How luxury watches are driving the secondhand market

9News Nigeria

Aug 14

A growing number of consumers are buying secondhand luxury goods to save money or make prudent investments. When it comes to luxury watches in particular, time really could be on your side.

The secondhand market in luxury goods has boomed in the wake of the COVID-19 pandemic and the cost-of-living crisis, helped by a growing demand for sustainability, a desire by consumers to own rare goods, and that ever-present hunt for a bargain.

Technology plays a part, with a plethora of resale internet platforms springing up to make secondhand products more accessible.

In a 2023 luxury resale report, Sign of the Times estimated the luxury secondhand clothing market will grow three times faster than the global apparel market. It said luxury resale is currently worth $24 billion (€21 billion).

While affordability tempts some buyers into the secondhand market, some pre-owned goods are actually more expensive than the original item. Take the case of luxury watches.

Secondhand Rolex, Patek Philippe and Audemars Piquet, the big guns of the luxury watch market, are often sold above the original retail price.

According to The Wall Street Journal, it takes about a year to make a new Rolex and the company simply isn't able to keep up with demand. This means customers are placed on a waitlist - a long list - which won't supply a new Rolex watch for a few months or even years.

This situation was aggravated by the post-pandemic boom when manufacturers in many industries struggled to keep up with surging demand, made worse still by supply chain delays.

In 2021, Rolex was driven to make a public statement to reassure clients that the delays were genuine and not part of a strategy to drive up prices. It said: "Our current production cannot meet the existing demand in an exhaustive way, at least not without reducing the quality of our watches – something we refuse to do as the quality of our products must never be compromised. This level of excellence requires time, and as we have always done, we will continue to take the necessary time to ensure that all our watches not only comply with our standards of excellence but also meet the expectations of our customers in terms of quality, reliability and robustness."

Secondhand markets are able to supply the desired item straight away. And prices have risen as more people flood the market.

Some customers are also looking for older, more valuable models that are discontinued and are willing to pay more money on the secondhand market for that 'exclusive' label.

But these high prices are gradually ticking away with buyers seeing a recent price drop on the resale market. Resellers have noticed prices coming back down to earth although there continues to be a large number of sales. For example, an 'average' Rolex still retains a lot of value on the resale market.

However, as with any market, it is difficult to predict how sales will evolve in the future.

Are there any downsides to buying in the secondhand market?

Simply put, yes.

The secondhand market's main downside lies in being sure an item is authentic.

According to a report by BernsteinResearch, no secondhand player can provide a 100% guarantee that a product is genuine. At best, they can insure against buying a counterfeit by accident.

According to the CEO of popular luxury resale company Vestaire Collective, "counterfeits affect less than 0.5% of all pieces sold on the site because we have several layers of verification before we even receive the item." However, the company has received several comments over the past few months from clients claiming to have received fake items.

Rolex is fighting this issue with its certified pre-owned program.

Secondhand retailers can send old Rolexes that are at least three years old back to the watchmakers. The program verifies that the watch is an authentic Rolex that works properly. Then, retailers can sell the watch with an official Rolex certificate, proving its authenticity.

Overall, the luxury secondhand market is continuing to attract customers but not always those looking for a bargain. In many cases, a desire to buy status items without having to wait is driving secondhand prices and the watch market's boom.

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