The global luxury market is projected to reach €1.5 trillion in 2023, an 8–10% growth over 2022. The projection has been made in the latest Bain & Company report with Altagamma.
- Despite challenging macroeconomic conditions, the market registered robust growth of 11–13%, at constant exchange rates. This is consistent with last year's growth rate and translates to a ~€160 billion increment in spending across luxury categories.
The highlights: Spending on experiences, particularly, recovered to historic highs, fuelled by a resurgence in social interactions and travel.
- The key segment, personal luxury goods, has experienced continued growth in 2023 and is projected to reach €362 billion by end of year, 4% higher than 2022 at current exchange rates.
- However, headwinds remain heading into the fourth quarter, including fragile consumer confidence, macroeconomic tensions in China, and sparse signs of recovery in the US.
- The research suggests a softening personal luxury goods performance in 2024, achieving low-to-mid single digit growth over 2023, based on current scenarios.
Regional perspectives: Global luxury tourist purchases have nearly reached pre-pandemic levels, with untapped potential remaining in many areas.
- Europe has enjoyed a progressive pickup in tourism, driving growth across countries, with long-haul resort locations attracting high spenders alongside key luxury cities. Even if local aspirational customers were impacted by macroeconomic instability, stable top-customer pools maintained positive momentum contributing to market growth.
- The Americas have seen a deceleration throughout the year, posting an 8% drop from 2022, as widespread uncertainty continues to impact aspirational customers' spending.
- Saudi Arabia is accelerating, attracting investments of major luxury brands; and Australia has provided fertile ground for growth.
- Mainland China posted a strong performance after its first quarter reopening but slowed progressively as new macroeconomic topics arose. Hainan is poised to grow as a bright luxury hub, set to become an entire duty-free island by 2025.
- Japan is booming, thanks to sound local customers and the weak Yen, favoring touristic inflows. Conversely, South Korea is facing a challenging year, with unfavorable macroeconomic headwinds impacting local consumption and strong currency leading tourists to buy elsewhere.
Luxury market in 2030: Solid fundamentals are poised to continue to drive market growth, despite possible bumps along the route.
- Chinese customers will account for 35–40% of the personal luxury goods market, while Europeans and Americans together will represent 40%. And online and monobrand channels are expected to account for two-thirds of the entire market by 2030.
What they said:
This is a defining moment for brands, and the winners will separate themselves through resilience, relevance, and renewal—the basics of the new value-centred luxury equation. The luxury market is generating positive growth for 65–70% of brands in 2023, compared to 95% in 2022. To stay in the game, it will be crucial for brands to take bold decisions on behalf of their customers.
— Claudia D'Arpizio (Lead Author)
Partner / Leader
Bain & Company / Luxury Goods and Fashion
The market is set for long-term growth, rooted on strong fundamentals. Capturing and amplifying the market potential will be key, as the clear convergence among luxury markets allows for further expansion. Players have the opportunity, but also the responsibility, to reinforce their meaning, while leveraging strategic M&A to redefine the boundaries of the industry. These will be foundational drivers for growth in the future.
— Federica Levato (Co-Author)
Partner / Leader
Bain & Company / EMEA Luxury Goods and Fashion practice
