The global luxury market is on track to hit a record-breaking €1.5 trillion in 2023, marking an 8-10% growth from 2022, according to a recent report by Bain & Company in collaboration with Altagamma, the Italian luxury goods manufacturers’ association. The study highlights the resilience of the luxury sector, attributing the growth to a resurgence in social interactions and travel, driving spending on luxury experiences to historic highs.
The report delves into regional perspectives, revealing a rebound in European tourism, a deceleration in American spending, and a flourishing Asian luxury ecosystem fuelled by Chinese consumers.
Amid these dynamics, the study places a spotlight on the growth of the jewellery category, which is poised to reach €30 billion in market value in 2023. Fuelled by an investment mindset, fine jewellery emerges as a bright spot for investments amidst market uncertainty. The overall positive growth trend extends to other luxury categories, including ready-to-wear, beauty, watches, and leather goods. The monobrand channel leads the distribution ecosystem, capitalizing on consumers’ quest for physical experiences and the increasing role of clienteling in sales.
As brands navigate the multigenerational complexity, catering to diverse consumer needs becomes crucial. The report highlights the income growth potential in Generation X and Y, who represent the bulk of luxury purchases, while also noting the influence of Generation Z, expected to account for 25-30% of luxury market purchases by 2030.
Looking ahead to 2030, the report anticipates continued market growth, with Chinese customers expected to represent 35-40% of the personal luxury goods market. Online and monobrand channels are projected to dominate two-thirds of the entire market by 2030, emphasising the importance for brands to focus on differentiation and meaningful experiences across the entire customer journey.
In this evolving landscape, sustainability and technology adoption will play pivotal roles in the luxury market’s future, driving a new season of mergers and acquisitions. Brands must maintain a purposeful approach, prioritizing creativity and innovation to stay relevant in an increasingly crowded market and ensuring adaptability as a guiding principle to overcome short-term challenges.
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