bain and company luxury report 2022

New types of activities, often powered by technology, should also spark an additional 60 billion to 120 billion in sales by 2030, from sources such as the metaverse and brand-related media content. What other changes can we expect looking at consumers age? 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. 2023. Luxury goods leader LVMH increased its share of the Top 5 from 39.1% in FY2016 to 44.9% in FY2021. Brands invested heavily (and successfully) to fuel demand. There will be some changes in the growth in luxury spending by nationality. Sustainability remains a focus for both consumers and shipyards, from greener propulsion systems to design-for-disassembly solutions that make yacht materials more recyclable. Their performance across geographies and product sectors is based on publicly available data for FY2021 (which we define as financial years ending within the 12 months from 1 January to 31 December 2021). 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. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. The customer wants a seamless experience to shop anywhere, anytime. 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 today's report. Moreover, Gen Y and Gen Z are expected to contribute roughly 180% of the total growth from 2019 to 2025. 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. London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. Bookmark content that interests you and it will be saved here for you to read or share later. A deliberate (and effective) elevation strategy has driven a progressive price increase across the industry (driving around 60% of the 2019-2022 growth) without damaging volume growth. Fondazione Altagamma is led by Matteo Lunelli, who was named chairman in 2020. Further, some 40% of the online segment is now controlled by websites devoted to a single brand, rather than multi-brand marketplaces. The coming years will see a further blurring of the boundaries between monobrand outlets and e-commerce, which will increasingly push brands to take an omnichannel 3.0 approach, enabled and enhanced by new technologies. 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. The luxury market's consumer base is broadening with some 400 million consumers in 2022 expected to expand to 500M by 2030. All segments gained momentum, but only luxury hospitality and cruises havent yet closed the gap with pre-Covid levels. I study the world's most powerful consumers -- The American Affluent, December 27, 2021 in London, England. Examples include: acceleration of middle class and consumption upgrade, pressure on uber-wealth, delayed spending given current uncertainty. In the past year retailers faced some strong economic headwinds against the backdrop of an unpredictable virus and its resurging variants. Online and monobrand, key channels for 2021 recovery, will lead the mid term growth of the industry. All categories have now recovered to 2019 levels or better, with hard luxury, leather goods, and apparel leading the resurgence following the pandemic. 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. 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. More specifically, they make up for almost 50% of the whole market. The top wealth segments stand out more now than ever before a . 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. We work with ambitious leaders who want to define the future, not hide from it. Some tourists bounce back over the summer. Please enable JavaScript to view the site. Bain & Company is a global consultancy that helps the worlds most ambitious change makers define the future. Although there will never be another China in terms of outsize growth contribution to the industry, India and emerging Southeast Asian and African countries have significant potential, if the luxury industrys infrastructure (such as malls) and regulation can evolve quickly enough in those markets. Described as the core of the core in the luxury market, personal luxury came roaring back after experiencing a V-shaped recovery. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. What Sadove sees shifting in distribution is a move toward more concession models in retail from traditional wholesale-to-retail distribution. Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. Despite recessionary conditions expected across leading economies in 2023, personal luxury goods should see further expansion. And finally, Bains positive growth projections hinge on Chinese consumers and their continued appetite for luxury brands. , describes them. Find info on Construction companies in Cottenchy, including financial statements, sales and marketing contacts, top competitors, and firmographic insights. Luxury yacht orders rose to a record level, amid solid growth in deliveries. 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. Recognizable brand signifiers (whether a shape, a piece of metalware, a material, or a monogram) remained popular. 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. 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. Carina Lau, Pansy Ho, Michelle . Seventy-three of the Top 100 companies reported growth in luxury goods sales in FY2021, compared to only 20 companies in FY2020. Fashion ranking: Top 20 clothing retailers in Germany. Analysis of financial performance and operations for financial years ended through 31 December 2021 using company annual reports, industry estimates and other sources. