The COVID-19 crisis pushed the luxury goods market to the sharpest fall ever, with revenues dropping by 9% year-over-year amid the lockdown. However, the economic turmoil also triggered a transformation of the entire sector, expected to drive impressive market growth in the following years.
According to data presented by Finaria, the revenues of the global luxury goods market are forecast to grow by 12.9% year-over-year and hit $322bn in 2021. The increasing trend is set to continue in the following years, with the entire sector reaching $366bn value by 2023, a 28% jump in three years.
Luxury Fashion to Generate One-Third of Revenues in 2021
In 2012, the entire luxury goods market generated $213.7bn in revenue, revealed the Statista survey. In the next three years, this figure jumped by 17% to $250.8bn. The increasing trend continued in the following years, with revenues rising to $313.5bn in 2019.
However, the COVID-19 triggered a sharp fall, with the market value plunging by more than $28bn amid the lockdown. Nevertheless, statistics show the entire sector is set to witness double-digit growth in the following years, and hit $388bn value by 2025.
As the market’s largest segment, the luxury fashion is expected to generate $107.9bn in revenue in 2021, or one-third of total revenues this year. By 2023, this figure is forecast to jump by 14% to over $123bn.
With $82.9bn in revenue, prestige cosmetics and fragrances ranked as the second-largest segment of the luxury market. This sector is set to grow by 12.4% in the next three years and hit a $93.2bn value. Luxury watches and jewelry, leather goods, and luxury eyewear follow, with $59.3bn, $50.6bn, and $21.1bn in revenue in 2021.
Statistics also show brick-and-mortar stores still dominate global luxury goods sales. Only 11% of total consumer spending on luxury products in 2020 was made online. This figure is expected to rise to 14% by 2023.
The United States, China, and Japan Generate 45% of Total Revenues
Analyzed by geography, the United States represents the largest luxury market globally, expected to generate $71.9bn in revenue this year. Statistics show the US market is set to continue growing in the following years and hit a $79.2bn value by 2023.
With $44.6bn in revenue, China ranked as the second-largest market globally. This figure is forecast to hit $52.8bn in the next three years.
As the third-largest luxury market globally, Japan is expected to reach $30.5bn value this year and continue growing to $34.2bn by 2023. France and the United Kingdom follow, with $17.1bn and $13.9bn in revenue, respectively.
Statistics show the United States, China, and Japan generate 45% of combined revenues in the global luxury goods market.