bain and company luxury report 2022

Broader meanings and business models will emerge. Europe managed to recover beyond pre-Covid 2019 levels thanks to solid domestic demand, alongside a boost from US and Middle Eastern tourist shoppers. 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. 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. You may opt-out by. Luxury Market Rebounds In 2021, Set To Return To Historic Growth Trajectory Please enable JavaScript to view the site. Personal luxury goods market to reach $378B by 2025: Bain For any questions or to arrange an interview, please contact: Gary Duncan (London) Email: [emailprotected], Orsola Randi (Milan) Email: [emailprotected]Tel: +39 339 327 3672. Success online at least partly depends on the amount of advertising dollars pumped into online channels. PARIS The luxury industry has shown resilience with a return to pre-COVID performance levels and an estimated sector growth of more than 6% between 2022 and 2026. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. 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. 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. Uber-luxury jewelry outperformed globally, as did iconic pieces and lines. Solid rebound, polarized between entry prices and tops items. When segmented into goods vs. experiences, spending continued to skew to tangible products in 2022. 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. The study reveals that some of the consumption fundamentals of China will go through changes. Struggling Australia which only recently reopened after months of lockdown. Retail continued to grow faster than wholesale and reached parity in terms of market share. In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. In May 2020, we began making regular forecasts of how soon aviation demand would recover from the effects of the Covid-19 pandemic. Spirits driving maret recovery thanks to growth in local consumers interest for Asian spirits, increasing interest for status spirits and better ability vs ine brands in catering interest of younger generations. All personal luxury goods categories performed well in 2022, with double-digit growth rates across the board. But with more turbulence ahead, the power luxury brands are best positioned to power on through. However, the profit erosion also reflects higher energy prices and increased labor costs. Within accessories, leather goods grew by 23%25%, far surpassing its pre-Covid levels (up 39%41% compared with 2019). 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. A powerful factor for sector growth in the rest of the decade will be generational trends,the analysis reports. "Luxury is back to the future" is the title of the latest market study worldwide by Bain - Altagamma. Bain & Company study underlines strength of luxury market rebound and But what's the current scenario? The Luxury Industry: Accelerating and Advancing Corporate 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. The market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. Bookmark content that interests you and it will be saved here for you to read or share later. This market growth is driven by factors that go beyond aspiration, with consumers becoming more knowledgeable and choosy, and intensified competition for loyalty and advocacy. The study also reinforced previous projections that China and Chinese consumers will become the dominant force in global luxury by 2025 (see below). The performance of the last quarter of this year, in determining the final outcome for 2022, will largely depend on the progressive lifting of Covid-19 pandemic restrictions in China, as well as evolution of European and American luxury consumer confidence in the face of rising inflation and cost of living pressures, and potential recession in the US and European economies, the report notes. Later on in 2021 that dip turned into a V-shaped recovery, with the value in 2021 being slightly bigger than before the pandemic. Iconic models and new hero products were the most desirable items. Fashion jewelry showed solid growth. Evolving luxury map: new cities emerging, large cities back and persisting suburban areas. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Your email address will not be published. Luxury goods leader LVMH increased its share of the Top 5 from 39.1% in FY2016 to 44.9% in FY2021. Shoes, leather, jewelry, watches, beauty and apparel these categories can expect changes, with the highest growth between 2019 and 2021 being the shoes category. Meanwhile, China, which remains crucial to the long-term future of the luxury market, was challenged due to Covid lockdowns, and sales are likely to be down vs. 2021. Global luxury goods market takes 2022 leap forward and remains poised Sales of secondhand watches, estimated at an additional 2530 billion, rapidly grew in 2022, fueled by the appetite of Generation Z and millennials for investment and resale opportunities, given the high resilience of the category during crises. Luxury brands have faced three years of tremendous turbulence and uncertainty, but the industry shows more strength, resilience, and ability to innovate than before. The top growth drivers are Chinese consumers in China, online channels and younger generations. A deliberate (and effective) elevation strategy has driven a progressive price increase across the industry (driving around 60% of the 2019-2022 growth) without damaging volume growth. Bain: China's Luxury Market Contracted 10 Percent in 2022 Stay ahead in a rapidly changing world. Post-streetwearis emerging as the new look. 