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Global luxury goods industry to reach 1.4 trillion euros in 2022

Dec 26, 2022 World
Global luxury goods industry to reach 1.4 trillion euros in 2022
The latest edition of the Bain & Company–Altagamma Luxury Study shows that the global luxury goods industry grew by 21% from 2021 and suggests that it will further grow in 2023
The 21st edition of the Bain & Company report with Altagamma, the Italian luxury goods manufacturers' industry association, concluded that "the global luxury goods market took a further leap forward during 2022, despite highly uncertain economic and consumer market conditions". Moreover, "it remains poised to see further expansion next year, and for the rest of the decade to 2030, even in the face of present economic turbulence".

The study estimates that the global luxury goods industry will reach a market value of some 1.4 trillion euros in sales this year, growing by 21% from last year, driven by the growth acceleration of the personal luxury goods industry, "coming on the heels of the V-shaped rebound enjoyed in 2021". The report is also projecting a personal luxury sales increase of 22% at current exchange rates (or 15% at constant exchange rates) to 353 billion euros in 2022, as compared to the prior year.  

Additionally, while the US and European luxury markets remain at the lead of the industry, new markets are emerging, namely, Southeast Asia and Korea are standing out in terms of growth and potential. China, which remains a crucial market to the luxury market, is still facing a challenging period due to COVID-19-related measures, causing it to perform below 2021 figures. The study notes, however, that the Chinese luxury market is expected to recover between the first and second half of 2023.

Other key trends identified in the report regard the normalization of the online channel and the increasingly "blurring of the boundaries between 'mono-brand' and ecommerce", pushing brands to take on an omnichannel 3.0 approach; the expansion of the customer base, despite the progressive price increase across the industry; the use and improvement of techniques, materials and functionalities, as well as a converging between luxury and art.

2023 Outlook

According to the analysis, "even with a possible global recession next year, the impact on the industry could be different from that of the 2008-2009 global financial crisis". Thus, the analysts have outlined two scenarios: the growth in the personal luxury foods market can happen between 3% to 5% or 6% to 8% (at constant exchange rates), depending on the strength of the Chinese economic recovery and the ability of the US and Europe to withstand the likely blow generated by the macroeconomic headwinds.

Image Credits: Laura Chouette on Unsplash