Consultancy firm Bain & Company that’s known for its in-depth market research has released a report about the global personal luxury goods market’s recovery. The report called ‘Bain & Company Luxury Study 2021 Spring Update’ has been released in collaboration with Fondazione Altagamma, an Italian luxury goods manufacturers’ industry foundation.
Here’s all you need to know about the report:
The report sounds positive and promising—following a turbulent year, the luxury industry is set on the path of recovery. The industry returned to growth in the first quarter of 2021, growing by 0 to 1 per cent as compared to 2019 (2019 is viewed by the industry as the last comparable year).
China, one of the biggest luxury markets in the world, continues to drive the recovery. The US, though, unexpectedly rebounded and the acceleration of this is one of the several new trends to note along with the importance of a human touch alongside digital interactions and the increasing presence of brands in the secondhand market.
“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.
China is driving the recovery due to continuous repatriation and acceleration of domestic spending on luxury.
Europe still lags behind though, due to a lack of international tourism and slower vaccination campaigns.
The US market has been a surprise bright spot due to the renewed consumer confidence coupled with stimulus and a rapid vaccine rollout. All these factors led to luxury consumption at a surprisingly fast pace.
The outlook for 2021 still remains uncertain. The market is expected to reach between €250 to €295 billion, depending on which one of the two scenarios (outlined below) plays out in the second half of the year.
There are two possible trajectories for the recovery in 2021:
Scenario 1 (probability 30 per cent):
The recovery path will continue throughout 2021, winning back the 2019 market level as early as this year. In this outcome, the market could reach €280 to €295 billion this year.
Scenario 2 (probability 70 per cent):
Despite the strong momentum of the first quarter, full year growth gets crushed due to limited intra-regional tourism and slower domestic luxury purchases. In this case, the full recovery to 2019 levels will be expected only in 2022. And the market would reach €250 to 265 billion this year.
LVMH boss is now the second-richest man in the world
As per Bloomberg Billionaires Index, LVMH’s Chairman Bernard Arnault on Monday, became the second-richest man in the world, overtaking Elon Musk. Musk, Tesla Inc.CEO lost this spot as the electric vehicle-maker’s shares plummeted 2.2 per cent.
72-year-old Arnault’s current net worth is $161.2 billion, which is being attributed to the massive sales of his firm’s luxury goods in China and a few other Asian countries.
He’s in charge of more than 70 luxury brands including and has 96.5 per cent stake in Christian Dior, which controls 41 per cent of LVMH.