Global luxury goods sales will exceed preCOVID levels in 2021, Bain consultancy predicts

The luxury goods sector will leave the coronavirus crisis behind this year, driven by domestic spending in the United States and China, especially on shoes, leather products and jewelry, consulting firm Bain said on Thursday.

The firm estimates that global sales of personal luxury goods will reach 283,000 million euros (US $ 327,000 million) this year, recovering from the crisis with an advance of 4%, at constant exchange rates, compared to 2019, before the pandemic.

Business in the United States, which this year overtook Europe as the largest market, was boosted by early vaccination campaigns and a rapid rebound in local consumption.

Demand in China, the growth engine of the luxury industry, remained strong until October despite lockdowns in some areas, as citizens bought from the local market because they were unable to travel abroad.

In Europe, business has not yet returned to pre-COVID levels, and it may take until 2024 to do so, despite the rebound in tourism activity during the boreal summer, added Bain, whose forecasts are closely followed by the luxury industry.

The major players in the industry, such as LVMH, Hermes and Dry They have already recovered strongly from the health crisis, far exceeding 2019 business levels as closures ease and socialization resumes.

Due to the pandemic, overall industry sales fell 23% in 2020, its largest and first slump since 2009.

Although sales linked to international travel have not returned, the brands generated new business by focusing on serving consumers at the national level, not only in the main luxury centers but also in second and third tier cities. A quarter of global sales this year went to new consumers, according to Bain estimates.

“Brands are attracting a new customer base with strong internet marketing and campaigns, while existing customers buy more“, he pointed Federica Levato, partner of Bain and co-author of the study.