What is the status of the luxury market and digital in this Covidised 2021 world? A little more than three years ago, Philippe Jourdan, one of the world’s leading marketing experts regarding the luxury market, told me that the role of digital in the luxury market was not as significant as one may have thought. I interviewed him a few weeks ago in order to better understand the current situation and assess how much it had changed under the pandemic. Let’s see what has happened in the past three years and more particularly in 2020-2021. Namely, with regard to the unstoppable rise of China in the luxury market. Above all, according to Philippe, attitudes regarding the online purchase of luxury products have changed dramatically during this crisis. All this might well end up alter consumers’ behaviours forever.
2021 luxury market update : it’s all about digital and China

What has happened in the past three years in the world of luxury?
As I was expecting, we have witnessed the quickening pace of trends I had already uncovered years ago. The first trend in the global market is obviously the growing share of the Asian market.
The Chinese market is now the world’s largest market for luxury goods
China’s market share is around 30%, depending on the sectors and product categories involved
This is more than the US, more than Europe, and has obviously been boosted for some time by the growth of Chinese tourism around the world.
We predicted this trend three years ago, and we have been proven right.
Luxury 2021: the prominent role played by digital
In addition, there has been a change in the distribution channels mix, with the growing share taken by digital.
Digital was initially used with great caution. In 2017, the share of e-commerce was between 8 and 12%.
Things have now changed dramatically.
Luxury has probably been lagging behind, which is not surprising, as luxury brands are meant to be marketed in their own stores as well as they encourage face-to-face contact with customers.
We’re talking about products that people like to touch and try, and about a business model whereby the brand seeks to attract its customers and bring them to where it has invested the most, i.e. in those ubiquitous flagship stores, all over the world.
The versatility of e-commerce in luxury
Initially, luxury was more prone to resort to the web-to-store* business model: one presented products on the Internet, with the aim of bringing customers into one’s stores.
Then, brands became aware of the alternative store-to-web* business model. A model whereby people who came to the shop, then went on to continue their product search on the Internet.
The Chinese have set the pace, because there is a continuum from digital shopping to in-store shopping over there. Web-to-store and store-to-web are the two inseparable parts of e-commerce.
Plain vanilla e-commerce also exists in luxury: people buy online what they have seen in the store or on the website.
Initially, brands considered the Internet as an incredible sounding board for demonstrating their collections, their fashion shows and their know-how.
Today, barring a few exceptions, luxury brands have all really taken to e-commerce
They have even gone a little too far at times. If they started out with e-commerce sales on their own websites, today they are marketing their products online, in partnership with online marketplaces.
Marketplaces are and will continue to be the go-to places for online shopping in China, even after the pandemic is over
These marketplaces are sometimes luxury digital subsidiaries of Chinese e-commerce giants, such as Alibaba.