Listen to the audio version of the article
The twenty-second Altagamma Observatory illustrated and commented on the positive trend of the global market for personal luxury goods, which is growing in 2023, with an estimated turnover of approximately 362 billion euros by the end of the year, an increase of 4 % on 2022 at current exchange rates (in the photo, the Dolce&Gabbana fashion show from the autumn-winter 2023-23 collection). Uncertainties remain regarding the last quarter considering the variables relating to consumer confidence, currently fragile, macroeconomic tensions in China, the conflict between Israel and Gaza, the poor signs of recovery in the United States and, for Europe, an increase of interest rates and inflation that is still high (although progressively normalising). These are the data from the Altagamma-Bain Worldwide Luxury Market Monitor 2023, presented in Milan by Claudia D’Arpizio and Federica Levato, senior partners of Bain & Company.
Financial analysts’ forecasts
The same elements of uncertainty that will shape the 2024 scenario, which the Altagamma Consensus estimates in a growth in company margins of approximately +4%. The estimates for 2024 and the evidence on the market trend emerged from the index, presented by Stefania Lazzaroni, general director of Altagamma, and created with the support of the most important financial analysts.
The differences between markets
In Europe, international tourists will offset the weaker domestic demand and will have a positive impact on the market, growing by 4%. Chinese tourists, thanks to the unblocking of visas and the complete resumption of travel, are returning to European cities. Slowdown in growth in the USA to +2.5%, due to the effects of inflation and the traditional uncertainties of the Election Year while for Latin America a +3% is estimated with Mexico benefiting from exports due to the exchange rate favorable. Positive growth in Japan continues (+6%), driven by local and Chinese demand. It is the country that best appreciates luxury products and benefits from the growth of tourism. In China, growth of 8% is estimated, lower than in previous years, due to lower demand from the middle-upper class who are more cautious in expenses and for the “daigou” threat, i.e. the purchase of luxury goods on external markets with resale on the domestic market at lower prices.
Product categories
2023 saw growth in sales, especially in terms of value, due to significant increases in the prices of luxury products. In 2024 the estimated increase in sales will be primarily volume-based. As for accessories, they are the best in class and continue their positive trend: +6.5% for leather goods and +5% for footwear. Entry price products suffer and demand is weaker for aspirational products. Cosmetics (+5%) is driven by skin care, make-up and niche perfumes, especially in the United States. India is among the markets with the most potential for this product category. For clothing, growth of 4% is estimated with the recovery of less casual clothing. It is the category that is most affected by the decrease in spending by consumers who prefer to purchase experiential luxury. It may suffer possible impacts related to global climate change. The positive trend of jewelery continues, with a +5.5%: jewelery remains a safe haven and investment asset. Growth of watches was stable (+3.5%), continuing to strengthen the search for unique pieces.