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The global luxury market recovers but in Europe it is still below 2019

The personal luxury goods industry has experienced a V-shaped recovery globally this year, after a sharp contraction in 2020 due to the pandemic, but the same is not happening in Europe, which is still 20% below levels precovid, due to loss of asian tourism.

The global personal luxury goods market grew by 29% at current exchange rates to €283 billion, up 1% in size from 2019, and is expected to reach between €360-380 billion in 2025, with a sustained rise of between 6% and 8% per year, according to a study by the consulting firm Bain & Company.

The report finds that China's "booming" market, which has doubled in size since 2019, increased local spending in the United States, and a strong online channel have allowed the industry to return to 2019 levels "faster than ever." the expected".

However, the overall luxury market, encompassing both items and experiences, is still below 2019 levels, reaching €1.1 trillion.

America is now the world's largest luxury market, with €89 billion, 31% of the total, followed by China, with €60 billion, 21%, while the Middle East is another region to highlight, with Dubai and Saudi Arabia leading growth, compared to only a partial recovery in Europe, Japan and the rest of Asia.

El mercado de lujo global se recupera pero en Europa sigue por debajo de 2019

SLOWEST RECOVERY IN EUROPE

Although the sector has improved this year in Europe, it has not yet reached pre-Covid levels, fundamentally because international tourism, especially Asian tourism, which came to the continent, has not recovered, Bain & Company partner Cira Cuberes explained to Efe .

Although local consumption has increased in Europe by 15% compared to 2019, "obviously it does not compensate for the levels that existed before the pandemic, so the recovery process is going to be slower," she added.

The gradual recovery of international travel is expected to reach levels similar to those of 2019 in 2025-2026, but probably without equaling them because local consumption in China has become more relevant during the pandemic and it is a trend that has come for stay.

The Chinese now consume much more luxury in their country, while before they always traveled abroad to do so, which generates some uncertainty about the return of the European market to the same volumes it had before covid-19, he explained.

In Spain, as in other European countries, the recovery of the market to pre-Covid levels has not yet been observed, mainly impacted by the reduction in Asian tourism.

THE SECOND-HAND LUXURY MARKET BOOSTS

Another of the conclusions of the study is that the second-hand luxury market has exploded this year to reach 33,000 million euros, after an increase of 65% between 2017 and 2021, compared to a growth of 12% in the first hand during the same period.

In Spain, the second-hand market is also proliferating, with more physical and online stores, which is allowing new consumers to access the sector.

Now there is less hesitation to buy second-hand products such as belts, bags or shoes and, to a lesser extent, other categories, such as jewelry, have added Cuberes.

After a jump of 50% from 2019 to 2020, the online service has grown by 27% this year, to reach a market value of 62,000 million euros, thanks to the accelerated adoption of this channel (which already represents 22% of all luxury goods purchased) by consumers during the pandemic.

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