bain and company luxury report 2022

All rights reserved. Opportunities include entering a growing market, developing a network-based business model, showing commitment to sustainability, gathering data on customers and more. Unfortunately, it doesnt show signs of improving sooner than in 2024 back to its 2019 levels. The luxury markets consumer base is broadening with some 400 million consumers in 2022 expected to expand to 500M by 2030. 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. More specifically, they make up for almost 50% of the whole market. 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). 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.". 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. The studys lead author is Claudia DArpizio, a Bain partner in Milan. It seems that traditional market segmentation lost its relevance. And the data is continually updated so that you can track current trends. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. Retail continued to grow faster than wholesale and reached parity in terms of market share. Stay ahead in a rapidly changing world. Its not an either-or question but both. 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. 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. (Photo by Hollie Adams/Getty Images). Interestingly enough, the pandemic caused this market to experience its worst dip in history. 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. Bain & Company expects the industry to recover by 2022 or 2023. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. 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. In 2022, the luxury market generated positive growth for 95% of brands. The global luxury market is projected to grow by 21% in 2022, reaching 1.4 trillion; the personal luxury goods. Read the report. Department stores experienced faster growth than in previous years, gaining 20%. Among the rising stars, India stands out; its luxury market could expand to 3.5 times todays size by 2030. 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. 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. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. 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. High-end brands want to control their own destiny and how they appear and are presented in the store, he says, adding, So we are not going to move away from department stores but change the economic relationship they have with them to concessions.. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. Luxury spending continued to skew toward products, with steep growth in personal luxury goods and more moderate growth in experience-based goods. Evolving luxury map: new cities emerging, large cities back and persisting suburban areas. Translating wholesale and licensing revenue to its retail equivalent, Bain estimates global personal luxury goods sales will reach 283 billion ($324 billion) by year end, marking a 1% increase. 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. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. The Middle East is very strong throughout markets, with Dubai and Saudi Arabia leading growth. Art benefited from being seen by the wealthy as an alternative asset to hedge against volatility in financial markets. 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.. 9 min read. However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. 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. But the Global State of the Consumer Tracker makes it easy for you to access consistent, high-quality data on consumer sentiment and behavior in retail, consumer products, automotive, and travel. Stay ahead in a rapidly changing world. The second-hand luxury market, valued at $38 billion, is now also worth luxury's attention, as it is growing more than twice as fast as first-hand luxury. 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. ")},function(n){console.log(n),e("#nl2go_form").html("Unexpected error")})})})}(jQuery); 2023 E-commerce Germany and E-commerce Berlin. 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. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. Sales of private yachts and jets grew by 18% at current exchange rates relative to 2021, reaching 26 billion. 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. Get the latest business insights from Dun & Bradstreet. 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 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. Abstracts are available in the press releases area. "):200==n.status?e("#nl2go_form").html("You are already subscribed. 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. In 2022, the luxury market generated positive growth for 95% of brands. Young and affluent Chinese Gen Z consumers find local brands much more aspirational and desirable than millennials or Gen Xers, he wrote, as he observes the native Gen Z consumers are exceptionally proud of their Chinese culture heritage and its future potential. These are key findings from the 21st edition of the Bain & Company-Altagamma Luxury Study, a collaboration between Bain & Company and Fondazione Altagamma, the trade association of Italian luxury goods manufacturers. 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 . The pandemic literally closed the doors in physical retail and theyve only partly opened in 2021. 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. The apparel category grew by 22%24% in 2022, aided by wardrobe restocking. The companies making up the Top 5 have been relatively stable, with only LOral Luxe entering the Top 5, replacing Richemont*, Chart 1: Luxury goods sales US$ million: FY2016 & FY2021. When it comes to the overall value of this market, luxury cars significantly outperform all of the other components combined. 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. Analysis of financial performance and operations for financial years ended through 31 December 2021 using company annual reports, industry estimates and other sources. Further, some 40% of the online segment is now controlled by websites devoted to a single brand, rather than multi-brand marketplaces. Some countries will finally see some long awaited recoveries: China, Japan and European countries. When typing in this field, a list of search results will appear and be automatically updated as you type. