According to Bain & Company the global luxury goods market is poised for further growth despite economic turbulence. The 21st edition of the Bain & Company–Altagamma Luxury Study states that the global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. And it remains poised to see further expansion next year, and for the rest of the decade to 2030, even in the face of present economic turbulence.
The global luxury goods industry overall is projected to achieve a market value of €1.4 trillion in sales revenue this year, growing by 21% from 2021 (at current exchange rates).
The personal luxury goods industry saw a further growth acceleration this year, coming on the heels of the V-shaped rebound enjoyed in 2021, the research indicates. 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 versus the previous year.
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, 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.
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.
Luxury brand players are continuing to invest in future growth, even in the face of high inflation and rising costs so their profitability is slightly decreasing following an unprecedented increase 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, the lead author of the study.
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 study notes that even with a possible global recession next year the impact on the industry could be different from that of the 2008-09 global financial crisis.
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.
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