The phenomenon of “retaliatory spending” among the world’s wealthy guarantees the popularity of expensive goods
Sales of handbags, watches and luxury cars increased
Friday – 6 Rabi Al-Awal 1442 AH – 23 October 2020 AD Issue No. [
Reports indicate that sales of luxury goods such as expensive bags rose by 12% during the third quarter of the year (Reuters)
London: “Asharq Al-Awsat”
The agency set the example with what was reported by “Bloomberg” that sales in the fashion and leather goods department of the prestigious Louis Vuitton company rose by 12 percent – not counting exchange rate movements – during the third quarter of the year, at rates not very different from the rates that were It was achieved in the pre-outbreak of the global Corona pandemic.
There was a consensus on the expectations of analysts at Bloomberg News regarding the market’s performance during this period, which is a decrease in sales of 9. 0 per cent, not an increase.
That performance in sales shows how demand for expensive goods, which include handbags, watches and cars, returned once wealthy consumers were able to move out of their homes, as well as how much they spent a portion of the money they saved during the lockdown.
It is noteworthy that Europe is currently working to tighten the restrictions imposed on the movement of citizens again, in light of some countries registering large numbers of injuries again.
In China, where consumers could represent 45 per cent of luxury luxury customers this year, according to Jefferies’s data, shoppers pampered themselves when stores reopened.
This phenomenon – which bears the name of “retaliatory spending” – has spread to the United States and even Europe, where wealthy individuals spend the money they intended to spend during their holidays abroad, and eat them in restaurant halls, in high-end stores, according to What was reported by Bloomberg News.
Until recently, stock markets have rebounded strongly, which is encouraging US consumers to spend. As a result, women can buy luxury bags bearing the name of high-end brands such as “Christian Dior Bobby”.
As for men, they may spend a lot of money buying valuable watches. The famous “Swiss Watch” group, which sells watches and jewelry retail in the United Kingdom, recently announced better sales than expected.
However, these unexpected statistics are not limited to fashion houses and precious watch companies.
On the other hand, Daimler AG, which owns Mercedes-Benz, announced last week that it had registered free industrial cash flow, amounting to an astonishing 1.5 billion euros during the quarterly period from July to September. .
And it seems that the company’s customers with administrative positions were less affected by the pandemic than the services sector was the most affected. Cars have become easy to use as well if there is concern about using public transportation, or if there is a need to move from the city to the countryside, according to Bloomberg.
It is noteworthy that the large spread of «Mercedes-Benz» in China – where sales rose by 23 per cent year on year in the third quarter of the year – had a great advantage as well.
On the other hand, in the near future, there may be another benefactor from the boom in sales, and that is Apple, whose best-selling iPhone 12 Pro has become available for pre-order last Friday.
After saving some money during the lockdown period, consumers may be more willing to splurge by carrying new, more expensive phones, as the price of the iPhone 12 Pro Max is $ 1,199, while the price of the iPhone 12 mini is $ 649.
However, there are reasons to be cautious, as the boom in the luxury sales market may not be distributed evenly across the industry.
If consumers are making a private purchase, they are likely to be buying from one of the most well-known brands.
“When it comes to watches,” Bloomberg said, the most famous brands at the moment are “Rolex”, “Patek Philippe” and “Audemars Piguet”, all of which are privately owned.
Watches, handbags and jewelry are also considered items that are used in normal circumstances, while other products associated with the latest fashion, such as formal occasion dresses and high-heeled shoes, may be affected more due to the lack of activities that must be worn during them.
At the same time, with the increasing concern about recording economic losses as a result of the repercussions of the outbreak of the pandemic, enthusiasm about spending may diminish, and there are damages that may result from a second wave of Corona virus infections in Europe, and because of the uncertainty about the American elections, to the point of making Even wealthy consumers may prefer to save their money rather than spend it.
And nowadays, spending on luxury goods has returned strongly, allowing manufacturers to seize the opportunity to get the most out of the increased demand for their products.