Global luxury goods market poised for strong growth despite headwinds
By our News Team | 2022
Luxury sector is more than 20% up this year, and the good times will likely roll until the end of the decade, report says.
Despite highly uncertain economic and consumer market conditions, the global luxury goods market is in a post-pandemic renaissance and remains poised to see further expansion next year.
Indeed, the good times at the very top end of the consumer good market will likely continue to roll until 2030. This is according to the recently released 21st edition of the ‘Bain & Company – Altagamma Luxury Study’.
Photo by Odd Fellow on Unsplash
Bain is a prominent business consultancy operating in 39 countries, while the Altagamma Foundation is the Italian luxury brands committee composed of companies in the fields of design, fashion, food, jewellery, automobiles, and hospitality.
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.
Boosted by a strong market performance across quarters, and despite macro-economic indicators worsening globally and specific challenges in China, the personal luxury sector is set to see the value of its sales jump to US$366-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.
Lifting of pandemic restrictions in China is important
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 the evolution of European and American luxury consumer confidence in the face of rising inflation and cost of living pressures, plus potential recession in the US and European economies, the report notes.
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, the report concludes.
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, versus the unprecedented increase enjoyed in 2021.
“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 D’Arpizio, a Bain & Company partner and leader of Bain’s Global Luxury Goods and Fashion practice.
You can read more about the ‘Bain & Company – Altagamma Luxury Study’ report here.