Dubai: Shoppers in the UAE are no strangers to spending thousands of dirhams on luxury products, but some are now willing to buy second-hand, if it means snagging their favourite designer handbag.
There is a growing market for pre-owned luxury items in the UAE, according to Kunal Kapoor, founder of The Luxury Closet and former head of sales at French fashion house, Louis Vuitton.
Launched in 2012, the website buys, sells and consigns pre-owned luxury items, from handbags to accessories to shoes, with prices up to 40 per cent (on average) less than the original. A slew of brands are available to choose from, including Chanel, Dior, Cartier and Burberry.
The idea to launch the website presented itself when Kapoor was chatting with friends about starting a business.
“If you can do this [sell used items] for cars, why not do this for handbags? I looked into it and found out that it was comparable. In the UAE, I heard about people having house parties to sell handbags. There was a model that was there; we just had to adapt it,” he said.
The discounts differ from one brand to another, reaching more than 70 per cent for some.
“With brands that discount at their own stores, like Dolce and Gabbana and Armani, the discounting goes up to 78 per cent,” he said.
Some products, however, sell for more than those in retail stores.
“With brands like Hermes, the price is on average more than the store price. We sell the Hermes Birkin, and if you go to a store you will normally be told that there is a waiting list and you can’t get the bag. However, there are people that actually have these handbags and they want to sell it. In a case like this, the item sells for more than the value of what you get from the store,” he explained.
Demand for luxury items in the UAE is strong, driven by “a strong affinity to luxury” and high spending power, he said.
Local demand
The UAE is the company’s top market in terms of volume of shipments, accounting for 60 per cent of sales, followed by the US and Saudi Arabia. Kapoor declined to say how much he expects total sales to grow this year.
“I think the UAE is a big market [for luxury products]. The UAE accounts for 30 per cent of the [luxury ]market of the GCC [Gulf Cooperation Council]. There is a lot of local demand and from tourists as well,” he said.
“The Middle East has the highest per capita spend on luxury in the world -- $1,500 per capita on average,” he added.
Last year, the company received 60,000 items for sale, he said, but declined to say how much of those were sold.
“Within a 12-month period, we expect to reach 1,000 order mark a month,” he said, without disclosing how many monthly orders the company currently receives.
The website has grown from having a few thousand visitors per month to around 500,000 today. Handbags are the retailer’s biggest-selling items.
Asked about how the company ensures that the products are authentic, Kapoor said: “Every category is managed by an expert. We know what the item looks like.”
Lack of trust was one of the issues faced by the firm when it launched.
“I think the early challenges were getting people to trust the website. I think being a new player, people want to check you,” he said.
