The luxury goods market will skyrocket by more than 6% in the next four years, according to a report from Boston Consulting Group and Comité Colbert.
The report, titled “Luxury Outlook 2022,” is a qualitative analysis of 40 luxury company executives and a survey on 2,000 luxury clients and non-clients across France, Germany, Italy, Spain, Switzerland, the United States, and the United Kingdom.
The study highlights key trends in the luxury goods market and predicts what future growth will look like.
As far as trends go, the report shows that sustainability and online shopping are two trends that have come to dominate the market recently. For instance, 65% of consumers are looking for brands committed to green practices, half of all respondents say that virtual stores are vital for brands to succeed, and 80% believe that luxury companies should be responsible for their products' full life cycles, including recycling and the ethical sourcing of materials.
Joël Hazan, Managing Director and Partner at BCG and co-author of the report, explains that "the industry is now shifting from a competitive mindset towards a coalition mindset: leading luxury companies have understood they need to work jointly on key environmental issues to come up with scaled solutions. The objective being to build on the industry DNA of exemplarity and quality to develop robust sustainable standards at industry level, shifting from a responsibility of quality towards a responsibility of transmission."
In terms of growth in the luxury goods sector, the report shows that it will mostly take place in regions other than Europe and the U.S. The luxury perfume market in China is expected to become the second-largest in the world by 2025. The Indian luxury market is also set to grow as a result of population increases and further urbanization. This market, the report says, could reach $3.7 billion by 2026. Sales also could increase in the metaverse, Luxury Outlook predicts, as 64% of respondents believe that this virtual reality platform allows consumers to discover new luxury brands.