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. Only luxury cruises are down relative to both 2019 and 2020. In 2021, they accounted for around 30% of new customers that entered the market since 2019, which is a total of 25% of the Personal Luxury Goods market. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. The market for personal luxury goodsthe heart of the entire luxury industryenjoyed another year of strong double-digit growth. As sales of secondhand goods on online platforms soared, brands are moving to increase their direct control of the market. Bain & Company analyzes for Fondazione Altagamma the market and financial performance of more than 280 leading luxury goods companies and brands. Gourmet food and fine dining grew 12% at current exchange rates to 57 billion, completing its recovery to prepandemic levels, as social restrictions were lifted across major cities. South-east Asia and Korea are winning in terms of growth and potential. Not all sectors can enjoy stable recovery, however. 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. 2022 Diversity, Equity, and Inclusion Report. 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. Bookmark content that interests you and it will be saved here for you to read or share later. The market for personal luxury goodsthe core of the core of luxury segments and the focus of this analysissaw impressive growth in 2022, coming on the heels of the V-shaped Covid rebound enjoyed in 2021. Shoes grew by 20%22% compared with 2021 to reach 28 billion. In 2022, the luxury market generated positive growth for 95% of brands. Even though this market is constantly improving since Q3 2020, there still is some uncertainty when it comes to the next holiday season. Omnichannel retailing and a major shift in passenger mix are poised to transform traditional airport shopping. In 2021, the personal luxury market is expected to grow 1 percent compared to 2019 and 29 percent compared to 2020. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (DTTL), its global network of member firms, and their related entities (collectively, the Deloitte organization). 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. 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. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. 2023. 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, today's report concludes. Local consumptions impacted by the slow vaccine adoption. 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. Across 63 offices in 38 countries, we work alongside our clients as one team with a. 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 coming years, the spending of Gen Z and 'Gen Alpha' is set to grow some three times faster than for other generations until 2030, making up a third of the market. Online sales rose 20% from 2021 to 2022 to reach an estimated 75 billion. Global Powers of Luxury Goods 2022. Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. 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. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. South Korea back to 2019 levels: full repatriation of local customers over-compensate for the lack of tourism. Uber-luxury jewelry outperformed globally, as did iconic pieces and lines. That ratio has come down from 3.4 times in 2018. Required fields are marked *. The overall luxury industry tracked by Bain & Company encompasses both luxury goods and experiences. 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. Local Japanese consumption was solid, and the market also benefited from the return of tourists after the country reopened to visitors. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. 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.) Best performing categories of 2020 are already beyond 2019 in 2021, watches and beauty on par, apparel is still lagging. 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. 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. Monobrand websites gained further ground, raising their share to about 45% of the online segment, up from 43% in 2021. 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. April 19, 2023. India Private Equity Report 2023 | Bain & Company Brands continued to exert more control over their distribution, with directly operated channels increasing in importance again. When typing in this field, a list of search results will appear and be automatically updated as you type. Prospects for personal luxury goods market out to 2030 are also highly positive, today's analysis concludes. (Getty Images) By Tamison O'Connor 21 June 2022 Specialty retailers went from 20% share of the personal luxury goods market in 2019 to 16% in 2021, a 10% decline in sales. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Please read and agree to the Privacy Policy. Within accessories, leather goods grew by 23%25%, far surpassing its pre-Covid levels (up 39%41% compared with 2019). Bain: China's Luxury Market Contracted 10 Percent in 2022 Across 64 cities in 39 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. Global luxury goods market to grow 21 percent in 2022 to 1.4 trillion Opportunities include entering a growing market, developing a network-based business model, showing commitment to sustainability, gathering data on customers and more. Post-streetwearis emerging as the new look. The robust performance in 2022 suggests that growth should stay healthy for the personal luxury goods market in the medium term. Sales of private yachts and jets grew by 18% at current exchange rates relative to 2021, reaching 26 billion. But what's the current scenario? The industry is poised to see further expansion next year and for the rest of the decade to 2030, even in the face of economic turbulence. 