Luxury Goods Market Business Overview 2021 | Major Key Players and Stockholders, Business Strategy Analysis by Distributors, Industry Size with Share and Business Expansion Plans till 2028
The global luxury goods market size is
projected to reach USD 352.84 billion by 2027, exhibiting a
CAGR of 4.6% during the forecast period. It stood at USD
316.16 billion in 2019 and USD 257.26 billion in
2020. Heightening luxury goods consumption by wealthier people worldwide will
stoke the market growth, suggests Fortune Business Insights™, in
its report, titled, “Luxury Goods Market, 2021-2028”. According to the data
published by Oxfam International in 2020, 2153 billionaires are present
worldwide. These billionaires are wealthier than the total of 4.6 billion
people altogether. Moreover, in this pandemic crisis, rich people have gotten
richer. Forbes reported that more than 22000 billionaires have collectively
made $1.9 trillion in the year of crisis.
The epicenter of the pandemic, China
tops the ranking of wealthier people. It has more wealthy people than the U.S.,
states Credit Suisse Report on Global Wealth. It also mentions that the
Asian country has 4.4 million millionaires. They make the world's top 10% of
earners.
This rise in wealth is spent by these
wealthier people in the name of luxury brands and luxury goods. For them, the
quality and brand of the product are of higher importance than the price. These
consumers are willing to pay for premium products as they offer them innovative
and richer experiences that make them spend on these luxury goods lavishly.
COVID-19 Impact
The COVID-19 pandemic has led to a
severe economic downturn, impacting industries and businesses in a variety of
ways. Companies and industries worldwide were shut. The lockdown led to the
cancellation of several fashion-related shows. Due to travel bans, luxury goods
that are purchased from airports, cruises, and duty-free shops were also
affected. This all impacted the market growth negatively.
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Segmentation
Based on the product type, the market
for luxury goods is divided into watches & jewelry, perfumes &
cosmetics, clothing, bags/purses, and others. Out of these, the clothing
segment earned 28.79% in terms of share in 2019. By end-users,
it is divided into men and women. On the basis of distribution, it is segmented
into online and offline. In terms of geography, the market is categorized into
North America, South America, Europe, Asia Pacific, and the Middle East &
Africa.
Highlights of the Report
The report gives a thorough analysis of
the latest market trends, top market segments, and factors that are majorly
driving the market. The different market segments and their regional analysis
are also comprehensively discussed in the report. Additionally, the report
talks about the dominant strategies adopted by key market players and the
impact of COVID-19 on the market.
Drivers and Restraints
Rising Demand for Sustainable Products
to Promote Market Growth
The new trend of sustainable products
is making its mark in the luxury business. Leathers made from plants and
fruits, such as pineapple are used to make jackets, shoes, and handbags
replacing the use of animal leather.
Top luxury goods manufacturers, such as
Prada signed an agreement with Credit Agricola Group to lower the usage of
water and electricity. It is using safer raw materials to manufacture its
products. It also promotes the usage of regenerated nylon. Such sustainable
measures taken by these companies will benefit them in the longer run due to
the current climatic crisis around the world and thus these
environment-friendly initiatives are expected to fuel the luxury goods market
growth.
On the flip side, the availability of
second-hand products and their dupes are negatively affecting the market.
Regional Insights
Europe to Hold Leading Market Position
Stoked by Presence of Various Luxury Brands
The European market stood at USD
103.86 billion in terms of the luxury goods market share in 2019. It’s
due to the presence of a large number of luxury brands in this region. As per a
report by Savills Global Luxury Retail 2019 Outlook, London was on the list of
top cities globally as it accounted for a total of 9.6% of the global luxury
store openings in the year 2018. Paris was on number four in this list. This is
positively promoting the luxury goods market in this region.
The North American region is also
making its presence as it is the home to a larger number of wealthier people
and self-made entrepreneurs. A report by Billionaire Bonanza -2020 mentions
that the number of billionaires in this region has increased over the years. In
the year 2020, it reported 614 billionaires. In the U.S., people are highly
inclined towards luxury items, especially fashion and accessories. Also, due to
their wider availability, it is easy for people to use them, and thus it's
making the market flourish in this region.
The Asia Pacific region, especially
China's luxury goods consumption, is high. Last year, a U.K.-based luxury brand
Burberry opened its first retail store in Shenzhen.
Competitive Landscape
New Collaborations and Product Launches
by Key Players to Energize the Market
In an attempt to deepen their foothold
in the market, several luxury good companies are engaging in innovative
collaboration with different brands and organizations. These partnerships are
enabling luxury brands to develop unique offerings for customers and widen
their market reach. For example:
- In the year 2019, Chow Tai Fook Jewelry
launched its new line of jewelry associated with Marvel. The line features
Captain America, Doctor Strange, Thanos, Iron Man,
Thor, and Avengers with 18k gold and silver
jewelry.
- L’Oréal, in 2020, signed an agreement
with Prada to collaborate over luxury beauty products that will come into
the market in the near future.
Industry Development
October 2020: LVMH acquired Tiffany &co. for USD131.50 per
share. By this acquisition, the company is expected to strengthen its range of
luxury jewelry items.
List of Key Players Covered in the
Luxury Goods Market Report:
- LVMH Moët Hennessy-Louis Vuitton SA
(Paris, France)
- Compagnie Financière Richemont SA
(Geneva, Switzerland)
- Kering SA C (Paris, France)
- Chow Tai Fook jewelry Group Limited
(Central, Hong Kong)
- The Estée Lauder Companies Inc. (New
York. U.S.)
- Luxottica Group SpA (Milan, Italy)
- The Swatch Group Ltd. (Biel / Bienne, Switzerland)
- L'Oréal Group (Clichy, France)
- Ralph Lauren Corporation (New York,
U.S.)
- Shiseido Company Limited (Tokyo, Japan)
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