More than 50 million consumers have stopped buying high-end luxury goods such as fine wine and spirits in the past two years due to inflation-beating soaring prices, a report has revealed.
This is a key finding of Bain & Company’s latest Luxury Report, compiled in partnership with Altagamma, the Italian luxury goods manufacturing industry association.
However, this year the travel, automotive, and fine wine and food and beverage sectors all reported modest growth.
“Luxury experiences continue to maintain traction as consumers prefer personal treatments and wellness over tangible goods and shift spending toward travel experiences and social events,” the report concludes.
This suggests that the personal luxury goods market is set to boom this year for the first time since the Great Recession of 2009, with only a third of luxury brands ending the year with positive growth, compared to a third of last year. It has decreased from 2.
Global luxury spending is expected to remain roughly flat at €1.5 billion this year as consumers face macroeconomic uncertainty and rising prices across brands and cut back on discretionary purchases. There is.
China’s downturn
Just as China led a pre-pandemic luxury consumption boom, its growing middle class has proven to be the most cautious in spending in the face of inflation and economic uncertainty.
Luxury goods pioneer LVMH said last month that sales in China had fallen 3% so far this year.
“To win back customers, especially younger customers, brands need to be creative in taking the lead and broadening the conversation,” said Claudia Dalpizio, a partner at Bain. At the same time, you must keep your top customers front and center, surprising and delighting them while rediscovering the one-on-one relationship. ”
Bain expects a “moderate recovery” to occur in the second half of 2025 in China, Europe, the United States and especially Japan, where exchange rates are favorable.
Indeed, one of the factors this year has been the arrival of wealthy Chinese to Japan, attracted by prices that are substantially lower than in their home market.
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