The Global Luxury Market Will Not Return To 2019 Until 2023.

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The epidemic has stagnated the luxury market, which has been growing rapidly for the past 10 years. Sales of high-end handbags, clothing and cosmetics in the world dropped by 25% in the first 3 months of this year, and will continue to decline from 4 to June. Bain expects to drop 20% to 35% in 2020, down by 15% to 35%.

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Bain said that by 2023, the revenue of the luxury market will return to 2019. In 2019, the total revenue of the luxury goods market was 281 billion euros.

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According to a April report by McKinsey, the luxury goods industry is expected to shrink by 35% to 39% this year. McKinsey said that if stores were closed for two consecutive months, about 80% of fashion listed companies in Europe and North America would "get into financial difficulties".

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Since March, China has gradually relaxed the ban on commercial activities. But luxury stores in Europe and the United States are not expected to be reopened until late May.

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Bain said that in the first 4 months of this year, sales of some of the better performing brands in China have increased year-on-year. Although the number of stores has been reduced by nearly half of that of the same period last year, people who have ventured out have produced more purchases and the average unit price has increased.

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China's recovery has boosted the global luxury market.

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Bain did not point out specific brands. But the LVMH group said that in the first few weeks of April, sales in mainland China increased by 50%, and Herm s also said that China's business grew dramatically.

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Hugo Boss (Hugo Bosse) said China and online sales showed signs of recovery. Hugo Boss announced a 17% drop in first quarter sales this week, with a second decline expected to exceed 50%.

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Bain partners Federica Levato said: "as long as customers go to stores, they have enough incentive to buy."

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In 2019, Chinese consumers contributed 35% of the world's luxury consumption. Bain predicted that in the next few years, the influence of Chinese consumers on the luxury goods industry will grow further, and by 2025, Chinese consumers will contribute nearly half of global luxury sales.

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Chinese consumers will buy more luxury goods in China.

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Because the global tourist market is not expected to return to normal level in the next two years, Chinese consumers who buy luxury goods abroad will mainly shop at home.

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The Chinese government has cut import tariffs and sales tax, which has weakened the competitive advantage of luxury shopping destinations such as London and New York. Hongkong has no longer been a popular destination for Chinese tourists after last month's social upheaval.

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Federica Levato said: "it is certain that the confidence of Chinese consumers will rebound faster." She added that consumer confidence in Asia will also rise faster than in Europe or the United States, which has been hit by recession.

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Federica Levato continued: "if luxury brands can provide customers with the same level of service and consumption experience in China, they may make up for the loss of Chinese tourists who no longer go shopping in Europe or the United States."