By Muhammad Riaz Usman Khaleej Times, Dubai, United Arab Emirates
WWR Article Summary (tl;dr) Websites and social media portals have mushroomed around the world offering second-hand luxury items at heavily-discounted prices.
With the advent of the Internet, everyday life has completely changed. It has not only revolutionized communications, but also with its deep penetration into masses opened new avenues for commerce and trade.
E-commerce, with its accessibility on mobile phones, has become one of the fastest growing segments. It has also broadened the retailing sector as e-retailers can reach their target customers through social media and mobile apps without persuading them to visit their shops, and on the other hand customers can peep into the shops while sitting in their homes.
Traditionally, used-goods were sold in markets and shops and top-end products at auction houses. The Internet also changed this concept as a new market for used luxury items has emerged online. Websites and portals mushroomed around the world offering second-hand luxury items at heavily-discounted prices.
Countries like US and Japan have an evolved pre-owned luxury market that has existed and grown over the decade. However, in the UAE the adoption is just getting started. Shoppers in the UAE are becoming increasingly aware of the market for pre-owned items.
UAE market Bain and Co estimated that there are $500 billion of resalable luxury assets sitting in people's closets. Given the fact that the Middle East has the highest per capita spend on luxury in the world, this means the potential for luxury pre-owned exchange is going to be huge.
As a matter of fact top luxury brands never go on sales or discount, entrepreneurs such as The Luxury Closet (www.theluxurycloset.com), The Closet (www.thecloset¬onlineshop.com) and Bagatelle Boutique (www.bagatelleboutique.com), realised it and started offering big discounts online on nearly new designer goods.
"The second-hand luxury market in the UAE has been steadily growing, however, we are expecting it's just the start and poised for a glittering future. Customers are becoming more aware about the advantage of buying second-hand luxury products rather than new ones as fashion trend dynamically changing very fast these days, buying second-hand at bargains it's all they need to be able to catch up with fashion," Jamal Al Obaidly, managing director of The Closet, says.
He says the good thing about buying second-hand luxury good is that "you can buy two or even three products with a price of one brand new product."
"And if you wish to resale it later you won't lose a lot or not at all because the product price might increase with time," he says.
Raja Destremau, who established Bagatelle Boutique in 2009, says when she started the concept of second-hand luxury in the UAE was not popular.
"With time, people realized they can find amazing deals for luxury items they want and without spending high amounts of money. On the other hand, those who have used luxury items realized they can make some money instead of having them thrown in the back of the closet without any use," Raja said.
According to the consultancy Bain & Company, the value of global personal luxury goods market was more than 250 billion in 2015.
Dubai is the world's 20th top city for luxury goods sales, with the market worth of 3 billion (Dh11.97 billion), according to Bain data.
"We prefer to use the term 'pre-loved' instead of second-hand, as our products have been previously cared for and loved by our sellers, everything is given to us in great condition; often complete with authentication cards, original dustbags and warantees for fine jewelery and watches," Kunal Kapoor, founder and CEO of The Luxury Closet, says.
Consumers trend Kapoor says there are different types of consumers in the pre-loved luxury market: First, the fashion-savvy who always look for exclusive, limited edition and one-off pieces, which are in-demand and on-trend.
"Then there are the collectors, who solely search for vintage finds or collectors items, usually in the field of watches, fine jewellery or handbags. We also cater to the bargain hunters, who are interested in fashion, but are always on the lookout for a great sale and discount, and, lastly, the market for selling in the UAE is huge, with plenty of consumers buying straight from the store, only wearing the item once or twice, then selling it on to us," he says.
Hadeer Soliman, co-founder of The Closet, says the main concern when it comes to buy a second-hand luxury is "authenticity". "If you manage to gain the customers trust regarding authenticity and offer them the guarantee they need, they are so willing to buy second-hand luxury products. Even if they are second-hand but still you are paying a good amount to get them, so you need to assure of what you are paying for," she says.
Authenticity Kunal syas that The Luxury Closet has a whole team of authenticators dedicated to each category.
"Each brand goes through a meticulous, brand-specific authentication process for any signs of counterfeit production." Raja believes that authenticity is our most important and crucial criteria for her business.
"The moment we receive an item for evaluation, our experts begin their rigorous authenticating process. This includes things such checking the leather, hardware, stamps, serial number, the inclusions, the smell of the leather, even the history of the client selling this item," she says.
What is in trend? Mainly handbags and especially mini ones as they are in trend now, says Hadeer.
"Price range depending on the brands because each brand has its own resale value, however we offer from as low as Dh600 up to Dh200,000. We always make sure that our products are on bargains and save to customer at least 25 per cent off the retail price of the new one," Hadeer says.
Raja says her main specialty is high-end bags such as Chanel, Louis Vuitton, Dior and Hermes.
"Louis Vuitton is a very popular brand when it comes to buy and selling. The classic flap bag from Chanel is timeless and therefore it is always in demand and considered the hottest bag to buy," she says
Raja says she usually offers items from 10-80 per cent less than retail price, but if a bag is rare to find the price could be actually higher than retail.
"The Birkin and Kelly bags from Hermes are more or less always more expensive in the second-hand market and that is around the world. This is due to the fact that you cannot simply enter Hermes store and ask for these bags, there is usually a waiting list or you need to be a VVIP client," she says.
Kapoor says The Luxury Closet is to receive so many exclusive, limited edition, vintage and one-of-a-kind pieces, which are always in demand.
"With bags like the Chanel Flap Bag and Hermes Birkin raking in a resale value of over four times their original prices, collectable handbags have become one of our most popular categories, with consumers looking to make investments as well as just a fashionable purchase," he says.
"Our prices start from as little as $13 (a silk skirt by Just Cavalli) and go up to $168,767. Our highest discounted product is 97 per cent off the original retail price," Kapoor says.