Impacted by a turbulent 2020, the luxury market has started its path towards recovery. The industry returned to growth in the first quarter of 2021, growing by 0-1% versus 2019. And, if current market dynamics persist, luxury could return to 2019 levels as of this year, says a press release from Bain & Company.
According to Bain& Co, China continues to drive the recovery while the United States unexpectedly rebounded. The acceleration of this key region is one of several new trends of note, along with the importance of a human touch alongside digital interactions and the increasing presence of brands in the secondhand market. And though the outlook for 2021 remains uncertain, the market is expected to reach between €250-€295 bn, depending on which one of two scenarios outlined in the report plays out over the year.
The key findings from Bain & Company, in the “Bain & Company Luxury Study 2021 Spring Update” released recently in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation are, a strong start to the year driven by China and the US where comparing versus the first quarter of 2019; Two possible scenarios for the market rebound in 2021 where the market could reach €280-295 bn this year or full recovery to 2019 levels would be expected only in 2022 and the market would reach €250-265 bn this year; and three trends, including online channel to keep an eye on in coming months.
The trends to watch are the changes in the market map with new city hubs, as well as the rise of subcultural relevance and next-generation mindset; the human touch in luxury remains needed and whether in-store or remotely, these interactions will play a critical part in maintaining customer loyalty and; the secondhand market segments worth €28 bn euros in 2020 touches multiple consumers.
“It’s clear that consumers still want to buy luxury goods, and this, along with the brands’ ability to adapt and innovate, is driving a return to growth in the market,” said Claudia D’Arpizio, a Bain & Company partner and lead author of the study.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
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