According to a study by consultancy firm Bain, the global luxury sector could erase the effects of the Covid-19 pandemic this year and return to its 2019 levels.
Thanks to the recovery of purchases in the key markets of the United States and China, the global luxury sector is on track to return to its pre-pandemic levels. After a sharp contraction in 2020, the luxury goods market will grow by 29% in 2021. According to consultancy firm Bain, global sales of luxury goods, including clothing, leather goods and jewellery, could reach €283 billion this year, up 4% on 2019. Sales in the sector as a whole fell by 23% in 2020, the first time this has happened since 2009.
In the United States, which has become the sector’s largest market ahead of Europe, the recovery in activity has been boosted by the coronavirus vaccination campaign, as well as by the rapid rebound in domestic consumption. On the other side of the Pacific, in China, demand remained strong as the Chinese are currently unable to travel abroad and therefore make their purchases at home.
In Europe, the sector has not yet returned to pre-pandemic levels, despite a recovery in tourism over the summer. According to Bain, the European market will not return to 2019 levels until at least 2024.
The largest companies in the sector, such as LVMH, Hermès and Kering, are experiencing a significant rebound, and are managing to generate results above 2019 levels, and are benefiting from the easing of health constraints.
With the slow recovery in international tourism, brands have turned to a more domestic clientele, whether in the major luxury cities or in those of lesser importance. “Brands are attracting new customers with robust marketing and online campaigns, while existing customers are buying more,” says Federica Levato, a partner at Bain and co-author of the study.
The firm estimates that a quarter of global luxury sales for the year were made by new customers rankhaya.com.
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