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. Despite the uneven recovery in personal luxury goods, it is projected to post CAGR between 6% to 8% and reach sales of 360 to 380 billion ( $409 to $432 billion) by 2025. Uber-luxury jewelry outperformed globally, as did iconic pieces and lines. The start-up world also became a less secure option for innovation talent during this period, with investment size falling and the number of start-up investments dropping 59%, from 14,400 in the last quarter of 2021 . Not all sectors can enjoy stable recovery, however. Luxury cars are still subject to supply chain disruption, with component shortages further heightened by the Russia-Ukraine war. Retail continues to dominate, while online channels are seeing a normalization in their growth. Luxury hospitality, gourmet food and fine dining, fine art, private jets and yachts will remain below 2019 levels, though up compared to 2020. 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. 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. Luxury sales to grow at least 5% this year - Bain | Reuters On the other hand, luxury cars the largest single category at 551 billion ($626 billion) will end the year at or slightly above 2019 levels. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. FINANCIERE JIMENEZ Company Profile | COTTENCHY, HAUTS DE FRANCE, France 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 market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. Over-performance of all categories, restocking wardrobe in the rising post-streetwear era. 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 customer wants a seamless experience to shop anywhere, anytime. 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). The year of 2021 confirmed Chinas growing importance in luxury, together with a bright evolution for European and American customers. Despite worsening macroeconomic indicators globally and specific challenges in China, the sector performed strongly across quarters, and it is likely to have reached 353 billion in retail sales value in 2022, marking an advance of 22% at current exchange rates (or 15% at constant exchange rates) vs. 2021. Chinas luxury market is expected to recover by the second half of 2023. Abstracts are available in the press releases area. Bain & Company expects the industry to recover by 2022 or 2023. Our 11th annual report looks at the pandemics effects, the industrys impressive recovery, and the possibilities ahead. Physical stores are distribution centers for online. 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. That reflected a renewed value proposition in the US and successful reengagement with tourists in Europe. Over the past twenty years, wholesales share of the market dropped by 72% in 2010 to 51% in 2021, with the biggest drop from 2019 when it declined from 60%. By 2030, luxury should have expanded beyond its traditional business model, typically defined by sales of products, transcending an original form rooted in craftmanship and functional excellence. What other changes can we expect looking at consumers age? Evolving luxury map: new cities emerging, large cities back and persisting suburban areas. 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 Luxury Industry: Accelerating and Advancing Corporate The experiences sector, including travel and any in-person brand experiences, is still way below its pre-covid levels, mostly because of travel restrictions. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. 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. 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. These consumers are hungry for unique products and experiences, putting brands VIC (very important client) strategies into overdrive. Global Powers of Luxury Goods 2022 | Deloitte Global China's luxury market is expected to recover between H1 and H2 2023. A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. Bain Warns China Luxury Growth to Further Decelerate in 2022 Global Powers of Luxury Goods 2022. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. Fashion jewelry showed solid growth. 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.) Now distribution is split virtually down the middle, half through wholesale and half through retail. 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. The customer centricity honed in recent years is another source of resilience for the industry, as is the multi-touchpoint ecosystem that luxury has developed. Within the personal luxury segment, only shoes (23 or $26 billion), jewelry (22 or $25 billion), and leather accessories (62 or $70 billion) will beat 2019 results, up 5%, 3% and 4% respectively. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. 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. 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.. The market was constrained by prolonged Covid lockdowns in the second quarter, which affected consumer confidence and resulted in lackluster performance across all categories and channels (including online). 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 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. One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. Bain & Company is the global consulting firm that helps ambitious leaders transform their companies into tomorrow's world leaders. The prospects for personal luxury goods out to 2030 are positive. 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. And the data is continually updated so that you can track current trends. Bain & Company analyzes for Fondazione Altagamma the market and financial performance of more than 280 leading luxury goods companies and brands. Omnichannel retailing and a major shift in passenger mix are poised to transform traditional airport shopping. South-east Asia and Korea are winning in terms of growth and potential. 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. Bain & Co. partner: Luxury brands seen a 'roaring start' to 2022 CNBC International TV 331K subscribers Subscribe 694 views 1 year ago Federica Levato, a partner at Bain & Company,. Source: Deloitte Touche Tohmatsu Limited. 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. Casual categories, such as fussbett sandals and Wellington boots, are on the rise. All markets fared well throughout the year, aided by healthy domestic demand and the return of tourists from the US and Middle East. 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. According to the latest Bain & Company Study with Altagamma, the segment will continue to expand until 2030 despite the . We therefore forecast that the market value of personal luxury goods will rise to between 540 billion and 580 billion by the end of the present decade, from an estimated 353 billion in 2022an increase of more than 50%. Rather than selling into stores wholesale and lose margin, power brands are going to pay rent instead, as they are already doing in their mono-brand stores which advanced 3% from 2019 to capture 32% share of market. 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. But what's the current scenario? 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. 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.