Overview of Global Luxury Industry

• The global luxury market is gradually recovering after the shock of the new crown epidemic.2023 global luxury market sales surpassed €1.5 trillion, a record high. Strong demand from the Chinese market and digital transformation are the main drivers. Consumers' focus on personalization, sustainability, and changes in consumer behavior are prompting luxury brands to meet market demand through technological innovation and customized services. The potential of emerging markets, the rise of the second-hand market and cross-border collaborations between brands present new growth opportunities for the industry.

Market Size and Growth

• The global luxury goods market reached €345 billion in sales in 2022 and is expected to grow by a further 5-12% on top of that to reach €360-380 billion in 2023. By 2030, global luxury goods sales are expected to reach €530-570 billion, approximately 2.5 times the 2020 level.

Consumption trends

• Consumers are favoring luxury experiences, with the rebound in the travel industry driving growth in experiential spending on hotels, fine dining and fine restaurants. Jewelry is currently the best-performing category in the luxury market, with consumers often making purchasing decisions with an investment objective. The apparel category has been upgraded to capture the headcount, while the footwear category has been impacted by a reduction in spending by “admiring” consumers.

Regional Market Performance

• The Mainland China market resumed growth in the first quarter of 2023 and is expected to re-emerge. The Hong Kong and Macau markets have benefited from the resurgence of cross-border travel and the acceleration of the luxury market. Other regions in Asia such as South Korea, Japan and Southeast Asia markets are also showing varying degrees of growth. Growth in the US market is set to slow down, while the European market has made a strong start, empowered by headline clients.

Future outlook for the luxury industry

• Challenges facing the luxury industry include market volatility and uncertainty, and the need for brands to optimize and deliver value propositions across price points and touchpoints in order to expand brand reach and foster customer advocacy and loyalty. At the same time, brands should focus on decarbonizing the industry chain and leveraging generative AI technologies to gain a competitive advantage.