase (from the most expensive products to entry-level items) that didnt hamper volume growth. Altagamma Studies | Altagamma All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. In 2022, the luxury market generated positive growth for 95% of brands. The luxury markets are analysed by looking at demand and supply with specific in-depth analysis and forecasts on consumption, consumer profiling, digital, retail and specific product category. That reflected a renewed value proposition in the US and successful reengagement with tourists in Europe. Over-performance of all categories, restocking wardrobe in the rising "post-streetwear" era. But with more turbulence ahead, the power luxury brands are best positioned to power on through. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Bain & Company, Altagamma Luxury Study Predicts Global Growth Drivers , describes them. 9 min read. Shoes grew by 20%22% compared with 2021 to reach 28 billion. Read More USD 1,325 Add To Cart Brands continued to exert more control over their distribution, with directly operated channels increasing in importance again. 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.
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