The global luxury market was worth €920 billion in 2018, and is expected to grow at an average annual rate of 4.6 percent until 2025. Millennials are expected to bring 130 percent of 2018-25 market growth, growing from 32 percent to 50 percent of the personal luxury market in that timeframe. In terms of nationality, 75 percent of the 2018-25 market growth is expected to come from Chinese luxury consumers, whose share of the global luxury market is predicted to increase from 35 percent to 40 percent. These data are drawn from the 6th edition of the report “True Luxury Global Consumer Insight,” presented by Boston Consulting Group (BCG) and Altagamma in Milan on April 17.

Generation Z, the demographic cohort after the millennials, currently account only for 4 percent of the luxury market, but the authors of the report drew attention to the need for luxury brands to carefully monitor and understand them. Generation Z represents future potential consumers, and this age group features a unique set of behaviors and values, which the luxury industry should be better able to grasp, said researchers.

Second-hand luxury reached 7 percent of personal luxury market value in 2018, and is growing by 12 percent per year, faster than overall personal luxury. Handbags accounted for 40 percent of second-hand luxury sales in 2018, followed by clothing at 16 percent, small leather goods at 13 percent, watches at 10 percent, shoes at 9 percent, accessories at 7 percent, and jewelry at 4 percent. The vast majority of second-hand market participants (80 percent) use online channels to be informed and to trade, and this element helps explain the success of second-hand trade. According to researchers, the constant flux of styles that consumers view through social media pushes them to shorter ownership. The second-hand market also offers lower purchase prices, as well as a complementary income opportunity for sellers.

Also on the rise is the consumer's interest in sustainability issues related to their luxury purchases. Sustainability issues influence the purchase behavior of 59 percent of luxury consumers, with environmental, animal and ethical manufacturing at the top of their concerns. Second-hand luxury purchases and sustainability are interconnected, with 17 percent declaring that they bought pre-owned luxury items because it is “a truly sustainable behavior.”

Special editions, realized through collaborations of different brands and artists, are also mentioned in the report as one of the most successful and fastest-rising trends. According to the report, half of luxury consumers have already purchased special editions, again driven by younger generations and Chinese consumers. The figure stands at 67 percent for Gen Z, 60 percent for millennials and 62 percent for Chinese consumers. Handbags and sneakers dominate collaborations and special edition purchases, with 47 percent and 33 percent of purchases, respectively.

Among the rising trends is a casual approach to social and professional occasions, which now affect 74 percent of luxury consumers. According to the authors of the report, this trend is expected to grow further, driven by sneakers and jeans.

Finally, Italy topped the country “made-in” ranking in 2018, when the participants in the survey were asked about the country of manufacturing that they considered the best for luxury brands. Italy was chosen by 29 percent of respondents, followed by France at 21 percent and the U.S. at 12 percent.

The 6th edition of the BCG-Altagamma “True-Luxury Global Consumer Insight report” is based on a survey of more than 12,000 respondents in the 10 largest worldwide luxury markets – Brazil, China, France, Germany, Italy, Japan, Russia, South Korea, U.K. and U.S. – which cover about 85 percent of total luxury sales value.