Africa’s luxury market defies economic pressures

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The seventh annual State of the Luxury Market in Africa report by Luxity has revealed that the continent’s appetite for high-end goods, particularly in South Africa, remains undiminished.

Luxity co-founder Michael Zahariev says that typically, economic pressures like contracted GDP growth and steep inflation levels lead to a decline in luxury spending.

“In other regions, such as China, demand has softened to mid-single-digit growth. As a result, brands including Balenciaga and Versace are offering unprecedented discounts to win back consumers and counter sluggish sales.”

This trend is also seen globally, with luxury goods sales anticipated to slow to between 2% and 4% this year, compared to stronger growth in previous years. “In contrast, however, the report finds that there has been a sustained, resilient demand for luxury goods among African consumers,” he adds.

The resilient appetite in South Africa

Insights from the report show that South Africa leads the continent’s luxury market, boasting the highest number of luxury stores. High-end shopping experiences continue to thrive, with major malls like Sandton City seeing an increased luxury segment turnover - 19% this year, up from 12.5% in 2015, according to landlord Liberty Two Degrees (L2D).

Zahariev notes that the pre-owned luxury segment has also maintained its growth trajectory, thriving both in-store and online. “Local demand has remained strong as we continue to see a rise in market adoption for the luxury pre-owned sector. Overall, we are estimating a 30% increase in growth for the year – far exceeding growth in the new products segment.”

He is optimistic that, with South Africa being home to the most high-net-worth individuals in Africa, coupled with a strengthening market sentiment, the country's luxury market will continue outperforming global trends.

Accessibility drives demand

Another factor influencing the African luxury market has been accessibility, with the report highlighting the strong performance of mid-range watches, which have seen a 28% increase in sales. “This interest in accessible luxury is also sparking growth in the pre-owned market, with consumers looking for high-end options at more affordable price points,” shares Zahariev.

“Signs of brand fatigue are emerging, with shifting consumer loyalty suggesting a more dynamic market, as people become more open to investing in a broader selection of brands,” he highlights. “This shift is evident, with Hermès rising to number one on the report’s top five brands list, a position previously dominated by Louis Vuitton and Chanel.”

Africans willing to invest in global and local luxury brands

Zahariev adds that resale value is a powerful gauge of a brand's appeal. “Pre-owned goods that command prices nearing those of new items demonstrate higher investment potential and stronger consumer interest. A pre-owned Rolex, for instance, resells at 104.9% of its retail price, suggesting that consumers on the continent are increasingly willing to pay more for luxury items.”

Additionally, while global brands usually dominate luxury spending in Africa, he reveals that local brands are beginning to establish themselves, as seen with Browns, which resells at 66% of its retail price – slightly underperforming market leader, Cartier which has a resale value of 74%.

Africa’s luxury market is an attractive opportunity for investors

“While global luxury sales are predicted to remain modest in 2025, Africa’s luxury market tells a different story. New brands will be entering the continent, and retail investments in luxury will continue expanding. The pre-owned market is also expected to grow rapidly, aided by anticipated price adjustments from designers and stronger local currencies like the Rand, which will enable more Africans to participate. All told, this will see the continent’s luxury market share rise, positioning it as an increasingly attractive opportunity for luxury investors,” concludes Zahariev.

View the full State of the Luxury Market in Africa report.