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. The luxury market now appears better equipped to cope with economic turbulence with its consumer base both larger and more concentrated, and customer-centricity and a multi-touchpoint ecosystem set to provide resiliency amid disruptions, the report finds. Casual categories, such as fussbett sandals and Wellington boots, are on the rise. Photo: Shutterstock Around 21 per cent of global consumer spending on luxury goods in 2021. The customer is going to shop and going to shop in different ways, Sadove affirms. 'Gen Y' and 'Gen Z' accounted for the entire growth of the market in 2022, it notes. Driven by the dichotomic impact of pandemic outbreak in 2020, the luxury food market is showing significant difference in growth rates within its components. Luxury hospitality, gourmet food and fine dining, fine art, private jets and yachts will remain below 2019 levels, though up compared to 2020. Monobrand stores were boosted by the willingness of customers to return to in-person shopping. The Russian market was mostly inactive due to war-related suspension of operations. These domains are rich with opportunities for luxury brands but investments for future growth are crucial.". Sales of fine wines and spirits hit 96 billion, up 16% on 2021. In Europe, high-end Asian automakers, particularly Chinese brands, have gained share from local rivals. Luxury goods leader LVMH increased its share of the Top 5 from 39.1% in FY2016 to 44.9% in FY2021. Fashion ranking: Top 20 clothing retailers in Germany. Online should become the leading channel for luxury purchases with an estimated 32%34% market share, followed by monobrand stores (30%32% market share). 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. Prospects for personal luxury goods market out to 2030 are also highly positive, today's analysis concludes. But with more turbulence ahead, the power luxury brands are best positioned to power on through. What Sadove sees shifting in distribution is a move toward more concession models in retail from traditional wholesale-to-retail distribution. *I have read thePrivacy Policyand agree to its terms. People under 40 years old will remain main drivers for growth up to 2020 in the luxury goods market. The worlds Top 5 luxury goods companies generated revenues of US$122 billion in FY2021. 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. 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. Small leather goods gained further traction. Heinemann Outperforms Travel Retail Rivals With 81% Growth To $4.2 Billion In 2022, Airport Retail Confectionery Firsts From Oreo And Lindt, Both With Live Chefs, Consumer Demand Is Slowing, Good For Government Policy Wonks, Bad For Retailers, An Exclusive Retail Service Experience Is At The Center Of CB2's New Design Shop, Whats Working - And Not - In Mobile Commerce (Part 1 Of 2), Magna reports global digital media grew by nearly one-third year-over- year in 2021, China can be a risky bet for Western luxury brands, Chinese Gen Z consumers find local brands. 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. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. Even though this market is constantly improving since Q3 2020, there still is some uncertainty when it comes to the next holiday season. Solid rebound, polarized between entry prices and tops items. 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. In 2021, the personal luxury market is expected to grow 1 percent compared to 2019 and 29 percent compared to 2020. Secondhand luxury goods sales are not included in Bains personal luxury goods market size estimate, but in 2021, Bain reports they will account for 33 billion or $38 billion in sales, up 27% from 2019. The US luxury market proved very strong in 2022. 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 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. The customer wants a seamless experience to shop anywhere, anytime. Shoes, leather, jewelry, watches, beauty and apparel these categories can expect changes, with the highest growth between 2019 and 2021 being the shoes category. The personal luxury goods market reached an estimated 113 billion in the Americas, growing 25% over 2021. 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. April 19, 2023. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. Daniel Langer, founder of luxury consultancy quit and contributor to Jing Daily, warns of China chic.. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. As a result, Bain-Altagamma analysis sets out two scenarios, with sales growth in the personal luxury goods market set to be between 3 to 5% or 6 to 8% (at constant exchange rates), depending on the strength of economic recovery in China and the ability of the US and Europe to withstand economic headwinds. The latest Bain-Altagamma Luxury Goods Worldwide Market Study forecasts increased resilience to recession after robust 2022 growth. 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. 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 estimated value for the whole market in 2021 is B 1.140. Womenswear and menswear grew at about the same pace. Sales of luxury cars, the biggest portion of the overall market, hit a new record, reaching an estimated 566 billion, 6% more than 2021 at current exchange rates and 3% above 2019. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. 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. 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. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. 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. Spirits grew faster than wine, with status spirits growing internationally and across categories, tapping into usage occasions once reserved for wines. Both LVMH and Kering have seen their luxury goods sales more than double. 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. South Korea back to 2019 levels: full repatriation of local customers over-compensate for the lack of tourism. Beauty reached 69 billion, up a mere 14%16% on 2021 (but still double its pre-Covid growth rate in 2019). The fine art market grew 13% to 39 billion, as the ranks of potential buyers swelled and new Asian art hubs strengthened. Opinions expressed by Forbes Contributors are their own. 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. LONDON, ENGLAND - DECEMBER 27: A woman holds a Louis Vuitton shopping bag on Clifford Street on [+] December 27, 2021 in London, England. 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. 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. