luxury clothing and car market

Some luxury companies have posted record profits since the end of the pandemic. However, have all of them really benefited from the crisis?

The luxury market has faced many difficulties

It experienced almost 10 years of continuous growth until the 2020 health crisis. Predictions also counted on an expansion of +3.2% for the year in question. The indicators are positive for the sector as a whole (whether we are talking about luxury goods “Personal” luxury “Experience”, For 2020, overall luxury sales were down. Europe leads the most shrinking markets with almost 29%. It is followed by North America (-22%). Asian markets are also down 5%.

The luxury market is divided into two categories: “experiential” luxury (tourist resorts, cruises, hotels, wellness, gastronomy, restaurants, wine and spirits, designer furniture, automobiles, etc.) and luxury items and accessories. “Personal” (fashion, leather goods, jewelry, watches, perfumes, cosmetics, etc.). It is dominated by 10 companies, which account for almost half of the total sales of luxury goods. The French brand dominates the ranking of the world’s largest luxury companies. There are seven players holding the largest market share (23.5%). Among them we can mention LVMH, L’Oréal Luxe, Kering and Hermès which are in the top 11.

Luxury Clothing: A Growing Market

The global luxury apparel market is expected to grow at a CAGR of 4.02% during the forecast period (2022 – 2027). However, it should be noted that the shopping habits of consumers have changed fundamentally after the pandemic. we note a “Low consumer confidence in the industry and willingness to spend” As per the Index of Consumer Sentiment (ICS) report. At issue: A different way of understanding their financial situation.

The growth is driven by online shopping as well as offers, promotions and advertisements through social media. According to a study by Boston Consulting Group, 93% of luxury consumers use social networks. Furthermore, nearly half of luxury apparel buying decisions are influenced primarily by what consumers see or hear on offline and online platforms. Luxury clothing is on the rise in popularity among the generation.

Luxury Cars: A Huge Market

The luxury car market is segmented by vehicle type (hatchback, sedan and SUV), drive (electric or internal combustion engine) and geography (North America, Europe, Asia-Pacific and rest of the world). In 2021 it accounted for about US$ 440 billion. It is expected to grow rapidly to reach US$ 600 billion in 2027. Its CAGR is close to 5% for the forecast period (2022 – 2027) as per the Mordor Intelligence report.

Despite a good current recovery, the pandemic would have hit the sector hard on short-term sales. It has seen a decline in 2020 whether we are talking about sales or production. Several factors have contributed to the improvement in demand for luxury cars worldwide: increase in tangible luxury offers in cars, consumer desire for more SUVs and rising consumer incomes as well as the growing trend of electric luxury vehicles worldwide In.

The combustion engine segment dominates the market. However, this is expected to decline with the demand for sustainable and eco-friendly transport only increasing, especially electric vehicles. This is partly because governments are offering more incentives and subsidies. Note: China is the leading market with the highest number of new electric vehicle registrations in 2020.

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