Altagamma Bain Luxury Market Monitor 2009

The 2009 Bain & Company Luxury Goods Worldwide Market Study indicates a downturn in the luxury market for the first time, with a 2% decline in 2008 and an 8% drop forecasted for 2009​​. This contraction was due to lower consumer confidence, aging consumer bases in consolidated markets, and credit shortages in emerging markets​​. Luxury goods experienced deflation with aggressive markdowns and a shift towards entry price items​​. Online shopping grew, fueled by younger consumers and “luxury shame”​​.

Asia Pacific, led by China, showed strong growth, contrasting with the continued softness in mature markets like Japan and the Americas​​. Hard luxury items faced postponements and destocking, while apparel shifted towards premium and fast-fashion brands. Cosmetics were impacted by “masstige” competition, but accessories remained resilient​​.

Consumer behavior shifted towards frugality, inconspicuous consumption, and value-seeking, with a focus on evergreen and quality items over extravagant spending​​. Long-term trends include consumer conscience, polarization of consumption, and luxury shame, while others like technology dependence and luxury market enlargement are emerging trends​​.

The study forecasts timid growth in 2010, with a more robust recovery expected in 2011-2012, aligning with global GDP trend.

Source: Altagamma Bain