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 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 spending of Gen Z and the even younger Generation Alpha is set to grow three times faster than other generations through 2030, making up a third of the market. Source: Deloitte Touche Tohmatsu Limited. 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. 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. Bain & Company recently released its 20 th annual Luxury Study, which underlines the resurgence in the global luxury market in 2021 after a contraction in 2020. 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. Luxury yachts confirming positive momentum, with growth in deliveries paired with sharp growth in order books. 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. Performance was particularly robust in the first half of the year. Cultural relevance and evolving values ask for a new value-creation model in customer engagement. Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. Many reported sales above pre-pandemic levels, driven mainly by store re-openings, strong ecommerce growth and normalizing consumer demand for their luxury brands. Read More USD 1,325 Add To Cart The prospects for personal luxury goods out to 2030 are positive. 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. China to be world's No 1 luxury market by 2025, Bain & Co forecasts "):e("#nl2go_form").html("Unexpected error. 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 21st edition of the Bain & CompanyAltagamma Luxury Study, says today. Success online at least partly depends on the amount of advertising dollars pumped into online channels. 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. Your email address will not be published. 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.. 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. If we have selected the wrong experience for you, please change it above. The year 2022 saw a global tempering of the peak activity witnessed in 2021, triggered by tightening monetary policies across American and European markets as economies emerged from a Covid-19-induced suppression in economic activity. The luxury markets consumer base is broadening with some 400 million consumers in 2022 expected to expand to 500M by 2030. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. 3.0 experiences (such as virtual stores, digital shopping assistants, and ultra-luxury travel and hospitality). There will be some changes in the growth in luxury spending by nationality. Latin America experienced solid growth, especially in Mexico and Brazil. Brands invested heavily (and successfully) to fuel demand. For any questions or to arrange an interview, please contact: Gary Duncan (London) Email: gary.duncan@bain.com, Orsola Randi (Milan) Email: orsola.randi@bain.com Tel: +39 339 327 3672. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. Later on in 2021 that dip turned into a V-shaped recovery, with the value in 2021 being slightly bigger than before the pandemic. Luxury Goods: trends and predictions for 2022 (Bain Report). 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. In general, luxury brands have the chance to secure common prosperity, but they will need to challenge and adapt their strategy. Department stores declined by 8% and went from 18% SOM to 15% in 2021. Examples include: acceleration of middle class and consumption upgrade, pressure on uber-wealth, delayed spending given current uncertainty. Luxury is back to the future is the title of the latest market study worldwide by Bain Altagamma. The studys lead author is Claudia DArpizio, a Bain partner in Milan. Global Luxury Goods Market Seen Growing 21% in 2022 to 1.4 Trillion Euros. Demand for luxury experiences has been improving, but this segment will be the last of the three to regain its 2019 levels, probably in 2023. The New ROI: Defy Uncertainty by Boosting Return on Innovation | Bain However, Chinese lockdowns, a continued shortfall in international Asian tourism, and limited business travel constrained total market growth. 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. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. 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. The global ranking of luxury sales by region changed in 2022, as the Americas regained the top position for personal luxury goods sales. Report. Globally, things should go back to normal between 2023 and 2024. When it comes to the overall value of this market, luxury cars significantly outperform all of the other components combined. The apparel category grew by 22%24% in 2022, aided by wardrobe restocking. However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. A powerful factor for sector growth in the rest of the decade will be generational trends,the analysis reports. The customer wants a seamless experience to shop anywhere, anytime. 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. Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. 