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The personal luxury goods industry has come roaring back, experiencing a V-shaped recovery in 2021, reports Bain & Company, in the latest edition of its respected luxury study, produced together with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.

According to the report, after a sharp contraction in 2020, the personal luxury goods market grew by 29 percent at current exchange rates to hit 283 billion euro, increasing the size of the market by 1 percent versus 2019 levels.

Looking forward, Bain & Company estimates that the personal luxury goods market could reach between 360 billion and 380 billion euro by 2025, with a sustained growth of between 6 percent and 8 percent annually.

Nonetheless, reports Bain, the overall luxury market — encompassing both the wider luxury goods market and experiences — is still below its 2019 level, reaching approximately 1.1 trillion euro, with a shift from experiences to goods and experience-based goods compensating for just half of the gap versus 2019.

The fall in the experiences market can presumably be traced to falls in international air travel, tourism and live entertainment, mainly a result of the COVID crisis.


According to the Bain report, the revived luxury market has been powered by the resumption of local consumption, the economic engines of China and the United States and consistent strength of the online channel.

Younger customers, both Millennials and Gen Z, continue to drive growth and together are set to make up 70 percent of the market by 2025, Bain says. These shifts in the market have pushed luxury brands to be more purpose-driven, in the push for a more sustainable, diverse and equal society.

“The changes in the luxury industry over the past 20 years have been remarkable, and the emergence from the Covid crisis comes as a renaissance for luxury brands,” said Claudia D’Arpizio, a Bain & Company partner and lead author of the study. “Where once it was all about status, logos and exclusivity, luxury brands are now actors in social conversations, driven by a renewed sense of purpose and responsibility.”

An offshoot of this is the secondhand luxury market, which has been growing strongly as consumers shy away from less sustainable purchases. Bain estimates that the secondhand luxury market will reach 33 billion by the end of 2021, driven by increased demand and a growing competitive arena. As a comparison, the secondhand market has grown by 65 percent between 2017 and 2021, versus 12% percent growth over the same period in firsthand luxury.


Driving the growth is what Bain described as remarkable momentum in China, where the market size has doubled since 2019, as well as solid growth in the United States, where a new map of luxury is fast emerging with increased importance of secondary cities and suburban areas.

The Americas is now the largest global market for luxury, representing 89 billion euro or 31 percent of the global market, while China now represents 60 billion or 21 percent. The Middle East was another bright spot with Dubai and Saudi Arabia leading the growth.

In contrast, Europe, Japan and rest of Asia only partially recovered during 2021 and have still not reached pre-COVID levels. Their comeback is linked to the resumption of global travel. Japan is expected to be back to pre-crisis levels by 2023 and Europe by 2024.

After a 50 percent jump from 2019 to 2020, online continues to power on, growing by 27 percent from 2020 to 2021 to reach an estimated 62 billion euro in market value this year, thanks to accelerated adoption during COVID with newly acquired customers, Bain said. Brand-controlled websites now make up 40 percent of the online segment, up from 30 percent in 2019.

Online in the personal goods luxury market grew by 27 percent from 2020 to 2021 to an estimated 62 billion euro in value, Bain reported.

Over the past 20 years, the leading brands have grown both their share of the market—now reaching close to 33 percent versus 17 percent in 2000—as well as their relative size versus other players—now up to 18 times bigger than the average versus  seven times 20 years ago.

That said, the report noted, there is still a place for rising stars in the industry. While they currently make up only 2 percent of the market, they are experiencing growth twice as fast as the broader market by appealing to fast-moving consumer trends.

“It’s interesting to think about where the industry might be in 20 years from now,” said Federica Levato, a partner at Bain & Company and co-author of the report. “It’s likely that the crisis will mark a turning point for luxury as we knew it—luxury brands will continue to redefine themselves, expanding their mission beyond creativity and excellence, becoming enablers of social and cultural change.”