Luxury goods industry facts, trends and stats play a major role in the global economy. While it’s too early to quantify COVID-19’s total financial toll on the luxury sector, the pandemic has certainly shaken the very foundations of the luxury industry, and some of these changes will be permanent.
Wealth produces global travellers and in pre-pandemic times, wealthy consumers shopped while travelling, it was all part of the luxury experience, that they could afford. For example in 2018, Chinese consumers took more than 150 million trips abroad.
So let’s take a look at the luxury goods market by looking at the key segments, how they may be changing, the actual revenue figures, and some regional characteristics before ending with trends for 2022.
- $316.16 billion: The global luxury goods market size in 2019
- $103.86 billion: Europe’s revenue from luxury goods in 2019
- $257.26 billion in 2020 – $352.84 billion in 2027: the projected growth of the luxury goods market
- 13% to 15% to €1.14 trillion: Rate of growth of luxury goods market in 2021. Still 9% to 11% below 2019 levels
- 29%: Growth forecast for luxury goods industry in 2022
- €283 billion: Forecasted revenue at above percentage at current exchange rates
- $65 billion: Revenue of US market in luxury goods in 2020
- 70%: Millennials and Gen Z’ers representation in the sale of luxury goods by 2025.
Luxury Goods Industry Facts: The Fashion Industry
Fashion weeks and trade shows were the model used by brands to build and maintain vibrant relationships with consumers and trade partners. The new normal may embrace these open events again but in a slightly modified form. But fashion-week organisers and trade associations will have to seek alternative ways to deliver the same kind of magic that these events offer
Industry players might also consider pushing for a more coordinated fashion calendar, with brands simplifying and streamlining their presentation calendars.
Luxury Goods Trends: Experiential Luxury
A luxurious experience has become more sought after by Millennials (those born 1980–95) who tend to choose more for experiences and “Instagrammable moments” rather than luxury items. This luxury goods trend includes high-end hotels, resorts, cruises, and restaurants with killer food. These luxury experiences are highly sought after and are one of the most dynamic and fast-growing components of the luxury sector.
Luxury Goods Facts: Revenues
Let’s take a look at just how big the luxury goods market out there is.
The global luxury goods market size was $316.16 billion in 2019. The market is projected to grow from $257.26 billion in 2020 to $352.84 billion in 2027.
A recent report by Bain & Company states it has never seen a year of surging performance to match 2021 in the luxury goods industry. The report states personal luxury goods sales are likely to be up by almost a third.
The overall luxury industry statistics in the report encompass both luxury goods and experiences. It comprises nine segments led by luxury cars, personal luxury goods, and luxury hospitality, which together account for 80% of the total market.
After contracting in 2020 due to the pandemic, the market grew by 13% to 15% in 2021 to €1.14 trillion. However, this is still 9% to 11% below 2019 levels.
The market for personal luxury goods has increased. These luxury goods sales are set to beat their pre-Covid record, with the market forecast to grow by 29% at current exchange rates to hit €283 billion, likely finishing the year up 1% from its 2019 record.
The big players in the market include:
- LVMH Moët Hennessy-Louis Vuitton SA (Paris, France)
- Compagnie Financière Richemont SA (Geneva, Switzerland)
- Kering SA (Paris, France)
- Chow Tai Fook Jewellery Group Limited (Central, Hong Kong)
- The Estée Lauder Companies Inc. (New York, US)
- Luxottica Group SpA (Milan, Italy)
- The Swatch Group Ltd. (Biel / Bienne, Switzerland)
- L’Oréal Group (Clichy, France)
- Ralph Lauren Corporation (New York, US)
- Shiseido Company, Limited (Tokyo, Japan).
Luxury Goods Statistics: Regional Insights
There will be rising disposable incomes to drive growth in the Asia Pacific. But geographically, Europe earned $103.86 billion in 2019 in terms of revenue. It will lead the market throughout the forthcoming years because of the presence of numerous manufacturers in the region, such as Burberry, LVMH, and L’Oréal.
In 2020, the US was the market leader in personal luxury goods with a revenue of about US $65 billion, followed by China. By 2025, the US is expected to retain its position as the leading country where the personal luxury goods market generates the highest revenue worldwide.
Prompted by the need to adopt more sustainable production and consumption measures in recent years, resale has also emerged as a profitable and viable option for luxury, although ownership and authenticity play a vital role for luxury consumers. In 2021, the secondhand luxury market was estimated to be worth €33 billion worldwide.
Luxury Goods Trends For 2022
2020 was the biggest dip for the luxury goods market with sales picking up in 2021. Worldwide sales reached $1.3 trillion, described as an important increase over a difficult year. But as the luxury industry is more resilient than others, the market came back stronger and quicker than other industries. So what are the luxury goods trends for 2022?
The market is changing and evolving and luxury goods statistics highlight this fact. Brands have always been important but now, buying is more purposeful. Luxury buying has become socially involved, and that should only increase over the years to come. Here’s how it will pan out according to market observers.
Purpose can be created and carried in the content of their own online presence, such as their social media accounts and their websites. And of course, influencers will continue to play a significant role in this aspect.
But market analysts are saying this will change in the future as luxury brands will move into the world of fiction and technology, through fictional characters, robots and avatars, in order to deliver their message.
It is also forecast that online sales will surpass all other channels. Whereas in pre-pandemic years, the experience of visiting and shopping in a top luxury brand’s new store was the thing.
With pandemic-induced lockdowns and restrictions, luxury brands found themselves having to consider and concentrate on their online presence and they had to learn fast. After two years and more of Covid-19, luxury brands’ percentage of their online sales will reach about a third or 30%.
The Rise Of Millennials And Gen Z Customers
Within three years, studies have shown that Millennials and Gen Z will become the biggest buyers of luxury items. As brands engage with this segment of the buying market, brands find themselves taking a more socially engaged stand on issues such as climate change, gender equality and fluidity.
By 2025, Millennials and Gen Z’ers should represent more than 70% of the luxury sales, creating a market growth of over 130%. But not all luxury brands know how to talk the talk that these generations speak.
Luxury brands will either have to turn to specialists who can do this for them or they will need to consider collaborations with other top brands who have mastered the language and worldview of this particular market segment.
Technological innovation and a world driven by data moves at lightning speed and luxury brands will have to keep up. It’s all very well sticking to a time-honoured tradition in places since the 1700s, but there’s a new language out there among socially-engaged market segments.
Think Status (old luxury) and Self-expression (new luxury). Owned property (old luxury), investment asset (new luxury). Brand (old luxury) Back story and cultural credibility (new luxury).
Consumption is Conspicuous (old luxury) versus Consumption is Conscious (new luxury) is here to stay folks.