In the latest edition of its worldwide survey of the luxury product markets, Bain & Company has reported that they grew by 5 percent in 2018, to reach an estimated value of $1.36 trillion globally.
The 17th edition of the Bain Luxury Study, which is published by Bain & Company for Fondazione Altagamma, the trade association of Italian luxury goods manufacturers, analyzed recent developments in nine segments, led by luxury cars, luxury hospitality and personal luxury goods, including jewelry, which together account for more than 80 percent of the total market.
The market for personal luxury goods reached a record high of $294 billion, representing 6 of percent growth. Worldwide, Bain reported, the personal luxury goods market rose in value across most regions, driven primarily by robust local consumption. Purchases by tourists, which in recent years buoyed sales in Europe, for example, remained flat.
Overall, shoes and jewelry were the leading growth categories in the personal luxury goods market, gaining 7 percent each during the course of 2018. The watch market was generally unchanged from where it stood a year earlier.
Jewelry was among the leading growth categories in the personal luxury goods market, gaining 7 percent during the course of 2018.
CHINESE CONSUMERS LEAD THE SURGE IN WORLDWIDE GROWTH
Lead the positive growth trend around the world were Chinese consumers, whose share of global luxury stood at 33 percent of the total at the end of 2018, up from 32 percent at the end of 2017.
Mainland China’s share of the world total rose to rose to 9 percent, up from 8 percent in 2017. Overall luxury sale in mainland China grew 20 percent to $26 billion, and between 2015 and 2018 Chinese consumers’ local spending contributed twice as much growth in absolute value as their spending abroad, Bain reported.
In Japan, luxury sales rose 6 percent to stand at $25 billion, and across the rest of Asia sales increased by 9 percent to $44 billion.
But the largest luxury market internationally remained the Americas, where spending totaled $90 billion in 2018, up 5 percent from the year before. It was led by a positive U.S. economy, which boosted disposable income and overall luxury spending by local consumers.
Mainland China’s share of the world total rose to rose to 9 percent, up from 8 percent in 2017.
But, while the U.S. market was strong, so was the American dollar. This brought about a curb spending by tourists from Asia and Latin America.
ONLINE SALES CONTINUES ITS INCREASE IN MARKET SHARE
The online luxury market continued to expand strongly, Bain reported, growing by a staggering 22 percent in 2018 to more than $30 billion.
The luxury markets in the Americas made up 44 percent of online sales, but Asia is the new growth engine for luxury online, Bain stated, slightly ahead of Europe.
Accessories remained the top category sold online, but beauty and “hard luxury,” which includes jewelry and watches, was on the rise.
Interestingly, the secondhand market for luxury goods climbed sharply to stand at $25 billion in 2018, mainly as a result of strong growth in Europe and via the online platforms.
The online luxury market continued to expand strongly in 2018, expanding by 22 percent to more than $30 billion.
Retailers saw 4 percent growth in income in 2018, Bain stated, with three-quarters of the amount increase coming from same-store sales. In contrast, wholesalers saw growth of only 1 percent, mainly because of weaker department store performance and tough competition from the online sector.