As the luxury goods market grows, so does the used luxury goods market. Luxury companies are trying to eradicate the used market, but as consumers’ interest in used luxury goods grows, prices traded in the used market are also affecting the price of new products. Over the past four years, the total sales of luxury handbags, clothes, watches, and jewelry have grown to $1.3 trillion, and with the advent of the luxury used market, millions of people are selling and cashing in the luxury goods they purchased.
According to Bain & Company, in 2023 alone, used luxury goods worth 45 billion euros were sold worldwide, which has roughly doubled in four years. This is about 12% of the overall luxury market.
As the used luxury goods market has grown, luxury goods companies have no choice but to pay attention to this market. This is because fake products can be sold disguised as real products on used sites, and consumers can easily determine whether luxury goods are worthwhile or not by second-hand prices. Contrary to the perception that second-hand prices are lower than sales prices in general, second-hand prices may be higher than sales prices depending on the value of luxury brands held by consumers. The representative brand is Hermes. Second-hand Hermes handbags sell at a 25% higher price than new handbags. Rare designs fetch a higher premium. For example, the basic Hermes ‘Burkin25 ′ model is $10,000 for a new product, but second-hand prices sell for more than $24,000. This is because Hermes is considered a rare product due to its small production policy. The same goes for Swiss watch brands Rolex and Patek Philippe. The used watches of the two brands are sold at 20% and 39% higher prices than new products, respectively. In some cases, second-hand prices have risen while refurbishing the brand. The used price of Salvatore Ferragamo, an Italian luxury brand, has soared over the past year. “The market is the result of positive evaluation of Ferragamo’s brand improvement policy,” it said.
Of course, most second-hand luxury goods are sold at lower prices than new ones. Used Louis Vuitton handbags are sold at 40% below the sale price, while used Christian Dior bags are also sold at half the price of new products. Used prices of Burberry products also fall by an average of 17%. Over the past year, Gucci, Balenciaga, and Botena Veneta used prices have also fallen by 10%, 14%, and 23%, respectively.
EJ SONG
ASIA JOURNAL
