In 2022, we estimate that 95% of brands experienced positive growth, but most luxury players continued to invest for the future, which resulted in a slight erosion of average profitability following an unprecedented increase in 2021. Over-performance of all categories, restocking wardrobe in the rising "post-streetwear" era. Driven by the dichotomic impact of pandemic outbreak in 2020, the luxury food market is showing significant difference in growth rates within its components. There are sectors that were affected by the pandemic much more, and one of them is experiences. Bain Warns China Luxury Growth to Further Decelerate in 2022 As China began to crack down on various sectors under the name of common prosperity, growth throughout the second half of 2021. But despite present and continuing economic challenges, the luxury market continued to perform strongly throughout this year to date, with winners for brands across the board, and positive growth for some 95% of brands, today's report concludes. The US and Europe still command the lions share of the market, but Asia (especially China) accelerated as consumer acceptance increased. When typing in this field, a list of search results will appear and be automatically updated as you type. As a result, Bain-Altagamma analysis sets out two scenarios, with sales growth in the personal luxury goods market set to be between 3 to 5% or 6 to 8% (at constant exchange rates), depending on the strength of economic recovery in China and the ability of the US and Europe to withstand economic headwinds. What other changes can we expect looking at consumers age? Luxury goods sales growth for the year ended March 2022 for Richemont was 50.1%. In 2022, the luxury market generated positive growth for 95% of brands. Profit levels that had quickly recovered post-Covid to an average 21% in 2021 have slightly eroded in 2022, down to 19%21%. MA Womenswear and menswear grew at about the same pace. Despite worsening macroeconomic indicators globally and specific challenges in China, the sector performed strongly across quarters, and it is likely to have reached 353 billion in retail sales value in 2022, marking an advance of 22% at current exchange rates (or 15% at constant exchange rates) vs. 2021. Cultural relevance and evolving values ask for a new value-creation model in customer engagement. Many of them reported sales above their pre-pandemic levels, driven partly by increasing e-commerce sales and the re-opening of physical stores. Bain Warns China Luxury Growth to Further Decelerate in 2022 As they seek new ways to connect with their customers, they are changing their approach and mindset by incorporating sustainability and digitalization into their long-term strategies, to align with consumers demands and new regulatory requirements. Chinas luxury market is expected to recover by the second half of 2023. That ratio has come down from 3.4 times in 2018. The major brands moved aggressively into the online space over the past two years, which grew from 12% share of the personal luxury market in 2019 to 22% in 2021, a stunning 38% uptick since 2019. Commenting on the critical trends and themes for the luxury industry up to 2030, Federica Levato, partner at Bain & Company and leader of the firms EMEA Luxury Goods and Fashion practice, co-author of todays report, said: In their path to 2030, luxury brands will need to leverage their cultural avant-garde position and insurgent excellence to overcome the challenges ahead and shape the world. In general, luxury brands have the chance to secure common prosperity, but they will need to challenge and adapt their strategy. All rights reserved. Fashion ranking: Top 20 clothing retailers in Germany. Within accessories, leather goods grew by 23%25%, far surpassing its pre-Covid levels (up 39%41% compared with 2019). London and the UK suffer the most, while Russia is championing thanks to a strong repatriation. Across 63 offices in 38 countries, we work alongside our clients as one team with a. China's luxury market is expected to recover between H1 and H2 2023. Even in the face of recessionary conditions expected across leading economies into 2023, the Bain and Altagamma analysis forecasts further expansion in sales and market value for luxury goods through the coming year and decade. As in last years report, there will be a section on the impact of COVID-19 on financial results. This generational factor is one of the critical trends affecting the development of the luxury market in 2022, and for the rest of the decade, that are highlighted by todays report. The other five key trends identified in the report are: Old continents are still leading, but new markets are surprising. The steepest growth rate between 2019 and 2022 belonged to personal luxury goods, followed by experience-based goods, such as fine art and luxury cars. China to be world's No 1 luxury market by 2025, Bain & Co forecasts The second-hand luxury market, valued at $38 billion, is now also worth luxury's attention, as it is growing more than twice as fast as first-hand luxury. The most likely outcome in the fourth quarter of 2022 is a 19% year-over-year rise in sales, which would be a slight slowdown from 23% growth in the third quarter. For any questions or to arrange an interview, please contact: Gary Duncan (London) Email: [emailprotected], Orsola Randi (Milan) Email: [emailprotected]Tel: +39 339 327 3672. Subscribe to Bain Insights, our monthly look at the critical issues facing global businesses. The start-up world also became a less secure option for innovation talent during this period, with investment size falling and the number of start-up investments dropping 59%, from 14,400 in the last quarter of 2021 . Bains insights are based on triangulating information and sources available as of November 10, 2022, including: The scenarios do not consider disruptive changes to the Covid-19 status quo (e.g., potential future waves of Covid-19 related to variations of the virus) nor to the global sociopolitical situation. Chinese customers will be back by 2022-23, Japan by 2023 and Europe in 2024. As 2022 draws to a nervy close, the market is headed for a 22% year-over-year increase. Luxury Sales Set to Grow by 5 to 15% This Year, Bain Says Since our founding in 1973, we have measured our success by the success of our clients, and we proudly maintain the highest level of client advocacy in the industry. Bain & Company recently released its 20 th annual Luxury Study, which underlines the resurgence in the global luxury market in 2021 after a contraction in 2020. Air Travel Forecast to 2030: The Recovery and the - Bain & Company