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Strategy Briefing

World Market for Luxury Goods

Mar 2021

US$1,325

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About This Report

New Report Guarantee

If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

Luxury goods was among the industries hardest hit by the Coronavirus (COVID-19) pandemic with sales damaged by temporary store closures, travel bans and weakened consumer spending. In addition, the pandemic also accelerated a channel shift to e-commerce as well as an emphasis on sustainability and wellness. This report provides a top-line overview of market performance and prospects, including the impact of COVID-19, and outlines key trends within the global luxury goods business landscape.

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Key Findings

Major disruption in luxury goods and services

The COVID-19 pandemic is having an unprecedented impact on the luxury goods industry with global sales set to slump across all major markets. Sales in the world’s two most important luxury markets, namely China and the US, are expected to decline by 5% and 18% respectively, in 2020, and existing economic and political problems as well as income and wealth losses of affluent individuals in key markets are adding to the challenging mix.

Asia Pacific continues to drive sales but risks remain

Asia Pacific continues driving sales and remains the most important region overall for luxury goods making up almost half of all spending. Much of this spending has been driven by China’s middle, wealthy and affluent classes. That said, China’s wealthy and affluent population as a whole is set to contract with no rebound to pre-COVID-19 levels until 2024.

Digital innovation accelerates and sparks corporate partnerships

E-commerce and digital innovation will undoubtedly grow and expand as consumers continue to enjoy the convenience of online shopping, and the shift to learning, working, eating, shopping, playing and socialising moves further to the home and online. Both physical and digital retailers will need to go above and beyond to create new bonds and build loyalty with customers who will be looking to be entertained, rewarded and valued.

Sustainable initiatives on the rise

Luxury businesses are facing increasing pressure from consumers, governments, investors and NGOs to have a more positive impact on people and the planet. Sustainable initiatives and ESG will be key for all luxury players over the next five years, with the bulk of the investment going into projects related to waste, recycling, inclusivity, social and community projects and sustainable product development.

Innovation is at the heart of the recovery for the luxury industry

New ways of thinking and doing will be key to building resilience and one thing that should not be paused despite the economic crisis, is innovation. At a time when consumers are worried about the state of the planet as well as social issues, luxury businesses are urged to leverage investment in research and development to create new innovations that will resonate with consumers post-COVID-19.

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Introduction

Scope

Key findings

Global Outlook

Luxury goods ranked fourth in global consumer goods

COVID-19 poses huge threat to global luxury market

Squeezed middle class income weakens discretionary spending

Luxury goods among hardest hit across all fmcg markets

Switzerland reclaims its number one position in per capita spending

Asia Pacific leads in sales with China at the helm

Wealth declines least in China with modest income gains…

… but China’s wealthy still face downturn despite upbeat economy

North America’s luxury spending contracts by nearly a fifth

North America: ultra-HNWIs adversely affected by the pandemic

US ultra-wealthy population and luxury market hit hardest overall

Western Europe in the eye of the COVID-19 storm

France to see the biggest contraction in Western European wealth

At least one in 10 wealthy French to leave the ranks in 2020

Global outlook

Brighter outlook for 2021 led by Asia Pacific

China will be the first major economy to show signs of full recovery

Leading Companies and Brands

Competitive environment remains highly concentrated

Luxury car manufacturers continue to dominate sales

Luxury powerhouses pivot to digital channels amid pandemic

Luxury giants face strong headwinds despite optimistic results

Key Trends Shaping Luxury Goods

COVID-19 a catalyst for change across the luxury landscape

Examining five trends shaping the luxury goods industry

Questions raised over future of long-term shopping behaviour

COVID-19 a catalyst for change in our shopping behaviour

Physical and digital worlds collide to create a phygital luxury space

Burberry ahead of the curve in digital innovation

Purpose-driven luxury and ESG gains momentum

Trust, transparency and inclusivity at the core of consumer loyalty

People before profit challenges the status quo across luxury

All eyes look to the East as repatriated spending sets in

Key fashion hotspots void of USD12 billion Chinese spending

Could China’s repatriated spending offer hope of a silver lining?

