Most luxury brands feel that the negative impact of the outbreak will linger even after the lockdown is lifted, it said in the ‘Impact of Coronavirus on Luxury Industry’ study. “Around 79% of the respondents feel that customers are in a wait-and-watch mode since they are unsure of the likely turnout of events,” Luxury Connect said.
The market for luxury goods and services is set to contract 30-50% this year, consulting and advisory firm Luxury Connect said in a report, with high-end automobiles and premium real estate expected to bear the brunt because of the Covid-19 pandemic and its resultant economic crisis.
Beauty and skin care, as well as wines and spirits were the least impacted during the lockdown to stem the virus outbreak, it said.
“Around 55% of the respondents feel that conspicuous consumption will be replaced by conscious consumption. Majority of respondents believe that the pandemic is likely to alter the luxury consumer’s behaviour and 45% of them feel that this is perhaps going to be the biggest challenge for them to tackle,” said Abhay Gupta, CEO of Luxury Connect.
Most luxury brands feel that the negative impact of the outbreak will linger even after the lockdown is lifted, it said in the ‘Impact of Coronavirus on Luxury Industry’ study. “Around 79% of the respondents feel that customers are in a wait-and-watch mode since they are unsure of the likely turnout of events,” Luxury Connect said.
Sale of luxury real estate and products have stopped since the lockdown began, pushing companies to rethink their strategies.
We were gradually recovering in the residential segment for high value property but now there is delay in transactions. The market will remain volatile unless demand recoups,” said Bhaswar Paul, Founder, Urban Style Private, which deals in luxury real estate.
According to the study, most customers are concerned about the negative impact of the virus and are delaying high-end purchases. “Even after the lockdown, reopening business will take a long time. The impact will be around till 2021 spring-summer when business will start picking up,” said Dinaz Madhukar, EVP, DLF Luxury Retail & Hospitality, in a recent webinar.
The spread of the Covid-19 virus has shut down luxury manufacturing hubs globally.
All luxury stores are shut, their supply chains have been disrupted and consumer sentiment is negative, posing a challenge to the Indian luxury market.
