Want to know what is common with the economy and bags? There is a connection between all kinds of luxury goods and economics, and this happens with exquisite handbags. However, the question is, how can you understand this limited connection without using large economic terms that only economists seem to understand?
Principle of supply and demand
The general principle in economics is that if demand is greater, supply will be less, which will lead to an increase in the price of the product. Similarly, if the supply is greater, the demand will decrease, leading to lower prices.
Interestingly, even during the downturn in America during 2008, sales of luxury bags did not see a sharp decline and remained stable.
Let's first understand what the effect of recession is on handbags:
Design houses are beginning to focus more on utility than on luxury. For example, Louis Vuitton had a hot sale product — a watch studded with so many diamonds that it became difficult to tell time. But during the 2009 recession, more attention was paid to design than simple luxury. Similarly, leather in handbags makes a return, while other materials occupy the back seat.
Brands and design houses are combined with the psychological shift of the buyer. Although before they could highlight their excellent stores in marketing, a weak economy leads to the basics - emphasizing that the design of the designer bag is flawless.
People start buying one part of the application instead of going to the collection in bad times. It helps them streamline spending in their head. “I'm going to buy one classic Gucci” sounds better than “I will buy one Prada for parties and Louis Vuitton for the office”, although this item may cost more than a few others combined.
In Hong Kong, luxury handbags can be taken as a deposit. Instead of paper for your house or keys to your car, you can give your collector's bag, and after the assessment you will be given a loan. Asia is one of the largest markets for such luxury goods, and Hong Kong is among the best consumers.
Fine handbags are the only ones, which means that the market never faces a complete collapse even when the economy falls. Highly wealthy still continue to buy, and although the middle class reduces their spending, interest and purchase do not stop.
