Luxury, the market rebounds in 2021

The personal luxury goods sector quickly recovered ground, experiencing a V-shaped recovery in 2021. After the sharp contraction recorded in 2020, the market grew 29% at current exchange rates to reach 283 billion. euro, marking a growth of 1% compared to 2019 levels. This is what emerges from the Bain & Company Luxury Study report, presented today in collaboration with the Altagamma Foundation. Bain & Company estimates that the personal luxury goods industry could reach a volume of 360-380 billion euros by 2025, achieving sustained growth of 6-8% per year. The overall luxury market, which broadly includes both products and experiences, observes the study, records even lower performances than in 2019, at around 1,100 billion euros, with a shift from experiences to products and goods linked to experiences which only manages to offset half of the contraction compared to 2019. The performance of the luxury market was supported by the recovery in local consumption, the dual China-United States engine and the strength of digital channels. Younger customers (Gen Y and Gen Z) continue to drive growth and together will represent 70% of the market by 2025. A wave of change continues to characterize this industry, with luxury brands transforming themselves from producers of goods to actors with a higher purpose: today they are central players in the race towards a more sustainable, equitable and inclusive society. “The changes that have affected the luxury industry in the last 20 years have been remarkable, and the crisis due to Covid-19 represented a Renaissance for luxury brands”, comments Claudia D’Arpizio, Senior Partner of Bain & Company and author of the study. “If historically the sector was associated with statuses, logos and exclusivity, luxury brands are now active players in social conversations, driven by a renewed sense of responsibility and purpose”. After facing a complex year, the luxury sector – in the second and third quarters of 2020 – has returned to growth compared to 2019. The most likely forecast for the fourth quarter is that it will register a growth of 1% on the previous year , which would allow 2020 to close positively. Among the drivers of the recovery, Bain points to the remarkable momentum of the Chinese market, whose size has doubled in the last two years, as well as the solid performances recorded in the United States, where a change in distribution is emerging. geographical area of ​​the market, with new urban hubs and a growing concentration on suburban areas. The American continent – at 89 billion euros – is today the largest luxury market, accounting for 31% of the global turnover, while China, at 60 billion euros, accounts for 21%. A positive contribution came from the Middle East, with Dubai and Saudi Arabia leading the growth. Europe, Japan and the rest of Asia have only partially recovered ground during 2021, as the performance of the pre-Covid period is linked to the resumption of global travel. Japan is expected to return to pre-crisis levels by 2023, while in Europe this will happen by 2024.