bain and company luxury report 2022

Now more than ever, the industry is facing paradigm shifts in all areas: production and resources, life cycle, customer relationships, corporate responsibility, and globalization. Accessories remained the largest personal luxury goods category and grew by 21%23%. The US luxury market proved very strong in 2022. 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 spending continued to skew toward products, with steep growth in personal luxury goods and more moderate growth in experience-based goods. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. Recent studies Altagamma Studies archive This is a BETA experience. Tech-enabled profit pools and strong generational trends to drive 60%+ market growth to 2030. The economic model will continue to evolve. Bookmark content that interests you and it will be saved here for you to read or share later. Some countries will finally see some long awaited recoveries: China, Japan and European countries. 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.. And even more troubling, only seven brands control one-third of the personal luxury goods market. 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. Post-streetwearis emerging as the new look. Global luxury markets include items and services like personal luxury goods, cars, hospitality, gourmet food & fine dining, fine art, private jets & yachts, and even luxury cruises. 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. Taken together, the study characterizes these trends as the nouvelle vague or new wave of developments for the sector. 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. All markets fared well throughout the year, aided by healthy domestic demand and the return of tourists from the US and Middle East. Only luxury cruises are down relative to both 2019 and 2020. 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. 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. Meanwhile, the online channels market share is normalizing. 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. Small leather goods gained further traction. And the data is continually updated so that you can track current trends. According to report co-author . 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. The market for personal luxury goodsthe core of the core of luxury segments and the focus of this analysissaw impressive growth in 2022, coming on the heels of the V-shaped Covid rebound enjoyed in 2021. In addition to exploring the trends impacting the luxury goods market, the report will identify the hundred largest personal luxury goods companies (owned or licensed luxury brands). Already it is about half the size of each of the three leading personal luxury goods categories leather accessories, beauty and apparel and its 27% growth from 2019 leaves every other personal luxury goods category in the dust. Best performing categories of 2020 are already beyond 2019 in 2021, watches and beauty on par, apparel is still lagging. South-east Asia and Korea are winning in terms of growth and potential. Now, brands are multi-price points to answer to different customer needs. All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. 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. 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. More specifically, they make up for almost 50% of the whole market. 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. Latin America experienced solid growth, especially in Mexico and Brazil. While Bain doesnt predict where wholesale and retail will end up by 2025, its pretty certain that the twenty-year trend away from wholesale will continue. International travel disruptions, duty-free opportunities, and digitalization continue to strengthen domestic spending in 2021. Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. Chart 2: Luxury goods sales YoY growth FY2019-FY2021. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American, New Bain & Company-backed venture aims to help companies better trace data, achieve sustainability goals, ESG activities correlate to stronger financial performance, reveals new study from Bain & Company and EcoVadis. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. Asia (excluding Japan) switched to second position, followed by Europe. Heels and formal shoes are now back to their 2019 levels. The retail channel has now reached parity with the wholesale channel. The global luxury goods industry overall is projected to achieve a market value of some 1.4 trillion in sales revenue this year, growing by 21%from 2021 (at current exchange rates), according to the latest Bain & Company report with Altagamma, the Italian luxury goods manufacturers' industry association. 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. Asia surged by 43% when mainland China and Japan were excluded, reflecting the booming performance of Thailand and other Southeast Asian countries, as well as a stellar year for South Korea, which narrowed the gap with Japan in terms of market size. Read the report. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. Opinions expressed by Forbes Contributors are their own. 3.0 experiences (such as virtual stores, digital shopping assistants, and ultra-luxury travel and hospitality). A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. 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. 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. DTTL does not provide services to clients. The pandemic literally closed the doors in physical retail and theyve only partly opened in 2021. Globally the Americas (31% SOM) and China (21% share) will top 2019, up 12% and 3% respectively, but Europe (-10% with 25% share) and Japan (-9% with 7% share) will remain underwater. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. 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. Bain estimates that global sales of personal luxury goods will reach at least 305 billion euros ($320 billion) this year, according to its most conservative estimate and up to 330 billion. Examples include: acceleration of middle class and consumption upgrade, pressure on uber-wealth, delayed spending given current uncertainty. Fondazione Altagamma is led by Matteo Lunelli, who was named chairman in 2020. 