Global market research company Euromonitor International predicts the luxury goods industry will be hit the hardest in 2020, across all FMCG markets, due to coronavirus (COVID-19).
According to the webinar ‘Luxury and COVID-19: Effects on the Industry’ the global luxury goods market was set to grow by 3% in 2020 to reach over US$1 trillion. However, due to the global disruption caused by COVID-19, the industry is set to decline by 18% in Q2 2020.
“Luxury shopping behaviour, channel dynamics and travel plans are seeing inevitable shifts as a result of lockdown,” said Fflur Roberts, head of luxury goods research at Euromonitor International.
“With the pandemic having a huge economic and psychological impact, consumers’ sentiment will be severely dampened and premium-priced items likely to be affected.”
The market most impacted is the Asia Pacific, with sales in China set to decline by 22% in 2020, amounting to a $68 billion loss. Followed by the US, with a US$52 billion loss in sales in 2020; whilst Italy, France and the UK remain bleak, as they play an integral role, as both key producers and luxury-buying hotspots for wealthy global tourists.
Roberts concludes, “The luxury goods market will most likely bounce back relatively quickly in the medium term, with the surge in e-commerce shopping and the convenience of online shopping converting prior sceptics.”