Bain & Company, China and the US to drive the luxury sector's recovery

November 12, 2021

Abstract : In 2020, the market grew by 29%. China, with 60 billion euros, represents 21% of the overall luxury market, but the performance was good also in the Middle East, with Dubai and Saudi Arabia driving the growth.

MILAN, Nov. 11 (Class Editori) -- China-US duo is driving the performance of the luxury industry. The personal luxury goods sector experienced a V-shaped recovery in 2021. After the sharp contraction in 2020, the personal luxury goods market grew by 29% at current exchange rates to hit 283 billion euros, thus increasing by 1% compared to 2019 levels.

Bain & Company estimates that the personal luxury goods market could reach 360-380 billion euros by 2025 with a sustained growth of 6-8% y-o-y.

The overall luxury market, which includes both wider luxury goods and experiences, is still below 2019 levels, reaching approximately 1.1 trillion euros, with a shift from experiences to goods and experience-based goods compensating for just half of the gap compared to 2019.

This industry keeps changing, as proved by the 20th edition of the Bain & Company Luxury Study, released today in Milan in collaboration with Fondazione Altagamma, that gathers high-end Italian cultural and creative companies.

After navigating a tough year, the luxury industry grew again in the second and third quarters of 2020 when compared to 2019. Bain expects that the most likely outcome for the fourth quarter will be 1% growth versus 2019, which would allow the year to end on a positive note.

Bain explained that driving this growth is remarkable momentum in China, where the market size has doubled since 2019, as well as solid growth in the US, where a new map of luxury is fast emerging with increased importance of new urban hubs and suburban areas. China now represents 60 billion euros or 21% of the global market, while the Middle East was another bright spot with Dubai and Saudi Arabia leading the growth.

Europe, Japan and rest of Asia only partially recovered during 2021 and have still not reached pre-COVID levels, since their comeback is linked to the resumption of global travel. Japan is expected to be back to pre-crisis levels by 2023 and Europe by 2024.

(Source:Class Editori)

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