African luxury resale buyers flock to Louis Vuitton
Luxity has just published the fifth edition of its State of the luxury market in Africa report, which points out that a key driver of the continent’s penchant for second-hand luxury is that demand continues to grow faster than supply, especially since many brands are not present here.
“This was demonstrated not only by the growth in average resale prices, but also by the percentage of their resale value compared to the retail price of items purchased new.
“For example, the resale value of Christian Dior products has increased from less than 45% in 2018 to just over 60% in 2022, with average prices rising from R9,000 to R15,000. This means that consumers are now willing to pay prices closer to new purchases,” says Zahariev.
He adds that with consumers willing to pay more for second-hand luxury items, this also indicates factors other than price, such as increased access, propelling African consumers into the second-hand luxury market. “The upsurge in omnichannel retailing on the continent in the wake of the pandemic, for example, has had a profound impact, with customers now having access to second-hand luxury retailers across multiple channels, including physical, in online and social.”
Main luxury brands in Africa
When it comes to top brands among Africans, the report reveals that Louis Vuitton again took the top spot for the fourth consecutive year, accounting for one in five searches, with Chanel and Gucci vying for second and third place. After being eliminated from the list last year, Christian Louboutin returns to fourth place, with Hermès returning to fifth place – narrowly making the list this year.
“It was an exceptional year for Louis Vuitton, which was able to place in the top three for resale value in four of the five categories considered in the report – bags, shoes, accessories and clothing, missing, not surprisingly, only watches. “, shares Zahariev. Overall, the resale value of Louis Vuitton has increased from 64% in 2021 to 67.8% in 2022.”
Louis Vuitton is also one of the most popular brands when it comes to web searches. Over the past year, Africans have watched it and Gucci more times than the rest of the top 10 most searched luxury brands combined. Additionally, this year, searches for second-hand luxury shoes surpassed bags for the first time in the report’s history.
According to Zahariev, “This indicates that consumers may be moving towards more accessible items, which is further supported by the third-place searches for clothing, despite only being introduced during the current reporting period. .”
Returns on investment
Since some second-hand luxury items are also an investment since their value generally appreciates over time, the report tracked the prices of some of the best investments over five years to gauge returns. Among pieces priced above R100,000, the Chanel Classic Medium Flap came out on top, yielding 111.5% over the five-year period. In contrast, the stalwart Birkin posted a modest 27.2% increase.
Louis Vuitton led the investment piece category with a lower price tag, with many discontinued styles posting a consistently strong year-over-year performance. The Louis Vuitton Favorite MM, for example, performed remarkably well with a return of 263%, driven by steadily rising prices and greater acceptance of second-hand goods in general over the period. Zahariev points out that gold, by comparison, has only returned 67.27% over the past five years.
He adds that for watches, Rolexes continue to offer the highest resale value compared to new purchases, averaging 82.65% of the current retail price. “By limiting the supply and access to rarer models, Rolex has been able to support the year-on-year growing demand for its products. trade at a premium of more than 100% over new.”
“Luxury brands continue to have strong appeal in the African market, with Louis Vuitton and Gucci having established themselves strongly. Used vehicles continue to grow in popularity, with prices and volumes increasing year on year with no signs of slowing down,” concludes Zahariev.