COVID-19 Pandemic: Surging Purchase of Essential Items to Affect Growth Negatively
The COVID-19 pandemic has taken a huge toll on the global economy. The demand for luxury goods declined amid the crisis because of the inclination of people toward purchasing only essential products. Working groups have faced reduction in their salaries and loss of employment. At the same time, stay-at-home orders have drastically lowered the demand for premium goods. We are offering detailed research reports to help you gain a competitive edge
Increasing Demand from High-income Groups to Favor Growth
Luxury goods are mainly purchased by the high-income group across the globe. Oxfam International’s data, for instance, declared in January 2020 that approximately 2,153 billionaires residing worldwide possess more wealth than around 4.6 billion people who make up 60% of the global population. Hence, the increasing wealthy population would bolster the luxury goods market growth in the near future. However, the trends of selling and buying counterfeit products at cheaper rates that resemble original ones may hamper growth.
The global luxury goods market is set to gain traction from the introduction of fashion-forward and innovatively created products. This information is given by Fortune Business Insights™ in a new report, titled, “Luxury Goods Market Size, Share & COVID-19 Impact Analysis, By Product Type (Watches & Jewelry, Perfumes & Cosmetics, Clothing, Bags/Purses, and Others), End-user (Women and Men), Distribution Channel (Offline and Online), and Regional Forecast, 2020-2027.” The report further states that the market size was USD 316.16 billion in 2019. It is projected to grow from USD 257.26 billion in 2020 to USD 352.84 billion in 2027 at a CAGR of 4.6% in the forecast period.
Clothing Segment to Remain at the Forefront Backed by High Demand from Men & Women
Based on the product type, the clothing segment generated 28.79% in terms of the luxury goods market share in 2019. This growth is attributable to the increasing demand for men and women globally. The bags segment is anticipated to exhibit rapid growth in the upcoming years stoked by the high demand for leather-based products.
Rising Disposable Incomes to Drive Growth in Asia Pacific
Geographically, Europe earned USD 103.86 billion in 2019 in terms of revenue. It is likely to lead the market throughout the forthcoming years because of the presence of numerous manufacturers in the region, such as Burberry, LVMH, and L’Oréal. In North America, the presence of many rich people in the U.S. would accelerate growth. The market in Asia Pacific is likely to grow at a fast pace fueled by the high disposable incomes of people. Besides, the increasing number of working women in the region would propel growth.
Key Players Aim to Compete with Rivals by Launching Unique Products & Merging with Others
The global market for luxury goods houses a large number of companies that are mainly aiming to strengthen their positions worldwide. To do so, they are adopting the merger and acquisition strategy. Also, some of the others are introducing novel luxury brands to attract more customers. Below are the two latest industry developments:
- October 2020: Ralph Lauren, a leading provider of digital-first customization, included the packable quilted jacket, its best-selling outerwear piece, in collection. Its exterior is made up of recycled down-alternative insulation, polyester fabrics, and recycled nylon. The company aims to bring 100% sustainability till 2025.
- October 2020: LVMH Moët Hennessy Louis Vuitton SA (LVMH) concluded an agreement with Tiffany & Co. to refine a few terms of their previously accepted merger agreement, showcasing a purchase of 131.50 dollars per share.
A list of all the renowned luxury goods manufacturers operating in the global market:
- LVMH Moët Hennessy-Louis Vuitton SA (Paris, France)
- Compagnie Financière Richemont SA (Geneva, Switzerland)
- Kering SA (Paris, France)
- Chow Tai Fook Jewellery Group Limited (Central, Hong Kong)
- The Estée Lauder Companies Inc. (New York, U.S.)
- Luxottica Group SpA (Milan, Italy)
- The Swatch Group Ltd. (Biel / Bienne, Switzerland)
- L’Oréal Group (Clichy, France)
- Ralph Lauren Corporation (New York, U.S.)
- Shiseido Company, Limited (Tokyo, Japan)
Author’s Bio –
Name: Reeti Banerjee
Reeti Banerjee is currently working as a content writer in a prominent market research firm named Fortune Business Insights™. She specializes in writing articles, press releases, blogs, and news reports. She believes in maintaining simplicity throughout her content to provide the clients with a seamless reading experience.