Global Powers of Luxury Goods 2021 has been saved
Global Powers of Luxury Goods 2021
The pandemic was the catalyst for change as luxury goods companies adopted new paradigms of value creation. As they seek new ways to connect with their customers, they are changing their approach and mindset by incorporating sustainability and digitalization into their long-term strategies, to align with consumers’ demands and new regulatory requirements.
Over the past year and a half, consumers and companies have been adapting to a new way of living and their outlook on luxury goods may be undergoing change. There is growing awareness of environmental concerns and the need for sustainability in how goods are produced and used. Luxury goods companies are responding positively by focusing more on sustainability in the design and production of luxury goods, and at the same time are accelerating the adoption of digital solutions to engage with consumers and deliver luxury shopping experiences using technology. Even though the industry is returning to live events and in-store sales, both sustainability and digitalization now feature more prominently in their strategies for the future.
The world’s Top 100 luxury goods companies generated revenues of US$252 billion in FY2020, down from US$281 billion in the previous year (a decrease of US$29 billion) which resulted from falls in all countries and all product sectors. Over 80% of the companies in the Top 100 reported lower luxury goods sales in FY2020, reflecting the adverse impact of the COVID-19 pandemic, with sales down due to store closures, travel bans, shifts in consumer demand, supply chain disruptions, and other factors. Despite the luxury goods sales growth for the Top 100 dropping by more than 20 percentage points year-on-year, the FY2020 composite net profit margin for the 81 Top 100 companies reporting net profits fell by only 5.7 percentage points, to 5.1%.
In addition to exploring the trends impacting the luxury goods market, the report identifies the 100 largest luxury goods companies based on publicly available data for FY2020 (which we define as financial years ending within the 12 months from 1 January to 31 December 2020) and evaluates their performance across geographies and product sectors. A new section in this year's report focuses on luxury e-commerce and looks at the key factors driving changing luxury e-commerce strategies, from business models, key players, partnerships, and notable changes in the business environment.