The crisis engulfing the Chinese economy now coupled with repeated pandemic prevention and control has hit all industries severely including the luxury brand sector. Luxury stores and their derivative second-hand ones are closing. People are selling their luxury goods amid the cash crunch.
Tian Ge, a famous online luxury appraiser, said that many people have asked for his help to resell their brand name bags at a discount. This year he received 6 Hermès Himalayan bags, which sold on average for $220,000 in 2020, now at 10% off. Two were sold and there would be more. He added, not from retail consumers but from his business partners whose shops are closing down.
According to a report by Shanghai Hotline on Aug. 2, a woman in Hangzhou recently sold a dozen Hermès bags at one time for cash to support her husband. The disruption of the supply chain caused by the lockdown and pandemic restrictions is the first and foremost impacting her husband’s foreign trade business.
Li Yi, a second-hand luxury store owner, told the same story. She said there was a man in his 30s who came to her shop with his luxury goods worth up to $440,000 including watches, handbags, and jewelry. There is a high demand for luxury bags. She received 30 requests a day and many of them were once successful financial professionals. However, now there are hardly any buyers. If there are people who come to the shop they either want to sell their items or window-shop only.
Xia Yifan, an expert on China issues and a commentator on current affairs, believes the economy is in recession. Small, medium, and micro enterprises without any government support have closed down. He said this is just the beginning and the economic downturn is unstoppable.