(Finance) – After a closed 2022, despite the uncertain economic conditions, with the record value of 345 billion euros (+19% on 2021), the global market for personal luxury goods saw an excellent first quarter 2023 (with growth around 10%) leading to a “reasonable optimism for the rest of the year”. This is what emerges from the Altagamma-Bain & Company Monitor on the World Markets for Personal Luxury Goods.
For 2023, the growth estimates have been revised upwards in general, thanks in particular to the recovery of Chinese consumption and to continued good performance of the European one, despite a slowdown in the US market and the persistence of some elements of attention relating to the macroeconomic context (increase in energy costs, still high inflation – albeit slowing down – and potential recession, difficult availability of raw materials, geopolitical tensions and decline in the power of ‘purchase of certain groups of consumers). The estimation of the growth of marginality of businesses for 2023 is around +10%.
“Despite the macroeconomic and geopolitical uncertainty, the high-end sector confirms stable and solid growth – commented Stephanie LazzaroniGeneral Manager of Altagamma – This is due on the one hand to a type of consumer better equipped to face the economic difficulties, on the other to the sustained international tourist flows to Europe – especially in Milan and Paris – and to the reopening of China, that shines again”.
The report highlights that the ultra-affluent consumer base remains strong, while there is a willingness to uplift that pushes customers to buy “less”, but “better”.
As regards the categories: leather goods (+11%) are expected to grow the most in 2023 and footwear (+9%) also registers an upward forecast compared to the latest estimate; the clothing and cosmetics category is expected to grow by +8%, consolidating its trend supported by a push towards well-being and body care which extends to men and which fables niche perfumes; forecasts for watches increasingly perceived as a timeless investment are up by +8%.
“In addition to the evolution of the macroeconomic context – they said Claudia D’Arpizio and Federica Levato, Senior Partner of Bain & Company – there remain some crucial medium-term challenges that the protagonists of the industry will have to address: first of all, the urgency of decarbonising their value chains and the management of the impacts – and opportunities – linked to use of generative intelligence. In this scenario, many new brands will compete in an arena populated by giants, finding themselves having to combine the entrepreneurial mindset with the need to scale”.
Bain & Company expects additional growth of 5% to 8% this year, with potential “optimistic” scenario which reaches +9-12%, depending on developments in the economic scenario. Long-term, and even considering some potential complexities, the outlook for the market, thanks to the strength of its fundamentals, remains positive, with the industry expected to be valued at €530-570 billion by the end of the decade.