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. "):e("#nl2go_form").html("Unexpected error. Luxury Goods: trends and predictions for 2022 (Bain Report). 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. Over-performance of all categories, restocking wardrobe in the rising "post-streetwear" era. Together, we achieve extraordinary outcomes. 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. These domains are rich with opportunities for luxury brands but investments for future growth are crucial.. Older generations will be permanently leaving the luxury market. Bain & Company is a global consultancy that helps the worlds most ambitious change makers define the future. 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. Only luxury cruises are down relative to both 2019 and 2020. Hong Kong and Macau were weaker spots, while Taiwan slowly recovered. 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. By Claudia D'Arpizio, Federica Levato, Filippo Prete, and Jolle de Montgolfier. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. Globally, things should go back to normal between 2023 and 2024. Overall, we estimate that in 2022 the luxury markets overall retail sales value grew by 19%21% to 1.38 trillion, or 8%10% above 2019 levels. Struggling Australia which only recently reopened after months of lockdown. Chart 2: Luxury goods sales YoY growth FY2019-FY2021. 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%. The global luxury goods market took a leap forward in 2022, despite uncertain market conditions. 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. Sales growth accelerated to 28%, equivalent to 1.3 times the growth rate for new luxury goods. MILANNovember 15, 2022The global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. 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 luxury market's consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. How To Run A Mobile-First Web-To-Print Ecommerce Website In 2022. Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. Taken together, the study characterizes these trends as the nouvelle vague or new wave of developments for the sector. This is a BETA experience. Retail continues to dominate, while online channels are seeing a normalization in their growth. We earned a platinum rating from EcoVadis, the leading platform for environmental, social, and ethical performance ratings for global supply chains, putting us in the top 1% of all companies. You may opt-out by. Travel retail is in recovery mode, at least in Western markets, but not yet back on its pre-Covid track. A report by Bain & Company reveals China is set to become world's largest luxury market by 2025. Sustainability remains a focus for both consumers and shipyards, from greener propulsion systems to design-for-disassembly solutions that make yacht materials more recyclable. 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. The nouvelle vague the new 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 DArpizio, a Bain & Company partner and leader of Bains Global Luxury Goods and Fashion practice, the lead author of the study. Their performance across geographies and product sectors is based on publicly available data for FY2021 (which we define as financial years ending within the 12 months from 1 January to 31 December 2021). We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Major technology growth companies shed 140,000 employees in 2022, followed by a second wave of layoffs in the first weeks of 2023. Bain Warns China Luxury Growth to Further Decelerate in 2022 As China began to crack down on various sectors under the name of common prosperity, growth throughout the second half of 2021. 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. Market favored by positive consumption tailwinds, yet partially slowed-down by disruption across the supply chain. Fashion jewelry showed solid growth. 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. The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. 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 global ranking of luxury sales by region changed in 2022, as the Americas regained the top position for personal luxury goods sales. Mainland China should overcome the Americas and Europe to become the biggest luxury market globally (25%27% of global purchases). 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. Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. Four growth engines will profoundly reshape the luxury market by 2030: Chinese consumers should regain their pre-Covid status as the dominant nationality for luxury, growing to represent 38%40% of global purchases. 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. 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. Find info on Construction companies in Cottenchy, including financial statements, sales and marketing contacts, top competitors, and firmographic insights. The economic model will continue to evolve. INTERNATIONAL. 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. 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. 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. 2022 Diversity, Equity, and Inclusion Report. Department stores declined by 8% and went from 18% SOM to 15% in 2021. Asia (excluding Japan) switched to second position, followed by Europe. Brands invested heavily (and successfully) to fuel demand. The composite luxury goods sales of the Top 5 companies grew by 91% over the five years FY2016-FY2021. The threats revolve mostly around understanding the winning value proposition, cracking operation complexity and defining logo and rebranding strategies. In the past year retailers faced some strong economic headwinds against the backdrop of an unpredictable virus and its resurging variants. Now more than ever, the industry is facing paradigm shifts in all areas: production and resources, life cycle, customer relationships, corporate responsibility, and globalization. There will be some changes in the growth in luxury spending by nationality. Top 5 Five-year view The composite luxury goods sales of the Top 5 companies grew by 91% over the five years FY2016-FY2021. And even more troubling, only seven brands control one-third of the personal luxury goods market. These consumers are hungry for unique products and experiences, putting brands VIC (very important client) strategies into overdrive. What other changes can we expect looking at consumers age? 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.

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