{"id":800791,"date":"2024-12-21T07:00:00","date_gmt":"2024-12-21T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=800791"},"modified":"2024-12-20T15:18:04","modified_gmt":"2024-12-20T13:18:04","slug":"luxury-watches-are-a-timeless-investment-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/800791\/luxury-watches-are-a-timeless-investment-in-south-africa\/","title":{"rendered":"Luxury watches – a timeless investment in South Africa"},"content":{"rendered":"\n

The demand for high-end goods in South Africa remains undiminished.<\/p>\n\n\n\n

This is according to the seventh annual\u00a0State of the Luxury Market in Africa\u00a0by Luxity. <\/p>\n\n\n\n

Luxity co-founder Michael Zahariev said that economic pressures like weak GDP growth and steep inflation levels lead to a decline in luxury spending. <\/p>\n\n\n\n

\u201cIn other regions, such as China, demand has softened to\u00a0mid-single-digit growth. As a result, brands including Balenciaga and Versace are offering unprecedented\u00a0discounts\u00a0to win back consumers and counter sluggish sales,” said Zahariev. <\/p>\n\n\n\n

The trend is also seen globally, with luxury goods sales anticipated to slow to between 2% and 4% this year compared to stronger growth in prior years. <\/p>\n\n\n\n

\u201cIn contrast, however, the report finds that there has been a sustained, resilient demand for luxury goods among African consumers,\u201d said Zahariev.\u00a0\u00a0<\/p>\n\n\n\n

The report shows that South Africa leads the continent’s luxury market, which boasts the highest number of luxury stores. <\/p>\n\n\n\n

High-end shopping experiences continue to thrive, with big malls like Sandton City seeing an increased luxury segment turnover. Liberty Two Degrees (L2D) said that luxury segment turnover increased from 12.5% in 2025 to 19% this year. <\/p>\n\n\n\n

Zahariev added that the pre-owned luxury segment has also maintained its growth trajectory, with strong stores in-store and online. <\/p>\n\n\n\n

\u201cLocal demand has remained strong as we continue to see a rise in market adoption for the luxury pre-owned sector. Overall, we are estimating a 30% increase in growth for the year \u2013 far exceeding growth in the new products segment.\u201d\u00a0<\/p>\n\n\n\n

South Africa is home to the most high-net-worth individuals in Africa and is set to see a strengthening market sentiment, which could boost the luxury market. <\/p>\n\n\n\n

Another factor aiding the African luxury market is accessibility, with the report showing a strong performance of mid-range watches, which have seen a 28% increase in sales.<\/p>\n\n\n\n

\u201cThis interest in accessible luxury is also sparking growth in the pre-owned market, with consumers looking for high-end options at more affordable price points,\u201d said Zahariev.\u00a0<\/p>\n\n\n\n

\u201cSigns of brand fatigue are emerging, with shifting consumer loyalty suggesting a more dynamic market, as people become more open to investing in a broader selection of brands.” <\/p>\n\n\n\n

\u201cThis shift is evident, with Herm\u00e8s rising to number one on the report\u2019s top five brands list, a position previously dominated by Louis Vuitton and Chanel.\u201d\u00a0<\/p>\n\n\n\n

He added that resale value is an important gauge of a brand’s appeal. <\/p>\n\n\n\n

\u201cPre-owned goods that command prices nearing those of new items demonstrate higher investment potential and stronger consumer interest,” said Zahariev. <\/p>\n\n\n\n

“A pre-owned Rolex, for instance, resells at 104.9% of its retail price, suggesting that consumers on the continent are increasingly willing to pay more for luxury items.\u201d<\/p>\n\n\n\n

Moreover, local brands are starting to establish themselves against their global counterparts. <\/p>\n\n\n\n

Browns, which resells at 66% of its retail price \u2013 is slightly below underperforming market leader, Cartier which has a resale value of 74%.\u00a0<\/p>\n\n\n\n

Cartier is notably part of the Richemont group, which was created by South Africa’s richest man Johann Rupert. <\/p>\n\n\n

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Source: State of the Luxury Market in Africa\u00a0by Luxity. <\/figcaption><\/figure><\/div>\n\n\n

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Opportunity for investors<\/strong>\u00a0<\/p>\n\n\n\n

\u201cWhile global luxury sales are predicted to remain modest in 2025, Africa\u2019s luxury market tells a different story. New brands will be entering the continent, and retail investments in luxury will continue expanding,” said Zahariev.<\/p>\n\n\n\n

“The pre-owned market is also expected to grow rapidly, aided by anticipated price adjustments from designers and stronger local currencies like the Rand, which will enable more Africans to participate.”<\/p>\n\n\n\n

“All told, this will see the continent\u2019s luxury market share rise, positioning it as an increasingly attractive opportunity for luxury investors.” <\/p>\n\n\n\n

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The fastest-growing companies in South Africa<\/a><\/blockquote>