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. With 2022 already knocking on our doors, its time to step into another year full of new and interesting trends, figures and actions for the Luxury Goods market. Interestingly enough, the pandemic caused this market to experience its worst dip in history. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. Luxury Sales Set to Grow by 5 to 15% This Year, Bain Says Mainland China should overcome the Americas and Europe to become the biggest luxury market globally (25%27% of global purchases). "The nouvelle vague thenew 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 D'Arpizio, a Bain & Company partner and leader of Bain's Global Luxury Goods and Fashion practice, the lead author of the study. Luxury yacht orders rose to a record level, amid solid growth in deliveries. However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. 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. Based on a preliminary assessment covering both sales in the luxury goods and experiences market in nine major categories, it reports total revenues will increase between 13% to 15% over the 2020 pandemic year to end at 1.14 trillion ($1.3 trillion). As in last years report, there will be a section on the impact of COVID-19 on financial results. Luxury sales to grow at least 5% this year - Bain | Reuters Although there will never be another China in terms of growth contribution to the industry, new markets (such as India and emerging Southeast Asian and African countries) have significant potential, assuming their luxury shopping infrastructure can evolve quickly enough. Taken together, the study characterizes these trends as the nouvelle vague or new wave of developments for the sector. DTTL (also referred to as Deloitte Global) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. Get your bi-weekly update on the e-commerce insights: console.log("1"),function(e,n,o,t,l,c,r){e.Newsletter2GoTrackingObject=l,e[l]=e[l]||function(){(e[l].q=e[l].q||[]).push(arguments)},e[l].l=1*new Date,c=n.createElement(o),r=n.getElementsByTagName(o)[0],c.async=1,c.src="https://static.newsletter2go.com/utils.js",r.parentNode.insertBefore(c,r)}(window,document,"script",0,"n2g"),n2g("create","yj76l2pj-nqhljzcz-qvj"),function(e){e(function(){console.log("1"),e("#nl2go_form").on("submit",function(n){n.preventDefault(),console.log("1");var o={email:e("input[name=email]").val()};console.log("1"),n2g("subscribe:send",{recipient:o},function(n){console.log(n),201==n.status?e("#nl2go_form").html("Succes! 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, today's report concludes. If we have selected the wrong experience for you, please change it above. Watches have evolved from a challenged category to the new object of desire. 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. The fine art market grew 13% to 39 billion, as the ranks of potential buyers swelled and new Asian art hubs strengthened. The studys lead author is Claudia DArpizio, a Bain partner in Milan. 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. Market favored by positive consumption tailwinds, yet partially slowed-down by disruption across the supply chain. (Photo by Hollie Adams/Getty Images), Cinco De Mayo Is Only One Day, Yet Latino Consumers Deserve Attention All Year, Retail Alert: Philippines May Talk Trade As President Marcos Arrives In The USA, Gebr. Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. 9 min read. 3.0 experiences (such as virtual stores, digital shopping assistants, and ultra-luxury travel and hospitality). Specialty retailers went from 20% share of the personal luxury goods market in 2019 to 16% in 2021, a 10% decline in sales. Sustainability remains a focus for both consumers and shipyards, from greener propulsion systems to design-for-disassembly solutions that make yacht materials more recyclable. Many of them reported sales above their pre-pandemic levels, driven partly by increasing e-commerce sales and the re-opening of physical stores. 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. Banks should adapt lending strategies to account for - bain.com Not all sectors can enjoy stable recovery, however. Brands continued to exert more control over their distribution, with directly operated channels increasing in importance again. 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. Luxury hospitality, gourmet food and fine dining, fine art, private jets and yachts will remain below 2019 levels, though up compared to 2020. 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).
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