Demand for luxury products has risen in South Africa, even though the economic climate has not returned to pre-pandemic levels. Recently Luxity sold a Hermès Togo Birkin bag for R220,000 within two minutes of being listed, and we wanted to know why! Michael Zahariev co-founder of Luxity shared the 5 Factors that drive this kind of demand in SA:
- During the pandemic, we saw an increase in shoppers entering the luxury industry as well as an increase in the current customer base. This was driven by the limitations due to global lockdowns on leisurely activities. Retail was one of the first of the activities to be reintroduced as the lockdown eased. As we have seen economies reopened these new buying habits have now been formed in the consumers and the original customer bases we know, have been expanded, driving more sales.
- The introduction of the pre-owned market has led to an increase in demand for luxury overall.
The two main factors surrounding this are:
The pre-owned market has created greater access to luxury. Allowing a pathway for consumers to acquire their first luxury items and form their initial bonds with the industry.
Studies have shown that sellers of luxury items disproportionately reinvest this income back into more luxury items. The ability to resell your items in a safe and secure manner is leading to great demand for new goods as well as pre-owned goods. - The introduction of ‘buy now, pay later’, and increased access to luxury items online through new and pre-owned platforms have further expanded the potential market. We are seeing an increase in brands willing to partner with online department stores and retailers which traditionally they avoided.
- Brands are working to expand their appeal outside of their traditional customer. We now often see collaborations between luxury brands and streetwear brands allowing the brands to collectively access each other’s individual customers. The exclusivities and limited nature of these collections generally ensure that only the most loyal customers are attracted and engaged.
Notable collections like the Louis Vuitton x Supreme still fetch prices far above retail and are some of the most sought-after by avid collectors. - Using the power of local celebrities and micro influence brands have been able to increase their appeal in markets international typically not familiar with the heritage According to the Influencer Marketing Statistics for 2022, the market grew from $1.7 billion in 2016 to $9.7 billion in 2020. In 2021, it soared to $13.8 billion, indicating steady growth. This year, the market is projected to expand to a whopping $16.4 billion industry.
To get your fix of luxury items, be sure to visit Luxity.
