bain and company luxury report 2022 bain and company luxury report 2022

These consumers are hungry for unique products and experiences, putting brands VIC (very important client) strategies into overdrive. Commenting on the critical trends and themes for the luxury industry up to 2030, Federica Levato, partner at Bain & Company and leader of the firms EMEA Luxury Goods and Fashion practice, co-author of todays 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. 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. Accessories remained the largest personal luxury goods category and grew by 21%23%. 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. Spending on experiences will be the last luxury outlay to recover historical highs given its reliance on the resumption of international tourism and business travel. 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. Lighting and living/bedroom categories benefited the most, as consumers looked for more comfort, functionality, and beauty. Consumers overindulged on products, but the willingness to go back to experiences is at an all-time high we can read in the report. The luxury market's consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. 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. All personal luxury goods categories performed well in 2022, with double-digit growth rates across the board. Now distribution is split virtually down the middle, half through wholesale and half through retail. Fondazione Altagamma is led by Matteo Lunelli, who was named chairman in 2020. Opportunities include entering a growing market, developing a network-based business model, showing commitment to sustainability, gathering data on customers and more. But because of its vast cultural and geo-political differences, China can be a risky bet for Western luxury brands. 2022 Diversity, Equity, and Inclusion Report. Fashion jewelry showed solid growth. The secondhand luxury goods market rose to 43 billion in 2022. International travel disruptions, duty-free opportunities, and digitalization continue to strengthen domestic spending in 2021. Europe managed to recover beyond pre-Covid 2019 levels thanks to solid domestic demand, alongside a boost from US and Middle Eastern tourist shoppers. 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. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. Examples include: acceleration of middle class and consumption upgrade, pressure on uber-wealth, delayed spending given current uncertainty. More specifically, they make up for almost 50% of the whole market. 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. Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry. 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. Only fine wines and spirits (77 or $88 billion) and high-end furniture and housewares (45 or $51 billion) will exceed 2019 levels, up between 12% to 14% and 13% to 15% respectively. Luxury spending continued to skew toward products, with steep growth in personal luxury goods and more moderate growth in experience-based goods. This could include revenues generated by: the metaverse and NFTs (such as through collectibles and other new products and services); the monetization of communities (through virtual events and data monetization, for instance); brand-related media content (such as movies, music, and art); secondhand luxury goods (by bringing more secondhand sales in-house, for instance); and. Market favored by positive consumption tailwinds, yet partially slowed-down by disruption across the supply chain. Read More USD 1,325 Add To Cart 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 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. Globally, things should go back to normal between 2023 and 2024. Chinas luxury market is expected to recover by the second half of 2023. Here it comes: the second stage of our E-commerce Germany Awards 2022! Over-performance of all categories, restocking wardrobe in the rising post-streetwear era. 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). Luxury spending trends in 2022 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. After softening in Aug-Sept, consumption restarted strong in October despite scattered lockdowns. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. 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. 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. India Private Equity Report 2023. Solid fundamentals are set to boost the markets value to between 540 billion and 580 billion by the end of the present decade, from an estimated 353 billion in 2022a rise of 50% or more. Weak Hong Kong vs mixed Taiwan and Macau. Cision Distribution 888-776-0942 Its not an either-or question but both. Both LVMH and Kering have seen their luxury goods sales more than double. 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. For information, contact Deloitte Global. When segmented into goods vs. experiences, spending continued to skew to tangible products in 2022. Global Powers of Luxury Goods 2022. Gen Y and Gen Z accounted for the entire growth of the market in 2022, it notes. 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. Your email address will not be published. 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. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. 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 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. Luxury is back to the future is the title of the latest market study worldwide by Bain Altagamma. Three of the Top 5 companies are based in France. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Bain and Company and the Italian trade association Fondazione Altagamma are out with their 2021 study of the global luxury market. Broader meanings and business models will emerge. 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 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. We work with ambitious leaders who want to define the future, not hide from it. Online sales rose 20% from 2021 to 2022 to reach an estimated 75 billion. This is a BETA experience. 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. The impact of a possible global recession on the industry in 2023 could differ from the impact of the 200809 global financial crisis. Sales growth accelerated to 28%, equivalent to 1.3 times the growth rate for new luxury goods. The estimated value for the whole market in 2021 is B 1.140. Retail continues to dominate, while online channels are seeing a normalization in their growth. It seems that traditional market segmentation lost its relevance. In general, luxury brands have the chance to secure common prosperity, but they will need to challenge and adapt their strategy. Get the latest business insights from Dun & Bradstreet. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. Driven by the dichotomic impact of pandemic outbreak in 2020, the luxury food market is showing significant difference in growth rates within its components. 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. While the report states, there is still a place for rising stars in the industry, one wonders where? Jewelry sales in 2022 are estimated to have risen to 28 billion, up 23%25% from 2021. *I have read thePrivacy Policyand agree to its terms. 