State of the Luxury Market in Africa 2023
Welcome to the sixth edition of The State of The Luxury Market Africa Report by Luxity, Africa’s premier pre-owned luxury reseller. This annual compendium reflects upon the dynamics, preferences, and trajectories within the luxury sector of the continent, with a pronounced emphasis on South Africa. Employing a robust combination of search metrics, traffic data, sales statistics, and additional external indicators, we strive to provide a comprehensive understanding of the luxury landscape in Africa. Download the full report Past Editions: Luxity’s State of The Luxury Market Africa 2022Luxity’s State of The Luxury Market Africa 2021 Luxity’s State of The Luxury Market Africa 2020 Luxity’s State of The Luxury Market Africa 2019 Luxity’s State of The Luxury Market Africa 2018 2023 emerges at the nexus of economic challenges and socio-cultural shifts. As we navigate a year significantly marred by higher inflation, a decelerating economy, and a weakening rand, the affordability quotient for luxury experiences an undeniable dip. The fervour of ‘revenge spending’ post the COVID-19 pandemic saw an uptick in luxury demand, but the pertinent question lingers: Will this demand surge persist, eclipsing supply, or will we observe a moderation as consumers recalibrate to the evolving economic paradigm and their new reality? In the subsequent sections, we delve deep into these trends, examining the subtle and overt nuances that define the luxury sector in 2023. Value of Luxury Brands In evaluating the prestige and allure of luxury brands, resale values provide significant insights. These values, juxtaposed against the percentage of the original price, encapsulate the enduring clout and resilience of brands in the market. The luxury landscape of 2023 has unravelled a few intriguing observations: Louis Vuitton and Chanel, traditionally formidable players, experienced a mild shakeup 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. Balenciaga stood as a beacon of resilience, especially in the South African market. The brand recorded a robust 10.1% escalation in resale value. Internationally, Balenciaga grappled with diminished desirability, a fallout from its contentious advertising campaigns in 2022. However, on local shores, it appeared invulnerable to such sentiments, underscoring the unique dynamics of the African luxury market. Taken collectively, the year witnessed an amalgamation of trends—some brands consolidating their positions, some retracing, and others breaking new ground. It’s noteworthy that after years of consistent growth across the board, 2023 charted a nuanced market trajectory. An enriching addition to this year’s analysis has been the integration of the watch and jewellery categories and brands. This has been revelatory: Rolex and Cartier reigned supreme, flaunting enviable resale values of 97.6% and 74.6% respectively. These numbers, largely driven by their iconic watch and jewellery collections, enshrine their perpetual magnetism. Tag Heuer, with a resale value of 58.8%, provided an instructive contrast. While it trails significantly behind Rolex and Cartier, its positioning among the top 15 accentuates an essential point: In the realm of luxury, it’s not just the category (in this case, luxury watches) that dictates a brand’s resale potency but also the intrinsic brand value itself. Tag Heuer’s relatively lower figures underscore that the brand’s impact within the luxury watch segment is not as dominant as its high-flying counterparts. In summation, the luxury sector’s allure, while perennial, undergoes intricate shifts influenced by brand decisions, global events, and inherent market dynamics. Search Interest Search interest, a metric representing the number of searches within an online store, is a critical measure of brand awareness and desirability. This component, segmented by individual brands, gives us an insight into the pulse of consumer curiosity and potentially, intent. The search interest for 2023 offers a tableau reflective of entrenched brand hierarchies, but with a few twists: Louis Vuitton and Gucci once again emerged as the crown jewels of search interest, commanding 16.88% and 14.14% respectively. Together, they constitute roughly 1 in 3 searches (31.02%), albeit marginally attenuated from the previous year’s 32.3%. The digital footfall underscores these brands’ voluminous presence: they dominate not only in search curiosity but also in transactional metrics, leading in both purchases and sales on the platform. The subsequent eight brands in the pecking order collectively claim roughly the next 1 in 3 searches, while the rest of the brands fill the final third. This distribution underscores the concentration of brand power, with a select few capturing a significant share of the digital curiosity. Yet, the landscape becomes intriguing when we adjust the search interest vis-à-vis available items in the market. Naturally, supply might drive demand, and by accounting for this factor, we attempt to isolate the intrinsic allure of brands. This adjusted view radically transforms the leader board: Rolex, traditionally capturing a modest 1.73% of the search interest, skyrockets to a dominant 13.11%. Similarly, Cartier and Omega also leap forward. This shift illuminates the innate attractiveness of watch brands, especially when supply-adjusted, suggesting a latent, intense demand. Among the non-watch luxury mainstays, Chanel (4.14%) shines, surpassing Louis Vuitton (3.31%). Yet, it’s vital to emphasize that even when adjusted, Louis Vuitton‘s resilience is evident. It maintains a commendable position relative to its peers, emphasizing its entrenched appeal. In summary, while raw search metrics depict a familiar luxury hierarchy, a supply-adjusted lens unveils hidden dimensions, spotlighting brands with intrinsic desirability and hinting at potential market trends in the horizon. Search Interest by Category While brand-wise search interest provides a glimpse into brand loyalties and shifting tides of preferences, examining search interest by category throws light on broader consumer behavioural trends. For 2023, a few revelations stand out: Shoes and Apparel, accounting for 24.86% and 14.73% of search interest respectively, have carved out a dominant space for themselves. To many observers, this might be counter-intuitive, given the reservations often associated with pre-owned items in these categories. The preconceived notion might lead one to expect a hesitancy towards previously-owned shoes and apparel. Yet, the data suggests otherwise. These
Sep 18, 2023