Tuesday 2 November 2010

Economics 101: Increased Demand Means Prices Will Rise... 02/11/10

We’ve recently spent a lot of time talking about China as an emerging luxury market. We haven’t been able to say enough, really. The increased consumption of luxury goods in China is having a real and important impact across many products and services in the luxury industry. Demand has suddenly spiked, and we are wondering if this increase will mean what economics guarantees it will mean: prices will rise.

Demand by Chinese and Indian brides for diamonds has helped to lift the global price of diamonds by 44 per cent. Wasn’t it Sade’s song… It’s A Diamond Life? We think this is very apt. The increase in diamond prices in addition to the increase in gold prices globally is really upping the total retail price if you want some chic ‘bling’ in your life, regardless of where in the world you’re purchasing. While we are still excited that global luxury brands are spreading their wings and doing very well, we had not thought this all the way through. We recently speculated that a new level of super-elite luxury might start to emerge as the luxury market increases in size… could diamonds and gold soon fall into this category? Time will tell…

Image credit: aclutx70th.com

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au