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.". Photo: Shutterstock Around 21 per cent of global consumer spending on luxury goods in 2021. Shoes grew by 20%22% compared with 2021 to reach 28 billion. The global luxury market is projected to grow by 21% in 2022, reaching 1.4 trillion; the personal luxury goods. 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. Many reported sales above pre-pandemic levels, driven mainly by store re-openings, strong ecommerce growth and normalizing consumer demand for their luxury brands. 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. Struggling Australia which only recently reopened after months of lockdown. Online should become the leading channel for luxury purchases with an estimated 32%34% market share, followed by monobrand stores (30%32% market share). Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. Your email address will not be published. The threats revolve mostly around understanding the winning value proposition, cracking operation complexity and defining logo and rebranding strategies. 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. 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. India Private Equity Report 2023. Read More USD 1,325 Add To Cart Increasing market concentration, yet with high dynamism from rising stars. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Luxury goods leader LVMH increased its share of the Top 5 from 39.1% in FY2016 to 44.9% in FY2021. ")},function(n){console.log(n),e("#nl2go_form").html("Unexpected error")})})})}(jQuery); 2023 E-commerce Germany and E-commerce Berlin. The share of top customers has been expanding and accounted for some 40% of market value in 2022, compared with 35% last year. Even in the face of recessionary conditions expected across leading economies into 2023, the Bain and Altagamma analysis forecasts further expansion in sales and market value for luxury goods through the coming year and decade. The luxury markets consumer base will expand from some 400 million people in 2022 to 500 million by 2030. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. The top growth drivers are Chinese consumers in China, online channels and younger generations. The Top 5 companies saw their luxury goods sales rebound in FY2021, as operations recovered from the adverse impact of the COVID-19 pandemic on consumer demand, retail, and supply chains. Bain & Company analyzes for Fondazione Altagamma the market and financial performance of more than 280 leading luxury goods companies and brands. There are sectors that were affected by the pandemic much more, and one of them is experiences. In 2022, the luxury market generated positive growth for 95% of brands. There are few sources for data-driven insights to help consumer businesses understand and navigate these fast-changing times. When it comes to the overall value of this market, luxury cars significantly outperform all of the other components combined. Monobrand stores were boosted by the willingness of customers to return to in-person shopping. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Both LVMH and Kering have seen their luxury goods sales more than double. , describes them. 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! Strong cross category, generation and price growth. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. Gen Y and Gen Z accounted for the entire growth of the market in 2022, it notes. 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. 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. 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. 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. Womenswear and menswear grew at about the same pace. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. If we have selected the wrong experience for you, please change it above. Local Japanese consumption was solid, and the market also benefited from the return of tourists after the country reopened to visitors. Europe managed to recover beyond pre-Covid 2019 levels thanks to solid domestic demand, alongside a boost from US and Middle Eastern tourist shoppers. Strong market share shift towards European brands. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. 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. The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. Luxury hospitality, gourmet food and fine dining, fine art, private jets and yachts will remain below 2019 levels, though up compared to 2020. Sales growth accelerated to 28%, equivalent to 1.3 times the growth rate for new luxury goods. 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. Luxury yachts confirming positive momentum, with growth in deliveries paired with sharp growth in order books. That reflected a renewed value proposition in the US and successful reengagement with tourists in Europe. 9 min read. 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. 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 luxury goods sales of the top two companies in FY2021 was more than the total luxury goods sales of the Top 5 in FY2016. 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. The worlds Top 5 luxury goods companies generated revenues of US$122 billion in FY2021. Taken together, the study characterizes these trends as the 'nouvelle vague' or 'new wave' of developments for the sector. Global Retail, Wholesale & Distribution Sector Leader, Managing Director | Deloitte Consulting LLP. The online personal luxury goods alone almost doubled in 2 years. 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. 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. Tech-enabled profit pools and strong generational trends to drive 60%+ market growth to 2030. 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. The secondhand luxury goods market rose to 43 billion in 2022. More troubling is they are expected to continue on a downward curve through 2025 when they will hold only between a 10% to 12% share each. China chic is only trouble for brands that continue doing what they always did. 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.) 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. 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. 