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. In spite of 110% year-over-year growth at current exchange rates, sales were still down 7% from their 2019 level. Omnichannel retailing and a major shift in passenger mix are poised to transform traditional airport shopping. This reports reveals and describes what they are: China doubling and Americas booming, Europe and Japan are still in recovery mode. A powerful factor for sector growth this decade will be generational trends. The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. Consumption was very strong in Europe. Ongoing Covid-19 restrictions and economic uncertainty caused the first personal luxury market decline in five years. The higher and top end of the luxury market have been expanding and accounted for some 40 percent of market value in 2022 compared with 35 percent in 2021. China represented 12 percent of total sales in 2022, but Luca Lisandroni, the company's co-CEO, is already calling 2023 a "golden year" for the China market. 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. Please see www.deloitte.com/about to learn more. Prospects for personal luxury goods market out to 2030 are also highly positive, todays analysis concludes. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. 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. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. This article is a preview of the Top 10 companies listed in the upcoming Global Powers of Luxury Goods 2022, The top 5 companies are the powerhouses of luxury brand sales, About the Global Powers of Luxury Goods report, Global Powers of Luxury Goods | Deloitte | global economy, Luxury Consumer, Infrastructure, Transport & Regional Government, Telecommunications, Media & Entertainment, update your settings to accept analytics and performance cookies. Beauty companies Este Lauder and LOral Luxe have seen slower growth in the sales of their owned and licensed luxury goods brands than multiple luxury goods companies LVMH, Kering and Chanel. 9 min read. What other changes can we expect looking at consumers age? There will be a new value creation model (high tech & high touch), new KPIs to track (earned growth rate) and clear positive results (churn rate reduction) a lot to look forward to. Consumer expectations for service levels are rising too, with brands embracing direct-to-consumer models to create a more luxurious shopping experience at every stage. The nonfungible token (NFT) market stabilized after a wave of speculative interest from investors. But with more turbulence ahead, the power luxury brands are best positioned to power on through. The global luxury market is projected to grow by 21% in 2022, reaching 1.4 trillion; the personal luxury goods. 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 today's size by 2030, propelled by an increasing interest and evolving attitudes and behaviors among (young) customers towards luxury goods. 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 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. The threats revolve mostly around understanding the winning value proposition, cracking operation complexity and defining logo and rebranding strategies. Success online at least partly depends on the amount of advertising dollars pumped into online channels. "):e("#nl2go_form").html("Unexpected error. 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 today's report. 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. Womenswear and menswear grew at about the same pace. 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). If we have selected the wrong experience for you, please change it above. Bain & Company expects the industry to recover by 2022 or 2023. Daniel Langer, founder of luxury consultancy quit and contributor to Jing Daily, warns of China chic.. Small leather goods gained further traction. The apparel category grew by 22%24% in 2022, aided by wardrobe restocking. 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. 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. This article is a preview of the Top 5 companies which will be listed in the upcoming Global Powers of Luxury Goods 2022. 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. Global Wealth and Luxury Report 2022 March 2022 The pandemic has had an unprecedented impact on ultra-high net worth, high net worth, and affluent populations; their wealth, as well as their spending habits on luxury goods and services. Some tourists bounce back over the summer. This article is a preview of the Top 5 companies listed in the upcoming Global Powers of Luxury Goods 2022, which will be published in late 2022. Your email address will not be published. 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. 2023. 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. Sadove suggests these numbers may not be as stark as they first appear. The year of 2021 confirmed Chinas growing importance in luxury, together with a bright evolution for European and American customers. Generation Y (millennials) and Generation Z accounted for all of the markets growth in 2022. The worlds Top 5 luxury goods companies generated revenues of US$122 billion in FY2021. 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. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Report. 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%. From insights to the performance of the market, through estimates for the approaching us 2022, all the way up to some key recommendations this study contains data no one from the Luxury Goods industry should overlook. 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. Carina Lau, Pansy Ho, Michelle . 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. This provides both opportunities as well as potential threats to brand, fashion platforms and investors. Even though this market is constantly improving since Q3 2020, there still is some uncertainty when it comes to the next holiday season. 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. The overall luxury industry tracked by Bain & Company encompasses both luxury goods and experiences. 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. Seventy-three of the Top 100 companies reported growth in luxury goods sales in FY2021, compared to only 20 companies in FY2020. DTTL does not provide services to clients. That reflected a renewed value proposition in the US and successful reengagement with tourists in Europe. Demand for high-end furniture and fixtures in commercial spaces was driven by an increasing appetite for refined aesthetics and higher quality. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. There will be some changes in the growth in luxury spending by nationality. Performance was particularly robust in the first half of the year. 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. 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. 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. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. While the industry has benefited from increased prices and a continued shift to higher-margin direct channels, the lower profit levels reflect luxury brands investment in future growth, particularly through increased marketing spending and ambitious transformation programs. 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. There are sectors that were affected by the pandemic much more, and one of them is experiences. Monobrand websites share grew from 30% in 2019. Intuitive service that goes beyond merely offering the human touch is becoming more crucial, and operators are increasingly looking to technology to automate predictable tasks and free employees to focus on the most important interactions. 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. A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. Now, brands are multi-price points to answer to different customer needs. The customer wants a seamless experience to shop anywhere, anytime. Retail continues to dominate, while online channels are seeing a normalization in their growth. Please read and agree to the Privacy Policy. 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.