Colliers: Global Luxury Retail Outlook Report 2022

After the epidemic, luxury goods rebounded quickly.

In 2020, the global luxury fashion market fell 12.6% year-on-year, equivalent to $28 billion, as store closures and reduced international travel during lockdown severely affected demand.

However, the market quickly rebounded as travel and social activities resumed and consumers were eager to invest in new clothing and accessories. In 2021, sales exceeded 2020 and 2019 levels.

The United States has the highest income, but its growth rate is not the fastest.

Driven by a strong economy and demand generated by an affluent customer base, the United States remains the largest luxury market, with luxury sales reaching $63.3 billion in 2021. In 2019, Americans spent more on luxury goods than China, Italy, and Japan combined. Moreover, the United States is expected to maintain this level of spending through the end of 2022.

The fastest growing countries are from Asia. The instability of the past few years has made the United States a strong rival to Chinese consumers' luxury spending. But China is still the leader in growth and is expected to become the world's largest luxury market by 2025.

Mergers, partnerships and acquisitions.

Globalization has made it necessary for brands to expand outside of their traditional markets. Emerging markets in the Asia-Pacific region, including China and India, offer untapped opportunities for brands with roots in the West.

Given the difficulty of transformation for luxury brands today, the outlook for independent luxury brands is bleak. Holding companies representing some of the largest brands benefit from deep pockets and a sophisticated customer base, and can invest in promotional, technical and design capabilities that luxury boutique brands cannot afford. In addition, in a survival of the fittest scenario, brands are poised to take off, so investing in expanding infrastructure and distribution networks is extremely important.

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