In the latest episode of Marketplace Africa, CNN’s Zain Asher explores South Africa’s pre-owned luxury boom. Despite fears of a looming recession, luxury sales worldwide have consistently grown in recent years. Dion Chang, founder of Flux Trends explains, “I think the world has shifted fundamentally during the pandemic and I think you’ve seen all of these new concepts and luxury brands having to have a real hard look at a business model and say, what do we do and what is the reality of that.”
Luxury spending, traditionally a pursuit of the rich, is being reshaped by a new generation. Rodger George, Consumer Industry Leader at Deloitte Africa talks about this shift, “The younger, more upwardly mobile people are tending to choose where they spend money differently. The ability of being able to buy luxury online, to being able to trade, to authenticate and validate the value of that puts it into a different realm.”
Some experts believe there is a trend driving a rapidly accelerating sector of the luxury market, pre-owned luxury. Chang says, “Even luxury brands have started a repair service. So, it’s not just dispose of it, you give it handed over to the next generation, or you have a rental or resale. And that was never part of a luxury brands business model. So, there’s a definite mind shift that’s happening all over the world.”
For South African pre-owned luxury retailer Luxity, business is booming. With a focus on pre-owned handbags, shoes, watches, jewellery and clothing, co-founders Michael Zahariev and Luke Calitz realised that shoppers want to be sure they’re buying a genuine product.
“We’re constantly developing new technologies, methods and systems to stay one step ahead of the counterfeiters. At Luxity we have in-house authenticators as well as external consultants which consult on every single item that we sell, and on top of that we offer 100% lifetime guarantee on the authenticity of your item,” says Zahariev.
Zahariev describes another key driver of Luxity’s success, which is rarely seen in the luxury retail space, “One of the first things we noticed is that many Africans don’t have the full amount to pay upfront. What we offer them is a payment plan over 60 days interest free, where they can pay off an item in as many instalments as they like”.
Chang talks about the popularity of pre-owned luxury, “What’s driving a concept like Luxity is that alure of maybe vintage, but it is also being pragmatic and saying, okay I’m not going to possibly afford a new item, but I still want that, and if it’s been verified, which they do, then at least I can, I can take ownership of that.”
While the Northern Hemisphere is where big spenders traditionally are, strategists like Belinda Clur, Managing Director of Clur International, say that big money is moving south. She tells CNN, “What is interesting to see now is that a two-way street has actually developed. So, no longer is it a case of the rest of the world importing luxury into Africa, where there’s clear demand, but we now also see that luxury items from Africa and produced in Africa, are being exported, with good demand to the rest of the world.”