bain and company luxury report 2022

DTTL (also referred to as Deloitte Global) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. Bain & Co. partner: Luxury brands seen a 'roaring start' to 2022 CNBC International TV 331K subscribers Subscribe 694 views 1 year ago Federica Levato, a partner at Bain & Company,. 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. 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 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. (Photo by Hollie Adams/Getty Images). 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. Prospects for personal luxury goods market out to 2030 are also highly positive, today's analysis concludes. In 2021, the personal luxury market is expected to grow 1 percent compared to 2019 and 29 percent compared to 2020. 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. Luxury Goods: trends and predictions for 2022 (Bain Report). 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. South-east Asia and Korea are winning in terms of growth and potential. Core high quality design market, already showing stronger-than-forecasted performance in last quarters of 2020, continuing on its growth path sustained by continued refocus of consumer spending on home, in particular on Living& Bedroom, outdoor and lighting. 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. Brands invested heavily (and successfully) to fuel demand. 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. As they seek new ways to connect with their customers, they are changing their approach and mindset by incorporating sustainability and digitalization into their long-term strategies, to align with consumers demands and new regulatory requirements. Evolving luxury map: new cities emerging, large cities back and persisting suburban areas. 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. The makeup and fragrances categories led growth. Recent studies Altagamma Studies archive Shoes grew by 20%22% compared with 2021 to reach 28 billion. Top 5 Five-year view The composite luxury goods sales of the Top 5 companies grew by 91% over the five years FY2016-FY2021. Jewelry sales in 2022 are estimated to have risen to 28 billion, up 23%25% from 2021. All luxury categories have now recovered to 2019 levels or better, with hard luxury, leather and apparel leading the resurgence following the pandemic. Demand for high-end furniture and fixtures in commercial spaces was driven by an increasing appetite for refined aesthetics and higher quality. The full report, which will be published in late 2022, will include a full analysis of the Top 100 companies, as well as luxury trends and special focus sections. continued focus for large established brands, with few exceptions intercepting the next gen of customers. 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. 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. Department stores experienced faster growth than in previous years, gaining 20%. Art-based NFTs still represent a limitedalbeit expandingportion of the overall market; artists are looking for ways to meaningfully integrate NFTs into fine arts. Global Luxury Goods Market Seen Growing 21% in 2022 to 1.4 Trillion Euros. Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. Further, some 40% of the online segment is now controlled by websites devoted to a single brand, rather than multi-brand marketplaces. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Chinas luxury market is expected to recover between H1 and H2 2023. India Private Equity Report 2023. Bain & Company is the global consulting firm that helps ambitious leaders transform their companies into tomorrow's world leaders. 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. Local consumptions impacted by the slow vaccine adoption. Shoes, leather, jewelry, watches, beauty and apparel these categories can expect changes, with the highest growth between 2019 and 2021 being the shoes category. 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. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Later on in 2021 that dip turned into a V-shaped recovery, with the value in 2021 being slightly bigger than before the pandemic. Taken together, the study characterizes these trends as the 'nouvelle vague' or 'new wave' of developments for the sector. "The nouvelle vague thenew 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. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. 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. Our 10-year commitment to invest more than $1 billion in pro bono services brings our talent, expertise, and insight to organizations tackling todays urgent challenges in education, racial equity, social justice, economic development, and the environment. Local Japanese consumption was solid, and the market also benefited from the return of tourists after the country reopened to visitors. SEA is still suffering from a lack of tourism. In order to extend the lifetime of luxury products, the second hand market will be booming in the years to come. However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. 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. 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). Within accessories, leather goods grew by 23%25%, far surpassing its pre-Covid levels (up 39%41% compared with 2019). There are few sources for data-driven insights to help consumer businesses understand and navigate these fast-changing times. Luxury yacht orders rose to a record level, amid solid growth in deliveries. Retail continued to grow faster than wholesale and reached parity in terms of market share. 9 min read. Photo: Shutterstock Around 21 per cent of global consumer spending on luxury goods in 2021. 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. 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 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. 