Pandemic a boon for some luxury segments? Here’s what Gaurav Bhatia has to say
Luxury apparel resale business witnessed an unprecedented rise amid the pandemic
The covid-19 pandemic has altered how we humans behave in several ways. If we talk about the luxury market, which involves products made from the finest material and are priced at the top of the market, the overall industry has witnessed an unusual drop in sales. As soon as the deadly virus was spreading in China, followed by several parts of the world, the companies found it difficult to maintain their supply chains as lockdowns were imposed forcing factories and market shuts.
Amidst all this “some of the segments of the luxury industry were flourishing and this has a lot to do with the behavioral changes amongst the consumers,” says Gaurav Bhatia ex LVMH, MD, Maison India.
“Before the outbreak of the pandemic, the industry was already becoming digital. With the spread of Covid-19, the internet became the growth engine for the sales in luxury,” he says.
At present, the overall luxury market has started to revive after months of turmoil. Irrespective of the size of the players in the industry, the pandemic has forced them to adopt changes to survive harsh market realities. However, unlike the luxury sector at large, some segments found Covid-19 to be a boon as the sales quadrupled. One such newly emerged business model is the resale of luxury apparel and accessories which gained traction amid the pandemic.
“You can call it pre-loved or re-commerce, the market was swallowing even before the spread of the virus as it was expected to cross the $50 billion mark by 2023. Although we don’t have statistics available at present, I assume that the industry might have already crossed the number by the end of 2020,” says Gaurav Bhatia.
When there was a serious shortage of new products in the market, the apparel resale market grew multi-fold globally. “Several leading firms that avail online transaction of such apparels have witnessed a boom now. In short, the pandemic has changed the trend.”
Will a sharing economy ever be a trend among the real rich as is seen in today’s millennials remains to be seen. “Consumers warming up to preowned luxury. What’s not to love in last season’s Vuitton confections? Or find a vintage Chanel 2.55 from the 1950s? And since many can’t get the Birkin this is perhaps the only way to actually own one without being a telecom magnate, movie star or Miss Birkin herself.
The luxury consumer today gets how fiscally sound buying pre-owned is and isn’t shy to flash it. A trend started by little vintage shops and democratized by eBay is now big business. The market leader, online retailer of pre-owned luxury The RealReal went public earlier this year with a valuation of $700 million. Closer home, Luxepolis, India’s pioneering online marketplace for preowned and brand new luxury remains the most trusted source for authentic, certified and a tightly curated range of brands from Hermès and Chanel to Louis Vuitton and Goyard and everything in-between. Patek Phillipe and Rolex watches are sold within minutes of hitting the site. I bought a pre-owned 1960s gold Datejust Rolex from Luxepolis. Sweet.” says Bhatia.
“This has also attracted the first-time luxury consumers especially the millennials. With the absence of data, it will not be safe to assume that most of such buyers are first-timers, but many of them will belong to such category which indicates a bright future of the luxury worldwide,” says Gaurav Bhatia.
On the one hand, the pandemic has crumbled the industry, on the other, “It allowed the first-timers to taste the best of the products at a lower cost and change might become a catalyst of change in the future in luxury,” he adds.
Gaurav Bhatia is a seasoned luxury market analyst and has worked for some of the leading global brands including LVHM Moët Hennessy and Sotheby’s. He is also the founder of Mumbai-based Maison India.