Global luxury sales in the first quarter of this year are expected to grow by 17-19 per cent, says analyst Bain & Company. The luxury market is expected to grow in the range of 10 to 15 per cent this year, says the report issued jointly with Italian trade group Fondazione Altagamma.
Luxury sales are currently impacted by high inflation rates in the US and Europe, slowing GDP Growth and the war in Ukraine. A slower-than-expected recovery from China’s latest round of COVID-19 lockdowns in key population cities like Shanghai and Beijing could also cause the market to slowdown in the months to come, the report adds.
Last year, the personal luxury goods market grew 7 per cent above 2019′s pre-pandemic levels to total €288 billion ($305 billion). The sector remained resilient due to consumers’ growing desire to return to pre-COVID lifestyles, affirms Federica Levato, Partner, Bain & Company. The pandemic also forced brands to discover untapped opportunities that could benefit growth in the longer term. Companies appealed to a more diverse group of consumers across generations, locations and ethnicities, adds Levato.
By 2025, around 30 per cent more non-white consumers will spend on luxury purchases in the US. However, most of the sector’s growth will come from the Mid-West, the report adds.
This year, sales from Europe and the US will surpass 2019 levels, it avers. South Korea, too, will play an increasingly prominent role in the global luxury market, adds Levato. According to him, the market will not recover before 2022-end.