COVID-19-related store closures and financial uncertainty may have caused concern and anxiety for most of us; however, the world’s luxury brands have been raking in big dollars. Most international luxury brands are posting significant growth as we sit at home spending our stimulus money, or is there another reason for the upward trend?
On top of the list of international brands is Gucci, with an estimated value of $17.63 USD billion in 2020. In second place is the almighty Louis Vuitton, who increased its growth from $13.57 billion USD in 2019 to $16.47 billion USD in 2020. These two giants are followed by Cartier, Chanel and Hermès, the latter only posting a value of a mere $11.90 billion in 2020. Whilst this is an extraordinary gain for all concerned, can the trend continue?
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To the future of Luxury sales, post-Coronavirus, all eyes have turned to China. Presently, China remains the third largest market for luxury goods behind America and Europe. Whilst world economies are faltering, it is predicted that the Chinese economy is looking up. High spending Chinese tourists – who before Covid made as much as two thirds of their purchases in cities like Paris, London, Rome, New York, and Los Angeles – are still spending their hard earned dollars but are now buying their luxury goods locally. This is not good news for these brands in traditional luxury hotspots, however if this trend continues and if the Chinese economy stays buoyant, it is predicted that by 2025 Chinese consumers will account for half of the world’s luxury goods spending, keeping these multi-nationals in high demand.
The good news for most of us is that with the ripple effect, as the market for new luxury goods grows, with its association of superior quality, prestige and exclusiveness, the secondary market grows with it. The buying trend in China will further the supply to the pre-owned luxury market globally and afford us the opportunity to purchase our own special pieces and continue their narrative with a new lease of life.
John D’Agata / Head of Luxury
March 2021