Global sales of luxury goods is expected to rebound this year, driven by domestic spending in the US and China, particularly on jewellery, high-end shoes, and leather goods.
A study by international market consultancy Bain & Company revealed global sales for luxury products is estimated to reach 283 billion euros ($AU441.83 billion) this year, indicating a 4 per cent increase at constant exchange rates compared to the 2019 pre-pandemic situation.
Europe was overtaken by the US as the largest market due to increased local consumption and early COVID-19 vaccination campaigns, while China maintained its strong performance in domestic purchases through October despite lockdowns in several areas.
According to the study authors, Claudia D’Arpizio and Federica Levato, “Sales of shoes, leather goods, and jewellery will comfortably surpass their 2019 levels in 2021, while online sales have continued to thrive”.
Luxury brands Hermes, LVMH, and Kering were among the top performers and have strongly recovered well above 2019 figures with the easing of lockdowns and return to operations, as reported by Reuters
“Brands are attracting a new customer base with strong marketing and online campaigns, while existing customers are buying more” Levato said, with brands targeting local consumers since international travel and tourism activities have not yet fully resumed.
A quarter of the global sales were made by new consumers, as marketing efforts were expanded to second and third-tier cities aside from top luxury hubs worldwide.
“As well as post-lockdown store re-openings, the rebound reflects a hunger among customers globally to shop for luxury goods in their home market, with exceptional growth in mainland China and the Americas,” the authors added.
More than 60 per cent of the purchases were made by shoppers below 40 years old, which is forecasted to increase to more than 70 per cent by 2025 for the same age group.
Last year, overall sales declined by 23 per cent for the sector due to the pandemic, its lowest since 2009.