The Global Luxury Market Is Expected Grow up to 12 Percent This Year: Report
Despite inflation and signs of global economic instability, a new report says the luxury goods industry is expected to experience a pretty good 2023.
The market for premium products is projected to grow between 5 and 12 percent this year, or somewhere between 360 billion and 380 billion euros ($392 billion and $414 billion USD, respectively), WWD reported, citing the latest worldwide luxury goods market study by Bain & Company and Fondazione Altagamma.
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The strength of the sector was attributed to the decrease of hyperinflation, consumers in Europe regaining confidence, China lifting Covid-19 restrictions ahead of Chinese New Year, and intraregional tourism in Japan and Southeast Asia. New York and California were also said to be returning as luxury hubs, though destinations typically booked for holidays such as Hawaii and Las Vegas are still lagging from their 2019 peaks.
“The luxury industry is experiencing a new phase after its post-pandemic growth, with renewed drivers of resilience establishing winners and losers,” the study’s author, Bain & Company partner Claudia D’Arpizio, says. “Brands who want to succeed need to focus holistically on consumers; balance their exposure across geographies; offer a high value proposition with elevated entry clienteling and experientiality at scale; and push on icons, timeless, and statement pieces.”
The industry experienced promising results in the first quarter of 2023, augmenting 9 and 11 percent compared with 2022, according to the report. Looking into the future, the analysis laid out two different scenarios: a combination of China’s recovery and continued expansion in Europe and the Americas will lead to a growth of 9 to 12 percent over the previous year. Or a more realistic scenario sees a more sluggish recovery that still leads to 5 to 8 percent growth.
These anticipated numbers would come after a successful 2022 in which the industry thrived despite geopolitical disagreements and economic uncertainty. Last year, the industry saw a market value of 345 million euros ($376 billion USD) and may even reach between 530 billion and 570 billion euros ($577 billion and $621 billion USD, respectively) by 2030—which would be about 2.5 times its size in 2020.
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