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New York, NY--The worldwide luxury goods market could grow by 5% to 12% in 2023, as per a spring luxury study by Bain & Company and Altagamma, following a "record" performance in 2022. This growth is forecasted despite the currently uncertain economic climate, with the market expected to more than double its 2020 size, reaching €530-570 billion ($625-$671 billion) by 2030.

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According to a report published by Israeli Diamond Industry, while economic uncertainties seem to slow luxury spending in the United States, Europe is experiencing a surge, credited largely to increased tourism. However, this trend could shift later in 2023. The research underscores watches and jewelry as the top performers, with consumers favoring "less but better" high-quality products.

Medium-term challenges for the industry include ESG regulatory pressures and the influence of generative AI and new technologies on the entire value chain.

The report noted that the personal luxury goods market set a record in 2022, achieving a market value of €345 billion ($377 billion), with positive momentum extending into Q1 2023, showing a 9-11% growth rate compared to 2022. Nevertheless, growth variations were noted across different countries. Factors such as decreasing hyperinflation, Europe's recovering consumer confidence, China's market reopening, and positive momentum in Japan and Southeast Asia contributed to the Q1 2023 growth.

The trend of consumers seeking high-end, iconic luxury pieces continues, leading to growth in categories like watches, jewelry, and iconic bags. Experiential and travel retail channels and monobrand and direct retail segments are regaining traction.

As per the report, projections for 2023 predict the luxury market value to reach €360-380 billion ($393-$415 billion), indicating growth from the previous year. Two scenarios suggest sales growth between 9% and 12% in a positive outlook and 5% to 8% in a more realistic forecast. The study also anticipates considerable personal luxury goods market growth by 2030.

In the report, Claudia D’Arpizio, a partner at Bain & Company, underlined the need for brands to concentrate on consumers, balance geographical exposure, deliver high-value propositions, and prioritize iconic, timeless pieces to thrive in the shifting luxury market.

Learn more in the entire Israeli Diamond Industry report.