According to the 2023 spring luxury study conducted by Bain & Company and Altagamma, the global luxury goods market is expected to experience growth ranging from 5% to 12% in 2023, following a “record” performance in 2022. Despite the prevailing uncertain economic conditions, the market is projected to reach a value of €530-570 billion (around $625-$671 billion) by 2030, more than double its size in 2020.
While luxury shopping in the United States is showing signs of slowing down due to economic uncertainties, Europe is witnessing a rise in luxury spending, attributed to increased tourism. However, this trend may change in the latter half of 2023. The study highlights watches and jewelry as the top-performing categories, with consumers seeking quality over quantity in their purchases (“less but better”).
The industry faces key challenges in the medium term, including ESG regulatory pressures and the influence of generative AI and new technologies throughout the value chain.
The Bain & Company study, presented in collaboration with Altagamma, revealed that the personal luxury goods market achieved a record year in 2022, reaching a market value of €345 billion (around $377 billion). The positive momentum continued into the first quarter of 2023, with a growth rate of 9-11% compared to 2022. However, variations in growth were observed across different countries. The study emphasizes factors such as decreasing hyperinflation, recovering consumer confidence in Europe, the reopening of the Chinese market, and positive momentum in Japan and Southeast Asia as contributors to growth in Q1 2023.
The study highlights the ongoing trend of customers seeking elevated and iconic luxury pieces, leading to growth in categories such as watches, jewelry, and iconic bags. Experiential and travel retail channels are regaining popularity, and the monobrand and direct retail segments are also experiencing solid growth.
Looking ahead, the luxury market is expected to reach a value of €360-380 billion (around $393 billion-$415 billion) in 2023, representing growth from the previous year. Two scenarios are presented, with a positive scenario projecting sales growth between 9% and 12%, and a more realistic scenario projecting growth between 5% and 8%. The study also predicts significant growth in the personal luxury goods market by 2030, with a value estimated between €530 and €570 billion.
Claudia D’Arpizio, a partner at Bain & Company and leader of the firm’s Global Luxury Goods and Fashion practice, highlighted the importance for brands to focus on consumers, balance their geographical exposure, offer high-value propositions, and emphasize iconic and timeless pieces to succeed in the evolving luxury market.
Access the full report here.