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Chinas luxury market is expected to recover between H1 and H2 2023. The retail channel has now reached parity with the wholesale channel. 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. Not all sectors can enjoy stable recovery, however. The customer is going to shop and going to shop in different ways, Sadove affirms. Sales are set to hit a new record in 2022, with the market forecast to grow by 22% at current exchange rates to 353 billion. Lighting and living/bedroom categories benefited the most, as consumers looked for more comfort, functionality, and beauty. In contrast, Mainland China lost a little ground, dropping 1% from 2021. Over-performance of all categories, restocking wardrobe in the rising post-streetwear era. Watches have evolved from a challenged category to the new object of desire. Bain & Company analyzes for Fondazione Altagamma the market and financial performance of more than 280 leading luxury goods companies and brands. 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 threats revolve mostly around understanding the winning value proposition, cracking operation complexity and defining logo and rebranding strategies. Art-based NFTs still represent a limitedalbeit expandingportion of the overall market; artists are looking for ways to meaningfully integrate NFTs into fine arts. 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. from 8 AM - 9 PM ET. 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. Sales of fine wines and spirits hit 96 billion, up 16% on 2021. This is, 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), and Gen Alpha expected to behave in a similar way. Local Japanese consumption was solid, and the market also benefited from the return of tourists after the country reopened to visitors. In 2021, profits are already back at 2019 levels. 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. Before Covid, emerging luxury brands had hope to find traction online where the power brands were reluctant to venture, but thats all changed. 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, todays report concludes. 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. Southeast Asia and South Korea have been excelling in both growth and future potential. As in last years report, there will be a section on the impact of COVID-19 on financial results. Luxury Goods: trends and predictions for 2022 (Bain Report). Now, brands are multi-price points to answer to different customer needs. None of this has stopped brands from investing in modernizing their operations, especially through more robust information technology infrastructure to support the ongoing digitalization of the industry, and through a reconfiguration of their store networks (primarily through renovation and relocation projects). MILANNovember 15, 2022The global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions. LONDON, ENGLAND - DECEMBER 27: A woman holds a Louis Vuitton shopping bag on Clifford Street on [+] December 27, 2021 in London, England. Find company research, competitor information, contact details & financial data for FINANCIERE JIMENEZ of COTTENCHY, HAUTS DE FRANCE. But what's the current scenario? We observed a rebound when and where Covid restrictions were lifted, yet not enough to offset the performance of the second quarter. The fine art market grew 13% to 39 billion, as the ranks of potential buyers swelled and new Asian art hubs strengthened. And yet, underneath the topline results are other findings that should give one pause, specifically how the balance of power in the luxury market is now firmly in the hands of the power brands, as Steve Sadove, former CEO of Saks and currently advisor to Mastercard 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. Broader meanings and business models will emerge. Local consumptions impacted by the slow vaccine adoption. The overall luxury industry tracked by Bain & Company encompasses both luxury goods and experiences. Sales of secondhand watches, estimated at an additional 2530 billion, rapidly grew in 2022, fueled by the appetite of Generation Z and millennials for investment and resale opportunities, given the high resilience of the category during crises. Online should become the leading channel for luxury purchases with an estimated 32%34% market share, followed by monobrand stores (30%32% market share). Best performing categories of 2020 are already beyond 2019 in 2021, watches and beauty on par, apparel is still lagging. The luxury hospitality market surged to an estimated 191 billion, more than doubling in value in 2022. The Top 5 companies saw their luxury goods sales rebound in FY2021, as operations recovered from the adverse impact of the COVID-19 pandemic on consumer demand, retail, and supply chains. Prospects for personal luxury goods market out to 2030 are also highly positive, today's analysis concludes. Yet, they still require an infrastructure catch-up to facilitate the expansion locally. Bain Warns China Luxury Growth to Further Decelerate in 2022 As China began to crack down on various sectors under the name of common prosperity, growth throughout the second half of 2021. (Photo by Hollie Adams/Getty Images). In keeping with greater social interest in diversity, equity, and inclusion, galleries and collectors focused more on areas such as women artists and African art. The US and Europe still command the lions share of the market, but Asia (especially China) accelerated as consumer acceptance increased. There will be a new value creation model (high tech & high touch), new KPIs to track (earned growth rate) and clear positive results (churn rate reduction) a lot to look forward to. Within accessories, leather goods grew by 23%25%, far surpassing its pre-Covid levels (up 39%41% compared with 2019). One can argue that the secondhand luxury goods buyer isnt the same as the primary market buyer. 