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. It seems that traditional market segmentation lost its relevance. Luxury Goods: trends and predictions for 2022 (Bain Report). 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. April 19, 2023. Local consumptions are strong everywhere. When segmented into goods vs. experiences, spending continued to skew to tangible products in 2022. 2022 Diversity, Equity, and Inclusion Report. While the report states, there is still a place for rising stars in the industry, one wonders where? The overall luxury industry tracked by Bain & Company encompasses both luxury goods and experiences. Physical stores are distribution centers for online. The study also reinforced previous projections that China and Chinese consumers will become the dominant force in global luxury by 2025 (see below). Among the rising stars, India stands out for growth potential, which could see its luxury market expand to 3.5 times today's size by 2030, propelled by an increasing interest and evolving attitudes and behaviors among (young) customers towards luxury goods. A report by Bain & Company reveals China is set to become world's largest luxury market by 2025. We observed a rebound when and where Covid restrictions were lifted, yet not enough to offset the performance of the second quarter. Spirits grew faster than wine, with status spirits growing internationally and across categories, tapping into usage occasions once reserved for wines. Wealthy individuals turned to private jets more in 2022, due to their perceived safety and efficiency vs. commercial travel. Solid rebound, polarized between entry prices and tops items. 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. MILAN, Nov. 15, 2022 /PRNewswire/ -- The global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. 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. Moreover, Gen Y and Gen Z are expected to contribute roughly 180% of the total growth from 2019 to 2025. *I have read thePrivacy Policyand agree to its terms. Further, some 40% of the online segment is now controlled by websites devoted to a single brand, rather than multi-brand marketplaces. While he believes that Chinese luxury brands will not suddenly replace aspiration for Western luxury brands, he cautioned, There are clear signs that a fundamental shift is happening, and like so many disruptions in the luxury space it is being driven by Gen Z.. 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. Global Powers of Luxury Goods 2022. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. Clear overperformance driver: the focus will be on local customers, exposure to China, multi-touch and price value proposition these will be the top drivers of resilience. As consumer interest in greener vehicles grows, along with government encouragement, premium car manufacturers have focused on larger models, to ease the higher cost of electric-car components. The Russian market was mostly inactive due to war-related suspension of operations. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. How To Run A Mobile-First Web-To-Print Ecommerce Website In 2022. (Getty Images) By Tamison O'Connor 21 June 2022 Luxury cars are still subject to supply chain disruption, with component shortages further heightened by the Russia-Ukraine war. The major brands moved aggressively into the online space over the past two years, which grew from 12% share of the personal luxury market in 2019 to 22% in 2021, a stunning 38% uptick since 2019. 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. One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. from 8 AM - 9 PM ET. The market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. 1 Richemonts FY2021 financial year ended in March 2021, so saw a greater negative impact of the COVID-19 pandemic on their FY2021 results compared with other Top 5 companies which had later year end dates. 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. 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). Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. The surging recovery Bain speaks about only applies to the power brands. Meanwhile, the effect of the airline industry's CO2 mitigation costs has already begun to reshape medium- to long . 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. Luxury yacht orders rose to a record level, amid solid growth in deliveries. Download By Bain & Company Scope: Global Mar 13, 2022 Beauty reached 69 billion, up a mere 14%16% on 2021 (but still double its pre-Covid growth rate in 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, today's report concludes. 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. The global luxury market is projected to grow by 21% in 2022, reaching 1.4 trillion; the personal luxury goods market is expected to show accelerated growth of 22% to 353 billion Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. The top wealth segments stand out more now than ever before a . 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). What will it bring? Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. The competition will heat up, new players will rise, and consumer preferences will shift rapidly. Agile and proactive brands that are radically customer-centric have a chance to win, he advised. Here it comes: the second stage of our E-commerce Germany Awards 2022! Bain & Company is the global consulting firm that helps ambitious leaders transform their companies into tomorrow's world leaders. But what's the current scenario? "Luxury is back to the future" is the title of the latest market study worldwide by Bain - Altagamma. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. In the past year retailers faced some strong economic headwinds against the backdrop of an unpredictable virus and its resurging variants. As in last years report, there will be a section on the impact of COVID-19 on financial results. 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. Later on in 2021 that dip turned into a V-shaped recovery, with the value in 2021 being slightly bigger than before the pandemic. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data.

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