A recent study by McKinsey & Company predicts a period of moderate growth for the global luxury market from 2024 to 2027. The report, titled State of Luxury: Fashion, forecasts annual growth rates between 1 per cent and 3 per cent, a significant slowdown compared to the 5 per cent average annual growth observed between 2019 and 2023.
While the US is projected to lead in luxury spending, growth will be driven more by volume increases than price hikes, a shift from recent years. Jewellery and leather goods are expected to see the strongest growth, while ultra-high-net-worth individuals remain key drivers, despite expressing a desire to spend less on personal goods.
The report highlights concerns among consumers about declining in-store experiences, a desire for greater transparency, and the potential impact of rapid trend cycles on brand identity. Resale of luxury goods is gaining traction at present, driven by a desire for unique and affordable items, but concerns about authenticity and reliability persist.
Furthermore, the US is projected to lead global luxury market growth from 2025 to 2027, with an anticipated growth rate of 4 per cent to 6 per cent. In comparison, China is expected to see growth between 3 per cent and 5 per cent, while Europe and the rest of the world are forecast to experience growth between 2 per cent and 4 per cent.
