As per a new report by the Boston Consulting Group and Altagamma Foundation, the global luxury market is gradually recovering and should return to pre-pandemic levels by next year

Titled, The True-Luxury Global Consumer Insight, the report says, the future looks bright for the sector even though only the upper end of the luxury consumer pyramid saw an increase in consumption during the pandemic.

BCG surveyed 12,000 luxury consumers and found that much of the spending growth is being driven by younger consumers in the Millennial and Gen Z age groups with these consumers set to account for 60 per cent of the luxury segment’s total by 2025.

BCG said consumers are increasingly embracing the possibility of renting luxury items, with as many as 18 per cent of consumers on average testing this possibility over the last year. More and more consumers are selling their pre-owned luxury items too, especially among the young, and 44 per cent of Gen Z and 37 per cent of Millennials have done this in the past year

As per the report, apart from Chinese consumers spending more of their money in their own country, their tastes seem to be diverging from those of Western consumers There’s an increasing trend towards luxury virtualization. BCG said gaming is one key area and among the 39 per cent of consumers who are aware of virtual online games that involve a luxury brand, 55 per cent of them said they’ve bought in-game items. Importantly too, 86 per cent of those people said they’ve then purchased the corresponding physical version.