Luxury Fashion Downturn: Customers Prefer Buying from Third Party over Snobbish Boutiques

The topic of the end of luxury, a trend started by YouTuber Super Dacob shows that it is in fact on its last legs. Furthermore, there are a number of observations done which shows that customers prefer buying online or from third party retailers. This is in lieu with the fact that some sales associates are rather snobbish. 

The Business of Fashion states, luxury powerhouses LVMH and Kering SA face a growing challenge in China: a gray market selling brand-new, authenticated goods at up to 40% discounts. E-commerce platform Dewu dominates this arbitrage trend. 

Louis Vuitton’s goods on Dewu grew 11% to 2.6 billion yuan ($358 million) in H1 2024, accounting for over 14% of their China sales.

Other labels like Christian Dior, Hermès, Chanel, and Prada also saw double-digit growth. Dewu’s rise poses challenges for luxury giants already navigating China’s slowing growth, impacting profit margins and investments in local operations.

However, we have yet to see the impact towards Dior this season after their endless scandal about their alleged worker mistreatment.

Luxury fashion downturn

TikToker @aeonkobra states that luxury brands would have to up their game as the standard aspirational customers are just as important as their top spenders. These brands are facing a time where even their top spenders are not spending as much as they used to. Some allege that it’s due to the possible quality decline and massive price increases. 

Additionally, the TikToker suggests that these brands should bring back the experience that was expected in these boutiques. Nowadays, a regular aspirational customer would not even receive a bottle of water, let alone juices or champagne. 

The gray market is able to undercut these boutiques and are probably even offering better service to their customers. For the most part, their items are significantly cheaper than what these brands are offering, and oddly enough, are authentic pieces from these brands themselves. 

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