LVMH’s marketing and selling spend has exceeded pre-pandemic levels, according to the company’s latest reports.
The luxury group spent €22.3bn in marketing and selling, a 32.8% increase from 2020 and 10.4% above their pre-pandemic level of marketing investment in 2019.
However, marketing spend as a share of revenue has fallen to a recent low, at 34.7%. This is down 2.9 percentage points (pp) from 2020 and down 1.1pp from 2012.
This shows that LVMH’s revenue is growing faster than its marketing spend. Fashion & leather goods, in particular, stand out as the fastest-growing business group, with sales being 42% above 2019’s level.
Bernard Arnault, Chairman and CEO of LVMH, commented: “LVMH enjoyed a remarkable performance in 2021 against the backdrop of a gradual recovery from the health crisis” and that “Despite the uncertainties that remain at the start of this new year, which continues to be disrupted by health concerns, we approach 2022 with confidence and are convinced that LVMH is in an excellent position to further strengthen its lead in the global luxury market.”
Asia Pacific is a key market for the company and is expected to generate almost two-thirds of global revenue by 2025.
Further research shows that luxury goods sales reached a new high of €283bn worldwide in 2021, largely driven by younger customers. Luxury brands that want to tap into this growth need to focus on sustainability and digital engagement, while also building omnichannel experiences for customers.
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