Domestic “revenge shopping” helps to offset China’s losses

Redefining value and affordability without becoming ubiquitous

Buying less but buying better could favour luxury brands

Design, tech, luxe and value at Mollie’s new “budget luxe” creation

Luxury wellness reaches new heights in the wake of coronavirus

All-encompassing solutions in luxury wellness

ARTAH transforms the meaning of at-home health and wellness

Category Snapshots

Category snapshot: premium and luxury cars

Category snapshot: designer apparel and footwear

Category snapshot: fine wines/champagne

Category snapshot: luxury spirits

Category snapshot: luxury eyewear

Category snapshot: luxury jewellery

Category snapshot: luxury leather goods

Category snapshot: luxury portable consumer electronics

Category snapshot: luxury timepieces

Category snapshot: luxury writing instruments and stationery

Category snapshot: super premium beauty and personal care

Category snapshot: luxury hotels

Category snapshot: luxury foodservice

Regional Industry Snapshots

Regional industry snapshot: Asia Pacific

Regional industry snapshot: Australasia

Regional industry snapshot: Eastern Europe

Regional industry snapshot: Latin America

Regional industry snapshot: Middle East and Africa

Regional industry snapshot: North America

Regional industry snapshot: Western Europe

Appendix

Definitions

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Megatrends

Strategy Briefing

World Market for Luxury Goods

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Key Findings

Major disruption in luxury goods and services

Asia Pacific continues to drive sales but risks remain

Digital innovation accelerates and sparks corporate partnerships

Sustainable initiatives on the rise

Innovation is at the heart of the recovery for the luxury industry

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key findings

Global Outlook

Luxury goods ranked fourth in global consumer goods

COVID-19 poses huge threat to global luxury market

Squeezed middle class income weakens discretionary spending

Luxury goods among hardest hit across all fmcg markets

Switzerland reclaims its number one position in per capita spending

Asia Pacific leads in sales with China at the helm

Wealth declines least in China with modest income gains…

… but China’s wealthy still face downturn despite upbeat economy

North America’s luxury spending contracts by nearly a fifth

North America: ultra-HNWIs adversely affected by the pandemic

US ultra-wealthy population and luxury market hit hardest overall

Western Europe in the eye of the COVID-19 storm

France to see the biggest contraction in Western European wealth

At least one in 10 wealthy French to leave the ranks in 2020

Global outlook

Brighter outlook for 2021 led by Asia Pacific

China will be the first major economy to show signs of full recovery

Leading Companies and Brands

Competitive environment remains highly concentrated

Luxury car manufacturers continue to dominate sales

Luxury powerhouses pivot to digital channels amid pandemic

Luxury giants face strong headwinds despite optimistic results

Key Trends Shaping Luxury Goods

COVID-19 a catalyst for change across the luxury landscape

Examining five trends shaping the luxury goods industry

Questions raised over future of long-term shopping behaviour

COVID-19 a catalyst for change in our shopping behaviour

Physical and digital worlds collide to create a phygital luxury space

Burberry ahead of the curve in digital innovation

Purpose-driven luxury and ESG gains momentum

Trust, transparency and inclusivity at the core of consumer loyalty

People before profit challenges the status quo across luxury

All eyes look to the East as repatriated spending sets in

Key fashion hotspots void of USD12 billion Chinese spending

Could China’s repatriated spending offer hope of a silver lining?

Domestic “revenge shopping” helps to offset China’s losses

Redefining value and affordability without becoming ubiquitous

Buying less but buying better could favour luxury brands

Design, tech, luxe and value at Mollie’s new “budget luxe” creation

Luxury wellness reaches new heights in the wake of coronavirus

All-encompassing solutions in luxury wellness

ARTAH transforms the meaning of at-home health and wellness

Category Snapshots

Category snapshot: premium and luxury cars

Category snapshot: designer apparel and footwear

Category snapshot: fine wines/champagne

Category snapshot: luxury spirits

Category snapshot: luxury eyewear

Category snapshot: luxury jewellery

Category snapshot: luxury leather goods

Category snapshot: luxury portable consumer electronics

Category snapshot: luxury timepieces

Category snapshot: luxury writing instruments and stationery

Category snapshot: super premium beauty and personal care

Category snapshot: luxury hotels

Category snapshot: luxury foodservice

Regional Industry Snapshots

Regional industry snapshot: Asia Pacific

Regional industry snapshot: Australasia

Regional industry snapshot: Eastern Europe