Bain &Co Predicts Up To 19% Growth For Luxury Industry In 2021
FUNKE OSAE-BROWN
Bain &Co predicts up to 19% growth for luxury industry in 2021 as the world recovers from the second wave of the pandemic. There was a drop in demand for luxury goods in 2020 due to the Covid-19 outbreak which was the closure of many stores across the world.
In addition, the travel bans meant luxury consumers were unable to travel abroad to purchase their favourite luxury goods or enjoy their favourite destination. Europe is worse hit by the impact of the pandemic as sales dropped by 36% in 2020, with sales in The Americas down 27% according to Bain’s 2020 Fall Luxury report.
High-spending Chinese tourists are the affluent spenders in Europe and America, who before Covid made about two-thirds of their purchases in tourist cities, like Paris, London, Rome, New York, and Los Angeles. Bain showed that in 2020 some 80% of all luxury spending were made locally.
Furthermore, the personal luxury goods market, which includes fashion, jewelry, watches and beauty, dropped by 23% to $257.5 billion in the same year, this is the biggest annual market decline in the history of the luxury sector. Also, it was the first time sales have dropped since 2009 meaning the Covid-19 pandemic took a huge sting out of the ever buoyant luxury market.
The report further shows the luxury market won’t get to the 2019 levels until 2022 or 2023, but 2021 growth is still questionable as the second wave of Covid is threatening the recovery that started slowly in the second half of 2020.