The South African luxury second-hand market is experiencing substantial growth, particularly in the jewellery and watch sectors. This increase, driven by investment potential and a preference for unique or vintage items, has been highlighted by data from Luxity, a boutique specialising in pre-owned high-end goods.
Market Growth and Investment Appeal
Luxity, which has stores in Nelson Mandela Square, V&A Waterfront, Gateway Theatre of Shopping, and Menlyn Maine, reported a 32% increase in watch and jewellery sales over the past year. Michael Zahariev, Luxity’s co-founder, attributes this trend to the rising recognition of luxury items as investment pieces. He noted, “What we are seeing is that these are investment pieces. A lot of the time you get a return on investment, and people are starting to pick up on this trend.”
Resale Value of Luxury Brands
According to Luxity’s State of the Luxury Market in Africa report, iconic brands like Rolex and Cartier have impressive resale values of 97.6% and 74.6%, respectively. These high retention values indicate strong market demand for these brands. The report also mentioned, “Louis Vuitton and Chanel, traditionally formidable players, experienced a mild shake-up this year. Their resale values declined by 1.9% and 0.9% respectively. While such a shift might appear subtle on the surface, this could signify the market’s inability to keep up with the brisk pace of price increases — a phenomenon particularly pronounced in these two brands.”
Market Dynamics and Brand Performance
The second-hand market for luxury watches is also experiencing some volatility. Johann Rupert, who oversees Swiss luxury goods group Richemont, expressed concerns about inflated prices in this market. He cited an example where a watch priced at €34,000 was sold for €89,000 at auction shortly after its release. Richemont, which owns brands like Cartier and Van Cleef & Arpels, has taken steps to address market issues by acquiring Watchfinder and launching Enquirus, a digital platform to authenticate pre-owned sales and combat theft.
Broader Market Trends
The popularity of pre-owned luxury watches is part of a broader trend identified by Boston Consulting Group (BCG). Their 2023 data reveals that luxury watches are increasingly seen as alternative investments, with prices for top models from Rolex, Patek Philippe, and Audemars Piguet growing at an annual rate of 20% from 2018 to 2023. In 2021, pre-owned watch sales reached $22 billion, accounting for nearly a third of the $75 billion luxury watch market.
Implications for Jewellers
For professional jewellers, these trends indicate a strong market for pre-owned luxury items, offering opportunities to serve a growing customer base interested in investment pieces. The high resale values and demand for authentication services underscore the importance of maintaining brand integrity and ensuring authenticity. Jewellers who adapt to these trends by offering a mix of new and pre-owned items and providing authentication services may improve their market position.
