The used luxury goods business is on the rise. Growth is now stronger than new luxury products. Used luxury items are especially popular with the younger generation. That’s why various Swiss and international suppliers want to gain market share in the watch, jewellery, leather goods and fashion industries.
“We’ve seen double-digit sales growth in the luxury segment in recent years,” said Tirath Kamdar, head of eBay’s luxury division, in an interview with news agency AWP. The US giant has invested in authentication systems for products resold on its online commerce platform in recent years.
Switzerland is a buying market
This increased customer confidence and transaction volume. “This shows we’re moving in the right direction,” says the manager. After Ebay lost market share in online commerce to rival Amazon in recent years, the company is trying to strengthen its core business, which is the sale of second-hand goods, especially in the luxury goods sector.
To raise its profile, the American group has recently started supporting events in the luxury sector in Switzerland as well. These include Reluxury, the first Swiss trade fair for second-hand luxury goods.
“Switzerland is primarily a buying market, as many watch brands have their headquarters here,” says eBay manager Kamdar. Because the second-hand market is growing rapidly, cooperation with the watch industry is important.
According to the “Luxury Outlook 2022” study by Boston Consulting Group (BCG) and French luxury goods association Comité Colbert, the second-hand trade is growing twice as fast as the new luxury goods market. The global market volume in the used sector will increase from 33 billion euros in 2021 to an estimated 50 billion euros in 2025. The engines of growth here are the younger generations.
35 billion francs market
Ebay is working with Watchfinder, which is owned, among others, by Geneva-based luxury goods group Richemont, which specializes in the online sale of high-quality pre-owned watches. Watchfinder recently started selling products on Ebay. Currently, the partnership extends to Germany and Great Britain, Kamdar says.
US competitor Watchbox, which also specializes in selling pre-owned luxury watches, is also confident: “We’re seeing tremendous growth and have been profitable from the start,” says Swiss boss Patrik Hoffmann.
The market for pre-owned luxury watches is estimated at around 20 billion francs in 2021 and is expected to grow to about 35 billion by 2030, according to consulting firm Deloitte. This accounts for more than half of the new luxury watch market. The second hand sector has become more professional in recent years, especially with the introduction of warranty systems (Certified Second Hand, COP).
$30,000 per view
The Watchbox, which mainly specializes in niche brands, costs an average of $30,000 per hour. This is significantly higher than the competition. Due to its success, the US company took over French-speaking Swiss luxury watch manufacturer De Bethune, headquartered in L’Auberson, Vaud, last year.
Watchbox Switzerland boss Hoffmann says the significant drop in the prices of some well-known brands like Rolex on used platforms this summer is a market adjustment. For some brands, there is a certain normalization after price records.
“Despite this steep drop, some well-known brands still cost two to two and a half times the price of a new model in the store.” Hoffmann stressed that the industry is healthy.
Market in its infancy
The pre-owned market for luxury watches is still in its infancy. The Watchbox Switzerland boss said the uptrend continues despite the turbulence of last summer. The acceptance of the used market by the entire Swiss watch industry is growing. No brand manager can afford to ignore this industry as in the past.
After the market was initially dominated by independent companies selling luxury goods from big houses, big companies are starting to understand the importance of this segment. They now offer to buy back or sell old collections on their own website or through their partners.
Rolex’s announcement last week that it had entered the certified pre-owned watch (CPO) market was seen as a historic move for the industry. This is another proof of the growing importance of the second-hand market. (SDA/pbe)