China observer Xia Yifan told The Epoch Times on Aug. 5 that Chinese consumers, including the wealthy, are reluctant to buy luxury items because they don’t have enough money and even have to sell their luxury goods to maintain their living standards.
Overall, economic depression and the impact of repeated “zero-COVID” measures have slowed growth in many cities across China, he said.
“Small and medium-sized enterprises are closing down one after another, while local governments are indifferent to it,” said Xia. He added that for Communist Party officials, carrying out Beijing’s political orders may be more important than focusing on people’s livelihoods and the economy, not to mention their inability to solve the problem.
Due to the lack of financial security, many Chinese are pessimistic and are looking for their way out, with some planning to emigrate to foreign countries and others disposing of their assets so they have more cash on hand, Xia said.
An influential luxury appraiser surnamed Tian told Chinese news media Shanghai Hotline on Aug. 2 that many clients recently contacted him to sell their luxury bags, which they had bought from him, at a discounted price.
According to Tian, the Hermes Himalaya luxury bag, which was once speculated at a skyrocketing price of nearly 1.5 million yuan (about $220,000) in the past two years, shrank at least 10 percent in value. Luxury watch brand Patek Philippe also saw prices dive in the secondary market.
A female client in Hangzhou, a crucial e-commerce hub in China, sold Tian more than 10 Hermes bags for quick cash. Some of these bags were bought from Tian last year.
She desperately needed the money to support her husband’s struggling company, and “cash flow was pretty tight,” she told Tian.
Tian said that most of the handbags he recovered were not from retailers but his friends’ closed-down stores.
“Since the first half of the year, many secondhand luxury goods stores have fewer customers, and goods sold online are backlogged in the courier. Hoarded goods remain hoarded, and the capital chain is broken,” he said.
Li Yi from the luxury industry has also recovered many large luxury items this year. Earlier in April, she received nearly 30 messages from customers wanting to sell their designer handbags, according to Shanghai Hotline.
Li’s store is in an office building near Xiangcheng, a financial district in Hangzhou city.
“One time, a man brought in 3-million-yuan (about $440,000) worth of luxury goods, including watches, bags, and some jewelry,” she said.
The luxury brands will be hard to sell this year, Li said. “People have no money to spend because of the impact of the ongoing pandemic measures.”
China’s COVID lockdown policies resulted in supply chain disruptions, affecting luxury sales and foreign trade lines.
“This is just the beginning, and it will get worse in the future,” Xia said, pointing to the current state of the country’s economy and people’s livelihoods.