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. The customer centricity honed in recent years is another source of resilience for the industry, as is the multi-touchpoint ecosystem that luxury has developed. About Bain & Company Bain & Company is a global consultancy that helps the world's most ambitious change makers define the future. Increasing market concentration, yet with high dynamism from rising stars. The high-end furniture and housewares market reached 53 billion, up 13% from 2021. 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. The prospects for personal luxury goods out to 2030 are positive. Countries coped with high inflationary . All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. India stands out; its luxury market could expand to 3.5 times todays size by 2030, propelled by younger customers and an expanding upper and middle class. 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. 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. Retail continues to dominate, while online channels are seeing a normalization in their growth. Growth was steady across regions as people finally realized travel ambitions previously blocked by Covid, using money they couldnt spend on trips during the pandemic. 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. Download By Bain & Company Scope: Global Mar 13, 2022 But with the future of the luxury market now on the shoulders of next-generation customers, expected to represent 70% of global purchases by 2025, and these customers keen on sustainability, a shift from firsthand to secondhand luxury goods can be expected. We work with ambitious leaders who want to define the future, not hide from it. 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. 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 . There are sectors that were affected by the pandemic much more, and one of them is experiences. Travel retail is in recovery mode, at least in Western markets, but not yet back on its pre-Covid track. The experiences sector, including travel and any in-person brand experiences, is still way below its pre-covid levels, mostly because of travel restrictions. The online channel's market share remained in line with 2021. Fashion jewelry showed solid growth. 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 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. 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. Worst dip in history for the personal luxury goods market: Personal luxury goods are items like jewelry, luggage, haute couture clothing, sports cars and more. Global Retail, Wholesale & Distribution Sector Leader, Managing Director | Deloitte Consulting LLP. The report reserves the most ink to the personal luxury market, the second largest at 283 billion ($322 billion) in sales, up 29% over 2020 to end the year +1% ahead of 2019. With 2022 already knocking on our doors, its time to step into another year full of new and interesting trends, figures and actions for the Luxury Goods market. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. These wildcards secondhand luxury, next-gen consumers and China may continue to test the strength, resilience and agility that Bain observes has enabled luxury brands to overcome the tremendous turbulence of the past two years. Solid rebound, polarized between entry prices and tops items. However, the profit erosion also reflects higher energy prices and increased labor costs. According to report co-author . Across 65 cities in 40 countries, we work alongside our clients as one team with a shared ambition to achieve extraordinary results, outperform the competition, and redefine industries. Broader meanings and business models will emerge. Even in the face of recessionary conditions expected across leading economies into 2023, the Bain and Altagamma analysis forecasts further expansion in sales and market value for luxury goods through the coming year and decade. Unfortunately, it doesnt show signs of improving sooner than in 2024 back to its 2019 levels. This article is a preview of the Top 10 companies listed in the upcoming Global Powers of Luxury Goods 2022, The top 5 companies are the powerhouses of luxury brand sales, About the Global Powers of Luxury Goods report, Global Powers of Luxury Goods | Deloitte | global economy, Luxury Consumer, Infrastructure, Transport & Regional Government, Telecommunications, Media & Entertainment, update your settings to accept analytics and performance cookies. The companies making up the Top 5 have been relatively stable, with only LOral Luxe entering the Top 5, replacing Richemont*, Chart 1: Luxury goods sales US$ million: FY2016 & FY2021. The US and Europe still command the lions share of the market, but Asia (especially China) accelerated as consumer acceptance increased. This reflects a more precocious attitude toward luxury, with Gen Z consumers starting to buy luxury items some three to five years earlier than millennials did (at 15 vs. at 1820); Gen Alpha is expected to behave in a similar way. The spending of US tourists in Europe doubled between 2019 and 2022; about two-thirds of that gain reflected an increase in transactions while the other third came from an increase in average transaction size, according to Global Blue data. ")},function(n){console.log(n),e("#nl2go_form").html("Unexpected error")})})})}(jQuery); 2023 E-commerce Germany and E-commerce Berlin. 2022 Diversity, Equity, and Inclusion Report. The luxury market's consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. Online sales rose 20% from 2021 to 2022 to reach an estimated 75 billion. The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. The pandemic literally closed the doors in physical retail and theyve only partly opened in 2021. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. 