Editor’s Note
The latest industry data signals a pivotal shift in the luxury landscape for 2024. While the overall market is projected to contract slightly, the robust growth forecast for experiential luxury highlights a clear evolution in consumer priorities. This divergence underscores a move beyond material goods toward valued personal experiences.
According to the recently released Altagamma-Bain Worldwide Luxury Market Monitor 2024, the luxury sector is expected to slow down in 2024. The sector’s total sales are projected to decrease from €1.5 trillion (approximately 2,215.41 trillion KRW) in 2023 to €1.478 trillion (approximately 2,182.9173 trillion KRW) in 2024, representing a 2% decline at current exchange rates. In contrast, experiential luxury is expected to record a 5% increase in sales.
The personal luxury goods sector, led by beauty products, jewelry, and eyewear, is expected to record sales of €363 billion (approximately 536.1292 trillion KRW) in 2024. The luxury slowdown is primarily evident in Asia, with Japan and other countries maintaining levels similar to last year due to China’s deteriorating performance. Furthermore, the polarization in consumption between the generally solid high-end luxury segment and the clearly struggling aspirational luxury segment is becoming increasingly pronounced.
Matteo Lunelli, Chairman of the Italian luxury goods manufacturers’ association Altagamma, stated:
He added:
Altagamma also released consensus survey results partially confirming Bain & Co.’s research forecast, which expects the global luxury market’s sales and EBITDA to grow by 3% in 2025. An increase in Chinese tourists and a recovery in consumer confidence are expected to have a positive impact in the second half of the year. In Europe, sales in this sector are expected to grow by 2%.
The US market is expected to grow by 3.5%, although the likelihood of tariffs on European products is increasing due to new Trump policies. The Latin American market is expected to grow by 4%. Japan’s growth, which surged in 2024, is expected to slow to a 2% increase, while China’s growth is still estimated at 3% with an uncertain outlook. In contrast, the Middle Eastern market is expected to maintain its growth momentum with a 5% growth rate.
China’s ‘luxury shame’ phenomenon is expected to remain a variable in 2025, with the number of Chinese luxury consumers expected to increase by only 2%, lagging behind the expected 4.5% increase in US consumers. Across the Asia-Pacific region, consumer numbers are expected to increase by 3%, and in Japan by 1%. In Europe, the number of luxury consumers is expected to increase by a relatively modest 2%.
Cosmetics are expected to be the most dynamic luxury segment with a 6% growth rate. Jewelry is expected to continue improving, driven by demand as an investment asset, with sales projected to increase by 4.5%. Watch sector sales are expected to increase by 1%. Leather goods (2% increase) and footwear (1% increase) are also expected to see moderate growth. Apparel is expected to grow by 3%, with polarization deepening between luxury brands showing clear growth and other brands struggling.
Among sales channels, offline retail is expected to perform best with 5% growth. Online retail is expected to grow by 3%. In contrast, wholesale channels, encompassing both offline and digital, are expected to be completely stagnant.
According to the Altagamma-Bain & Company study, excluding the pandemic crisis, the luxury market appears to be slowing for the first time since the Great Recession. A key factor is the decline in luxury consumption by Generation Z. The Gen Z customer base has decreased by approximately 50 million over the past two years.
Bain & Company’s research indicates that consumers are increasingly shifting their spending towards travel, dining out, and events, prioritizing personal care and well-being over products. Notably, the resale market for items like jewelry, vintage clothing, and leather goods is also gaining momentum.
While luxury stores are suffering from decreased visitor numbers as consumers avoid full-price retail, outlet stores are seeing improved performance. E-tail is expected to normalize after the post-pandemic fluctuations subside.
While growth signals are emerging in the US, Japan is expected to lead the market thanks to favorable exchange rates. A sharp slowdown is expected in mainland China. Europe is expected to show stable growth rates. The situation in the Middle East is more complex, with regional tensions affecting tourist flows. In emerging markets like Latin America, India, Southeast Asia, and Africa, over 50 million additional upper-middle-class luxury consumers are expected by 2030.
Therefore, in 2025, the global luxury market is expected to see a moderate improvement, and it is projected to enter a long-term upward trajectory by 2030, capturing an increasingly broader consumer base.