Global Wealth and Luxury Report 2022

March 2022

The pandemic has had an unprecedented impact on ultra-high net worth, high net worth, and affluent populations; their wealth, as well as their spending habits on luxury goods and services. The top wealth segments stand out more now than ever before and remain the key consumers and drivers of luxury goods. We provide an overview of the global luxury goods and wealth landscape and consider the implications of the pandemic on luxury businesses seeking to target wealthy and affluent consumers.

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Key Findings

Wealthy and affluent consumers as drivers of luxury

As we are still in the midst of the COVID-19 pandemic which creates greater financial uncertainties and insecurities for regular income earners than for wealth holders, those in the top wealth segments stand out more than ever before as the key consumers and drivers of the luxury goods industry.

China, India to see strong wealth gains but US to remain dominant

Thanks to a positive economic outlook, emerging and developing Asia (especially China and India) will see impressive growth in the number of UHNWI, HNWI and affluent adults between 2022 and 2030. Nevertheless, the US is expected to remain by far the biggest wealth and luxury market in total consumer numbers.

COVID-19 continues to impact recovery of luxury goods industry

The pandemic remains a significant constraint on luxury goods going into 2022. Ongoing travel restrictions, lockdowns and social distancing measures are still in place in some key markets. However, luxury goods sales continue to recover thanks to strong global GDP growth, rising consumer confidence as well as more targeted mitigation practices and greater consumer adaptation.

Pivot to digital

As home isolation has accelerated the already increasing use of digital devices among consumers across markets and generations, brands are shifting to digital marketing and e-commerce, implementing digital components to the in-store shopping experience, and beginning to meet emerging consumers in the “metaverse” and other digital platforms.

Brands aim to capture emerging consumers

New customer acquisition remains a costly challenge. Luxury brands across categories are increasingly vying to increase purchase occasions and reach entirely new consumer groups by expanding their product offering both within existing and across new, especially fast-growing, product categories – including through well-publicised collaborations with culturally-relevant brands and personalities.

Scope
Key findings
UHNWI, HNWI and affluent consumers are drivers of luxury, especially in uncertain times
Global luxury goods sees return to pre-pandemic spending levels in 2022
Luxury shows optimistic income elasticity thanks to shared wealth portfolios of global HNWI
Wealthy consumers show repatriated spending driven by Asia Pacific and North America
The US to remain the world’s most important wealth market
The US to surpass its pre-pandemic sales levels by the end of 2022 thanks to local wealth
China to boast the second largest wealthy and affluent population
China’s recovery drives luxury goods sales but risk of new variants poses huge threat
LVMH results further cement the Asia-led recovery and growth in China’s personal wealth
Wealthy Chinese “locavores” drive strong momentum for Kering’s annual sales
Travel departures from China set to surpass US as local Chinese wealth continues to grow
Will China’s wealth and a return to travel help save luxury travel and hospitality?
Emerging upper- and middle-class consumers are increasingly choosing to trade up
Affluent consumers in developed markets to see stronger wealth gains
Consumers in key luxury and wealth markets may still be facing low consumer confidence
Over one in 10 Swiss adults have net worth of at least USD1 million
Russia’s UHNWI led with highest wealth per adult in 2021
Remote and hybrid working spurs on the dawn of the affluent rural urbanite
New business opportunities for luxury retail as pockets of wealth open up in suburbia
Luxury retailer Harrods bets on suburban wealth for its new stand-alone stores
Luxury brands launch lifestyle equipment for the health and wellness-seeking consumer
Awareness of social and environmental issues rises across all wealth-generation groups
Purpose-driven brands increasingly important with affluent and wealthy consumers
Higher e lectric vehicle registrations in more affluent markets, but competition rises
Evolving behaviour from wealthy consumers will shape strategies over the forecast period
Luxury companies must keep up with the fast-evolving economic landscape
Robust global GDP growth to underpin rising wealthy and affluent population
Conclusions

Luxury Goods

This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.

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