Luxury market to outshine pre-Covid 2019 by yearend
Robust recovery in China and the US coupled with the continued strength of online channels will further lift sales of luxury clothing, shoes and jewellery in 2021, surpassing pre-Covid 2019, Bain & Co revealed.
The rebound is happening faster than expected, with the personal luxury goods industry estimated to reach EUR283 billion (around US$324 billion) by yearend, up 1 per cent from 2019.
“After navigating an unpredictable year, the luxury industry returned to growth in the second and third quarters when compared to 2019,” the consultancy said. “Bain expects that the most likely outcome for the fourth quarter will be 1 per cent growth versus 2019, which would allow the year to end on a positive note.”
Local consumption in China and the US alongside ecommerce growth helped revive luxury businesses.
The China market has doubled since 2019, thanks to affluent consumers who purchased luxury items locally in lieu of travelling and shopping overseas. Growth was likewise solid in the US as incomes and savings continue to rise – a scenario that will bode well for the retail sector.
Full recovery in Europe, Japan and rest of Asia rests on the resumption of global travel, with Japan seen to bounce back to pre-crisis levels by 2023 and Europe by 2024.
Younger customers meanwhile are expected to make up 70 per cent of the luxury market by 2025, noted Bain.