The global luxury goods market’s growth is back to normal, a new report shows. The post-pandemic rebound seems to be over, but numbers remain high with €1.5 trillion for the industry’s market projected in 2023.
The luxury goods sector is expected to see its global market revenues grow by 8 to 10%, according to a report published on Tuesday by US management consulting firm Bain & Company.
The market is expected to continue on this trajectory with an average growth of 5 to 7% per year until 2030.
The 'personal luxury goods' market, which includes fashion, leather products, jewellery, watches and beauty products, should reach a total of €362 billion in sales for 2023.
"We're on a decelerated growth rate of 4%," Joëlle de Montgolfier, head of Bain & Company’s luxury division, told AFP.
Stabilisation of the post-pandemic rebound
Yet the market is still "head and shoulders above 2019", she added, explaining that the sector remains dynamic despite the growth rates of previous years, which stood above 20%.
Figures show a return to pre-pandemic trends, with luxury customers who are increasingly looking for an experience or special moment, rather than simply owning a product, according to de Montgolfier.
Luxury hotels have experienced a 14% increase, 10% for high-end restaurants, and a staggering 113% growth for luxury cruises.
While all regions reported a growth in 2023, the US' luxury growth market shows an 8% decrease. Macroeconomic uncertainty negatively impacted Europe's main competitor on this market.
De Montgolfier noted a 'mixed performance' for the Chinese market, in spite of a 9% growth. "We expected a more sustained growth," she told AFP.
In the region, Chinese tourists mostly weighed on the luxury goods market growth in Hong Kong, Japan and Macau.
Uncertainty for 2024
Although Bain & Company predicts the market to grow by 5 to 7% per year until 2030, uncertainty remains.
The more pessimistic predictions forecast a 1 to 4% sales increase in 2024, as the personal luxury goods market could be suffering from the global geopolitical situation - including the macroeconomic situations in China and the US.