Global Luxury Sales Set To Outpace Pre-Covid Levels This Year
The global sales of personal luxury goods is expected to reach $327 billion this year, bouncing back from the crisis with a 4 percent increase, at constant exchange rates, compared to 2019, before the pandemic hit.
The largest players in the industry like LVMH, Hermes and Kering have already recovered strongly from the health crisis, pushing well above 2019 levels of business as lockdowns ease and socialising resumes.
Experts believe the luxury goods sector is set to move past the coronavirus crisis this year, fuelled by domestic spending in the United States and China, particularly on high-end shoes, leather goods and jewellery, as per a study by consultancy firm Bain.
Business in the United States, which this year overtook Europe as the largest market, was boosted by early vaccination campaigns and a quick rebound in local consumption. On the other hand, demand in China remained strong through October despite lockdowns in some areas.
In Europe, the business has yet to return to pre-covid levels and may take until 2024 to do so, despite the country’s tourism sector had seen some activity over the summer.
Although sales linked to international travel have not returned, brands brought on new business by focusing on catering to consumers domestically, not only in top luxury hubs but also in second and third-tier cities. A quarter of global sales this year were made with new consumers, the study further stated.
"Brands are attracting a new customer base with strong marketing and online campaigns while existing customers are buying more," said Federica Levato, Partner, Bain.
Shoppers under 40 are expected to account for more than 60 percent of luxury purchases this year and more than 70 percent by 2025.