At the beginning of 2020, the luxury market in mainland China, Europe and the United States has performed strongly. After the outbreak of the new crown epidemic, large-scale blockade measures around the world and the suspension of tourism in the main market triggered a global depression, and the luxury industry fell into an unprecedented predicament, in which the European market recession intensified. Sales of luxury goods in Japan and the rest of Asia also fell, with consumer sentiment around the world remaining subdued.

Previous research conducted by Bain has shown that online channels for luxury goods have always been resilient, while traditional channels such as direct stores and department stores have encountered "Waterloo" in sales. In addition, due to the forced stop of global air travel, the loss of tourism retail channels is huge.

The total sales volume of all categories showed a downward trend, among which accessories category was the most resilient, while wristwatches declined the most due to the lack of online sales platform to make up for the losses caused by the closure of physical stores.

As consumers gradually return to normal life, the way of looking at the world changes. In view of the above situation, Bain suggests that the safety of the store is a necessary condition. If it can be combined with the magic of luxury experience: using creative ways to attract customers into the store, or increasing the opportunities for customers to contact products, it will become the key to the success of the brand.

Future outlook

Bain expects the global luxury market to return to 2019 levels in 2022 or 2023. At that time, the market will gradually resume its growth momentum. By 2025, the market size is expected to reach 320-330 billion euros.

From the perspective of regional market, the scale of luxury market in mainland China accounts for 11% of global market share in 2019, and is expected to rise to 28% by 2025.

Facing the unprecedented crisis, luxury companies must take active actions to create the future. Bain believes that the market growth of luxury goods will depend on the strategic response of the brand to the current crisis, as well as the ability to carry out industry change around consumers. Disruptive challenges come from all aspects of the market: from development to distribution, from marketing to supply chain, and key end consumer interactions. The brand needs to re plan and deploy the above links to adapt to the post epidemic "new era"