Deflation Drives Chinese Luxury Shoppers to Second-Hand Market

As China's economy grapples with deflation, consumers like energy worker Mandy Li are turning to second-hand luxury goods. Amid wage cuts and a shrinking real estate market, spending on new luxury items has declined, prompting new businesses to attract cost-conscious shoppers and intensifying competition in the second-hand market.

Amid deflationary trends in China, consumers such as Mandy Li, an energy sector worker, are altering their shopping habits by turning to second-hand luxury items instead of new purchases. Li has experienced a 10% wage reduction and a significant devaluation of her family's properties.

Inflation data reveals a 0.1% decrease in consumer prices in May compared to last year, highlighting deflationary pressures in sectors such as autos, e-commerce, and coffee. The shift in consumer behavior underscores the economic downturn, with individuals resorting to cost-friendly options amidst increased competition.

New businesses are catering to budget-conscious customers with strategies like flash sales and affordable menu offerings. Yet, the surge in second-hand luxury market growth, spurred by economic circumstances, raises sustainability concerns as oversaturation and closures loom over the competitive landscape.

(With inputs from agencies.)