As the slowdown in the Chinese economy deepens, prices are falling and consumer habits are radically changing. Mandy Li, who works in the energy sector, is now turning to second-hand luxury bags after her salary dropped by 10% and her family’s real estate assets halved in value.
In China, consumer prices fell by 0.1% year-on-year in May. As the deflationary trend continues, price wars have erupted in many sectors, from cars to coffee. Excess supply and weak demand are driving companies into a price-cutting race, offering consumers ultra-cheap options like breakfasts for 3 yuan ($0.40) and constant supermarket promotions.
However, economists warn: This kind of excessive competition could lead to firms closing down at a loss, increasing unemployment and further deepening deflation.
One of the most striking areas in this environment has been the second-hand luxury goods market. In 2023, this market grew by more than 20%.
As consumers seek cheaper but prestigious options, sellers are forced to significantly lower prices. At the “Super Zhuanzhuan” store in Beijing, a Coach bag, normally priced at 3,260 yuan ($454), is available for only 219 yuan ($30). Similarly, a Givenchy necklace, worth 2,200 yuan, can be found for 187 yuan. According to experts, increasing economic pressures and intense competition among sellers are driving luxury consumers from new to second-hand goods. In China, luxury has ceased to be a status symbol and has become part of smart shopping.