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. Chinas luxury market is expected to recover by the second half of 2023. Based on a preliminary assessment covering both sales in the luxury goods and experiences market in nine major categories, it reports total revenues will increase between 13% to 15% over the 2020. 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. This market growth is driven by factors that go beyond aspiration, with consumers becoming more knowledgeable and choosy, and intensified competition for loyalty and advocacy. 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. Bain has published its annual findings in the Luxury Goods Worldwide Market Study since 2000. Only luxury cruises are down relative to both 2019 and 2020. However, the profit erosion also reflects higher energy prices and increased labor costs. Taken together, the study characterizes these trends as the nouvelle vague or new wave of developments for the sector. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. Uber-luxury jewelry outperformed globally, as did iconic pieces and lines. 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. More troubling is they are expected to continue on a downward curve through 2025 when they will hold only between a 10% to 12% share each. 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. Luxury cars, luxury hospitality, and personal luxury goods together account for 80% of the total market. The experiences sector, including travel and any in-person brand experiences, is still way below its pre-covid levels, mostly because of travel restrictions. Already it is about half the size of each of the three leading personal luxury goods categories leather accessories, beauty and apparel and its 27% growth from 2019 leaves every other personal luxury goods category in the dust. When typing in this field, a list of search results will appear and be automatically updated as you type. But the Global State of the Consumer Tracker makes it easy for you to access consistent, high-quality data on consumer sentiment and behavior in retail, consumer products, automotive, and travel. There are sectors that were affected by the pandemic much more, and one of them is experiences. 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). Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. 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. Small leather goods gained further traction. 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. After softening in Aug-Sept, consumption restarted strong in October despite scattered lockdowns. Report. Japan grew by 18% at current exchange rates to 24 billion, finally catching up to its pre-Covid level. Sadove suggests these numbers may not be as stark as they first appear. Together, we achieve extraordinary outcomes. The latest Bain-Altagamma Luxury Goods Worldwide Market Study forecasts increased resilience to recession after robust 2022 growth. In 2022, the luxury market generated positive growth for 95% of brands. Italy and France were the 2022 growth champions, followed by Turkey, the UK, and Spain, while Germany softened. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. The study reveals that some of the consumption fundamentals of China will go through changes. The global ranking of luxury sales by region changed in 2022, as the Americas regained the top position for personal luxury goods sales. However, the report also states the total market remains 9% to 11% below 2019 levels, owing largely to a shortfall in experiences. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. Opinions expressed by Forbes Contributors are their own. Demand for personalization and digital connectivity rose. MA We expect that solid market fundamentals will result in annual growth rates between 5% and 7% until 2030. 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. Asia (excluding Japan) switched to second position, followed by Europe. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. 2020-21 is the turning point for establishing the keyword for the next 20 years of luxury. Retailers have seen a decrease in footfall amid a recent surge in COVID-19 cases across the UK due to the Omicron variant. Weak Hong Kong vs mixed Taiwan and Macau. The luxury markets consumer base will expand from some 400 million people in 2022 to 500 million by 2030. 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. Countries coped with high inflationary . The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. With 2022 already knocking on our doors, it's time to step into another year full of new and interesting trends, figures and actions for the Luxury Goods market.

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bain and company luxury report 2022