“Luxury” brands continue strong growth in spite of economic uncertainty
Persistent inflation is driven by a mix of low supply and high demand. During the pandemic, people’s savings grew, most notably for higher income groups. Many are now fulfilling their “pent up demand” that includes Luxury products.
💎 Bain & Co’s Luxury study (Nov’22) projects strong global luxury market growth through 2030:
Despite economic challenges, 95% of luxury brands saw positive growth in 2022.
Total global luxury market projected to grow by 21% in 2022 vs 2021, to €1.4 trillion.
The personal luxury goods market to grow +22% in 2022, reaching €353 billion
+3 to +8% expected in 2023
reach €540-580 billion by 2030, a +60% increase from 2022.
💹 Drivers of this growth include:
Luxury brands investing in future growth despite rising costs and inflation.
Gen Z and Gen Alpha expected to spend 3X more on luxury goods vs other generations,
“…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)”
US and Europe are current lead markets, but China, India, and the Middle East expected to drive growth in coming years.
🛠 What Brands should consider in their strategies:
Luxury market expected to withstand recession better in 2023 than it did during the global financial crisis in 2009
Digital and e-commerce driving market growth, with online sales ~40% of the market by 2025
Sustainability trend on the rise in luxury, with more consumers seeking eco-friendly and socially responsible products
Personal luxury goods like handbags, watches, and jewelry predicted to see the most growth along with “restocking wardrobe in the rising ‘post-streetwear’ era”
“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”,
Claudia D’Arpizio, leader of Bain’s Global Luxury Goods and Fashion practice.
Bain report: https://www.bain.com/about/media-center/press-releases/2022/global-luxury-goods-market-takes-2022-leap-forward-and-remains-poised--for-further-growth-despite-economic-turbulence/