Global luxury market value expected to reach US$1.6 trillion for 2023
The global luxury market is heading for a record high value of 1.5 trillion euros (US$1.64 trillion) this year as a resurgence in social activities and travel pushed up spending across all categories, a recent industry study shows.
Chinese customers are expected to account for 35 to 40 percent of the personal luxury goods market by 2030, while Europeans and Americans together will represent 40 percent, according to the latest Bain & Company report with Altagamma, the Italian luxury goods manufacturers' industry association.
The global luxury market is maintaining an 8 to 10 percent annual growth rate, similar to last year's, showing unparalleled resilience despite geopolitical and macroeconomic shifts.
The Chinese mainland posted strong performance in the first quarter despite momentum slowing amid macroeconomic uncertainties.
China's Hainan Province is poised to grow as a luxury hub, and is expected to become an entire duty-free island by 2025.
The report also points to a softening performance in global personal luxury goods in 2024, with estimated low-to-mid single digit growth based on current scenarios.
As global luxury tourist purchases have almost recovered to pre-pandemic levels, there is still untapped potential remaining in many areas.
The key segment, personal luxury goods, has experienced continued growth and is projected to reach 362 billion euros by the end of year.
"Around 65 to 70 percent of luxury brands recorded positive growth in 2023, compared with around 95 percent in the previous year, and it's crucial for brands to take bold decisions to stay in the game," commented Bruno Lannes, a senior partner at Bain & Company.
Looking ahead, the report noted that the market is set for long-term growth with strong fundamentals, and brands should focus on providing differentiation and meaningful experiences across the entire customer journey.
Brands must navigate through rising multi-generational complexity to serve different needs across their consumer base. Generation Z is positioned at the forefront of social and cultural changes and by 2030, they will account for 25 to 30 percent of luxury market purchases, while millennials will account for 50 to 55 percent.
