Why are rich Chinese consumers selling their Rolexes? Passing on your luxury watch or Hermès Birkin bag might get you cash quick in China’s struggling economy – but prices are dropping

Aug 17 , 2022

Cash is king in an unstable economy, and wealthier Chinese are selling their pre-owned luxury goods, such as Rolex watches, to make a quick buck. Photo: AFP

Second-hand marketplaces in China have seen the price of Rolex Submariners drop by 46 per cent this year – which is shocking given that the same model was up 240 per cent in 2021

The price of a second-hand Hermès Birkin has also dropped by a fifth, according to luxury dealerships in Shanghai and Hangzhou – but how have China’s strict zero-Covid policies affected cash flows?

As much of China’s urban population continues to face strict and sporadic Covid-19 lockdowns, the Chinese watch world finds itself affected too. The second-hand market for high end goods has been one of the hardest hit as a result of Beijing’s strict adherence to zero-Covid. With little good news on the horizon for the country’s economy, the prices of second-hand luxury goods have fallen rapidly.

The cost of a Rolex Submariner watch was up 240 per cent in China in 2021 – what went wrong? Photo: SCMP Archive

It seems even the wealthy are exercising caution, cutting back on their discretionary spending and selling their Rolex watches and Hermès bags to raise cash. Whether a smart and strategic move or panic selling based on fear of the unknown, the outcome is the same.

Shoppers line up to visit an Hermès store after it was closed for months due to Covid-19 restrictions in Shanghai, in 2022. Photo: AP

China’s affluent consumers seemed happy to spend on luxury goods at the beginning of the pandemic, particularly since international travel was restricted. However, since then, China’s increasingly strict zero-Covid policy – which saw a full lockdown of China’s financial and commercial capital, Shanghai, earlier this year – has meant even some of the country’s wealthiest citizens have seen their cash flow take a hit. Giving away their expensive niceties has therefore become a no-brainer for some.

A Rolex store in central Beijing’s Parkview Green shopping centre, where visitors must show a recent Covid-19 test to enter. Photo: LuxuryLaunches

The Financial Times recently reported that Watcheco, an industry portal for used luxury watches, had seen the price of second-hand Rolex Submariners, a watch on every watch-lovers wish list, fall 46 per cent since March. And it’s not just expensive watches: even luxury bag dealerships in Shanghai and Hangzhou have reportedly cut the price of classics such as Hermès Birkin bags by up to a fifth over the same period.

Girard Perregaux’s Chinese brand ambassador, the actor Chen Xiao: with revenues of US$10.3 billion in 2022 alone, China remains the biggest luxury watch market in the world, but prices are dropping. Photo: Girard-Perregaux

“The boom time is over,” says James Wang, a seller of second-hand luxury watches in the eastern city of Nanjing. “We are entering a correction period that could last for a long time.”

Shopping malls like this one in Fujian have suffered as a result of Beijing’s ultra-strict zero-Covid policy, which often shuts down whole cities at short notice. Photo: Reuters

“Patek Philippe says you never actually own its watch but merely look after it for the next generation,” he continues. “That’s not the case in a business crisis. It’s probably the weakest I’ve seen in my 25 years in China.”

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