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. Here it comes: the second stage of our E-commerce Germany Awards 2022! 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 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. With digital advertising expenses growing and more power brands moving into the space Magna reports global digital media grew by nearly one-third year-over- year in 2021 smaller brands cant begin to match the online marketing muscle of the major brands. Prospects for personal luxury goods market out to 2030 are also highly positive, todays analysis concludes. Lighting and living/bedroom categories benefited the most, as consumers looked for more comfort, functionality, and beauty. 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. Consumption was very strong in Europe. The access to the reports is reserved to Altagamma Companies. It maintains some elements of streetwear (such as gender fluidity, a disregard for occasion, inclusiveness, and sports-driven inspiration), but goes beyond its style codes through new and enhanced techniques, materials, and functions. The online personal luxury goods alone almost doubled in 2 years. We therefore forecast that the market value of personal luxury goods will rise to between 540 billion and 580 billion by the end of the present decade, from an estimated 353 billion in 2022an increase of more than 50%. Chinas luxury market is expected to recover by the second half of 2023. In spite of 110% year-over-year growth at current exchange rates, sales were still down 7% from their 2019 level. 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. 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. 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. Gen Y and Gen Z accounted for the entire growth of the market in 2022, it notes. The impact of a possible global recession on the industry in 2023 could differ from the impact of the 200809 global financial crisis. Together, we achieve extraordinary outcomes. Required fields are marked *. 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. Now, brands are multi-price points to answer to different customer needs. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. 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. 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. Bookmark content that interests you and it will be saved here for you to read or share later. 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. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. 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. 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%. 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). People under 40 years old will remain main drivers for growth up to 2020 in the luxury goods market. 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. 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. But that too will favor power brands that have long practiced concessions, leaving emerging brands out in the cold. Opinions expressed by Forbes Contributors are their own. Hong Kong and Macau were weaker spots, while Taiwan slowly recovered. The steepest growth rate between 2019 and 2022 belonged to personal luxury goods, followed by experience-based goods, such as fine art and luxury cars. What will it bring? A powerful factor for sector growth in the rest of the decade will be generational trends,the analysis reports. 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. 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. This article is a preview of the Top 5 companies which will be listed in the upcoming Global Powers of Luxury Goods 2022. 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. The growth was fueled by the greater emphasis consumers have been placing on their home lifeas both shelter and source of self-definitionsince the pandemic. 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. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. By Claudia D'Arpizio, Federica Levato, Filippo Prete, and Jolle de Montgolfier. 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. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. 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. Retail continues to dominate, while online channels are seeing a normalization in their growth. Southeast Asia and South Korea have been excelling in both growth and future potential. The latest Bain-Altagamma Luxury Goods Worldwide Market Study forecasts increased resilience to recession after robust 2022 growth. Weak Hong Kong vs mixed Taiwan and Macau. INTERNATIONAL. Both LVMH and Kering have seen their luxury goods sales more than double. We complement our tailored, integrated expertise with a vibrant ecosystem of digital innovators to deliver better, faster, and more enduring outcomes. Physical stores are distribution centers for online. 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. Major technology growth companies shed 140,000 employees in 2022, followed by a second wave of layoffs in the first weeks of 2023. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. MA But because of its vast cultural and geo-political differences, China can be a risky bet for Western 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. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. 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. Source: Deloitte Touche Tohmatsu Limited. The Middle East is very strong throughout markets, with Dubai and Saudi Arabia leading growth. Many of them reported sales above their pre-pandemic levels, driven partly by increasing e-commerce sales and the re-opening of physical stores. Interestingly enough, the pandemic caused this market to experience its worst dip in history. Heels and formal shoes are now back to their 2019 levels.

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