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 21st edition of the Bain & CompanyAltagamma Luxury Study, says today. Demand for personalization and digital connectivity rose. A customer carries shopping bags from Louis Vuitton, Chanel and Christian Dior. Luxury Sales Set to Grow by 5 to 15% This Year, Bain Says What other changes can we expect looking at consumers age? Taken together, the study characterizes these trends as the nouvelle vague or new wave of developments for the sector. Bain & Company is estimating growth for the personal luxury goods market to reach 360-380 billion euros, or $378-400 billion at the current exchange rate, by 2025. After softening in Aug-Sept, consumption restarted strong in October despite scattered lockdowns. 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.". Carina Lau, Pansy Ho, Michelle . In coming years, the spending of Gen Z and Gen Alpha is set to grow some three times faster than for other generations until 2030, making up a third of the market. After 20 years of large expansion and deep evolution, Covid-19 has fast forwarded and anticipated some of the key changes for the next 20 years of the global luxury market. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. The latest Bain-Altagamma Luxury Goods Worldwide Market Study forecasts increased resilience to recession after robust 2022 growth. 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 . Sales of fine wines and spirits hit 96 billion, up 16% on 2021. China's luxury market is expected to recover between H1 and H2 2023. *I have read thePrivacy Policyand agree to its terms. However, the spots will be replaced by new consumers, mostly Generation Y and Z. The customer is going to shop and going to shop in different ways, Sadove affirms. Luxury Market Rebounds In 2021, Set To Return To Historic Growth Trajectory 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. The makeup and fragrances categories led growth. Wealthy individuals turned to private jets more in 2022, due to their perceived safety and efficiency vs. commercial travel. Small leather goods gained further traction. Find Construction Companies in Cottenchy - Dun & Bradstreet 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. Among the rising stars, India stands out; its luxury market could expand to 3.5 times todays size by 2030. Retail continues to dominate, while online channels are seeing a normalization in their growth. Driven by the dichotomic impact of pandemic outbreak in 2020, the luxury food market is showing significant difference in growth rates within its components. Department stores experienced faster growth than in previous years, gaining 20%. 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. Further, some 40% of the online segment is now controlled by websites devoted to a single brand, rather than multi-brand marketplaces. After a severe contraction in 2020 due to the Covid-19 pandemic, the market grew back to 1.15 trillion in 2021 and surprised everyone in 2022 by further growing 19%21%, according to our estimates. The Russian market was mostly inactive due to war-related suspension of operations. 1 Richemonts FY2021 financial year ended in March 2021, so saw a greater negative impact of the COVID-19 pandemic on their FY2021 results compared with other Top 5 companies which had later year end dates. Evolving luxury map: new cities emerging, large cities back and persisting suburban areas. Personal Luxury Goods Market Has Recovered Ahead Of Schedule - Forbes The estimated value for the whole market in 2021 is B 1.140. 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. Sparkling wine (and not just Champagne) gained share over still. ")},function(n){console.log(n),e("#nl2go_form").html("Unexpected error")})})})}(jQuery); 2023 E-commerce Germany and E-commerce Berlin. Interestingly enough, the pandemic caused this market to experience its worst dip in history. 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. Europe managed to recover beyond pre-Covid 2019 levels thanks to solid domestic demand, alongside a boost from US and Middle Eastern tourist shoppers. 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. MILANNovember 15, 2022The global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. 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. Now more than ever, the industry is facing paradigm shifts in all areas: production and resources, life cycle, customer relationships, corporate responsibility, and globalization. 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. Global luxury goods market takes 2022 leap forward and remains poised In spite of 110% year-over-year growth at current exchange rates, sales were still down 7% from their 2019 level. The pandemic-fueled interest in consuming gourmet food at home continued, boosting select food retailers and fostering demand for culinary education. 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. Tech-enabled profit pools and strong generational trends to drive 60%+ market growth to 2030. Consumption was very strong in Europe. continued focus for large established brands, with few exceptions intercepting the next gen of customers. Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. 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. All personal luxury goods categories performed well in 2022, with double-digit growth rates across the board. 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 todays report. 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 coming years will see a further blurring of the boundaries between 'mono-brand' and ecommerce, which will increasingly push brands to take an 'Omnichannel 3.0' approach, enabled and enhanced by new technologies. 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. Strong cross category, generation and price growth.

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