It would seem that there is a shift in the luxury goods market, with tastes in Asia moving away from the traditional European stronghold, towards China, and homegrown luxury alternatives.
A recent report in the Financial Times highlights the growth of premium brands in China, such as Shang Xia, which enjoys backing from Hermès, and outerwear company, Bosideng.
But the real change is in China’s second-hand luxury market, a phenomenon we have also seen in Singapore. Items from top brands such as Louis Vuitton and Chanel, that can retain their resale value, makes them highly desirable amongst consumers. As a result, the FT reports that the second-hand luxury market is estimated to be worth over $8 billion in China.
With the move towards less frequent but higher value purchases, many consumers are favouring both new – and previously loved – classic items including watches and handbags. The Wall Street Journal reported in January that used Hermès handbags can be 25% more expensive than new ones because consumers are prepared to pay to avoid waiting. And watches from Rolex and Patek Philippe sell at average premiums of 20% and 39% respectively, according to data from WatchCharts.
According to the Financial Times, it is middle-class shoppers in China that have been the real force behind luxury spending, and it is middle-class shoppers who are most likely to exercise caution when it comes to protecting their purchases.
Buying any kind of luxury product is an investment, particularly if it rises in value. However, that also means that its value needs to be shielded against accidental damage and loss as well as theft. The rise in luxury goods purchasing is one of the reasons that item insurance, such as the policy offered by KoverNow, is now so sought after.
Take our luxury watch cover as an example. Customers are provided with complete protection to match their watch’s current market value, covering repair and replacement costs. And for the duration of their policy, a revaluation is carried out every 3, 6, or 12 months to ensure the cover aligns with market fluctuations. This means that customers always pay the right premium.
Of course, many of our customers choose only to insure their luxury items when they are travelling, so our policy can be switched on, or off, depending on need.
As the luxury and second-hand luxury goods markets continue to grow across southeast Asia and the world, flexible insurance that is agile enough to fit around individual needs and goods, will become more essential, reassuring customers that their valuable investments are fully protected.
