By Nilaris Roberts
(Louis Vuitton Women's Spring-Summer 2023)
Fashion
The global luxury goods market is returning to its normal growth trajectory, marking the end of the post-pandemic rebound. Despite this deceleration, the industry is still robust, with a projected market value of €1.5 trillion in 2023, as indicated in a recent report by US management consulting firm Bain & Company.
Anticipating an 8 to 10% growth in global market revenues, the luxury goods sector is expected to sustain an average annual growth of 5 to 7% in the coming years. The 'personal luxury goods' market, encompassing fashion, leather goods, jewelry, watches, and beauty products, is projected to achieve €362 billion in sales for 2023.
"We're on a decelerated growth rate of 4%,"
Joëlle de Montgolfier, head of Bain & Company’s luxury division, told AFP. However, she did also emphasize that the industry remains dynamic, surpassing 2019 levels despite the slowdown from previous years.
Notably, luxury consumers are now seeking experiences and special moments over mere product ownership, aligning with pre-pandemic trends. The report highlights a resurgence in luxury hotels (14% growth), high-end restaurants (10% growth), and an impressive 113% growth in luxury cruises. Although 2023 exhibited growth in all regions, the US luxury market saw an 8% decline due to macroeconomic uncertainty, impacting Europe's competitiveness.
(Prada SS 2023 Womenswear)
The Chinese market reported a mixed performance with a 9% growth, slightly below expectations. De Montgolfier expressed uncertainty for 2024, acknowledging geopolitical factors, including macroeconomic situations in China and the US, as potential influences on the projected 5 to 7% annual growth until 2030. Pessimistic forecasts hint at a 1 to 4% sales increase in 2024 for the personal luxury goods market.
The luxury goods market may be finally returning back to normal but there is still much uncertainty. While Bain & Company anticipates a 5 to 7% annual growth in the market until 2030, there is lingering uncertainty. Bleaker forecasts suggest a modest 1 to 4% uptick in sales for 2024, with concerns about the personal luxury goods market potentially facing challenges stemming from the global geopolitical landscape, including macroeconomic conditions in China and the US.
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