Young and affluent Chinese Gen Z consumers find local brands much more aspirational and desirable than millennials or Gen Xers, he wrote, as he observes the native Gen Z consumers are exceptionally proud of their Chinese culture heritage and its future potential. Now, even as the pandemic's impact on air travel diminishes, inflation and lower disposable incomes have emerged as constraints on future growth. Global Wealth and Luxury Report 2022 March 2022 The pandemic has had an unprecedented impact on ultra-high net worth, high net worth, and affluent populations; their wealth, as well as their spending habits on luxury goods and services. Sparkling wine (and not just Champagne) gained share over still. Here it comes: the second stage of our E-commerce Germany Awards 2022! The experiences sector, including travel and any in-person brand experiences, is still way below its pre-covid levels, mostly because of travel restrictions. Lighting and living/bedroom categories benefited the most, as consumers looked for more comfort, functionality, and beauty. Retail continued to grow faster than wholesale and reached parity in terms of market share. Only fine wines and spirits (77 or $88 billion) and high-end furniture and housewares (45 or $51 billion) will exceed 2019 levels, up between 12% to 14% and 13% to 15% respectively. The year 2022 saw a global tempering of the peak activity witnessed in 2021, triggered by tightening monetary policies across American and European markets as economies emerged from a Covid-19-induced suppression in economic activity. The growth was fueled by the greater emphasis consumers have been placing on their home lifeas both shelter and source of self-definitionsince the pandemic. Your email address will not be published. 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 More specifically, they make up for almost 50% of the whole market. Four growth engines will profoundly reshape the luxury market by 2030: Chinese consumers should regain their pre-Covid status as the dominant nationality for luxury, growing to represent 38%40% of global purchases. 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. Demand for personalization and digital connectivity rose. A powerful factor for sector growth in the rest of the decade will be generational trends, the analysis reports. Personal Luxury Goods Market Has Recovered Ahead Of Schedule - Forbes 1 Richemonts FY2021 financial year ended in March 2021, so saw a greater negative impact of the COVID-19 pandemic on their FY2021 results compared with other Top 5 companies which had later year end dates. Its not an either-or question but both. 2023 luxury market now set to be more resilient to recession than during the 2009 global financial crisis. 'Gen Y' and 'Gen Z' accounted for the entire growth of the market in 2022, it notes. Although there will never be "another China" in terms of growth' contribution to the industry, India and emerging Southeast Asian and African countries have a significant potential nevertheless. It seems that traditional market segmentation lost its relevance. Bain and Company and the Italian trade association Fondazione Altagamma are out with their 2021 study of the global luxury market. Just as they recently did through excellent products and human-centric engagement, they must now deal with new priorities: ESG, creativity chain, tech & data. Only luxury cruises are down relative to both 2019 and 2020. The higher and top end of the luxury market is also expanding at the same time and accounted for some 40% of market value in 2022 compared with 35% last year, with these consumers hungry for unique products and experiences, and putting brands VIC (Very Important Client) strategies into overdrive. South-east Asia and Korea are winning in terms of growth and potential. 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. The secondhand luxury goods market rose to 43 billion in 2022. The leather goods category has benefited from a generalized price increase (from the most expensive products to entry-level items) that didnt hamper volume growth. Core high quality design market, already showing stronger-than-forecasted performance in last quarters of 2020, continuing on its growth path sustained by continued refocus of consumer spending on home, in particular on Living& Bedroom, outdoor and lighting. Spirits grew faster than wine, with status spirits growing internationally and across categories, tapping into usage occasions once reserved for wines. The luxury market's consumer base is broadening with some 400 million consumers in 2022 forecast to expand to 500 million by 2030. Distribution is a complex discussion.. The performance of the last quarter of this year, in determining the final outcome for 2022, will largely depend on the progressive lifting of Covid-19 pandemic restrictions in China, as well as evolution of European and American luxury consumer confidence in the face of rising inflation and cost of living pressures, and potential recession in the US and European economies, the report notes. Analysis of financial performance and operations for financial years ended through 31 December 2021 using company annual reports, industry estimates and other sources. The steepest growth rate between 2019 and 2022 belonged to personal luxury goods, followed by experience-based goods, such as fine art and luxury cars. 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 todays report. Two-percent share of market is all that small brands (<200 or $277 million) commanded in 2021. Bain & Company recently released its 20 th annual Luxury Study, which underlines the resurgence in the global luxury market in 2021 after a contraction in 2020. Get the latest business insights from Dun & Bradstreet. But with the future of the luxury market now on the shoulders of next-generation customers, expected to represent 70% of global purchases by 2025, and these customers keen on sustainability, a shift from firsthand to secondhand luxury goods can be expected. The performance of the last quarter of this year, in determining the final outcome for 2022, will largely depend on the progressive lifting of Covid-19 pandemic restrictions in China, as well as evolution of European and American luxury consumer confidence in the face of rising inflation and cost of living pressures, and potential recession in the US and European economies, the report notes.
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