The global luxury goods market sank into an unprecedented crisis due to Covid-19. Recovery has since started, mainly as demand coming from China rose again. In the most optimistic scenario, the market could return to 2019 levels before the end of the year, according to consulting firm Bain & Company.
Two possible scenarios
In the first quarter of 2021, the luxury goods industry is growing again. Compared to 2019 – the last comparable year – there was a growth of 0 to 1 %. Increased demand mainly came from China, but the unexpected revival of luxury trade in the United States also played an important role. In most other regions, recovery is much slower: in Europe, the industry suffers from a slower vaccination campaign and the lack of international tourism.
The outlook, therefore, remains very fragile and uncertain, Bain & Company reports. The consulting firm sees two possible scenarios for the market’s revival in 2021. In the most likely scenario, growth would be slowed down during the year by slower domestic luxury purchases and limited regional tourism. As a result, the full recovery would not be achieved until 2022, and the market would reach between 250 and 265 billion euros this year.
The most optimistic scenario assumes that the recovery continues throughout the year and the market returns to 2019 levels. In this case, the market could reach between 280 and 295 billion euros.
