November 28, 2008 10:34 pm

Keeping it real

Not even the black economy, it seems, can escape grim news. Over in Shenzhen and Hong Kong, one perennially thriving “black market” has been experiencing leaner times.

Those who have walked through these vibrant cities will have met the armies of touts in streets and arcades pushing counterfeit luxury goods – wristwatches, handbags, perfume, brand-name apparel. For years the business has been doing a booming trade. With rip-offs costing a fraction of the price of originals, an emergent and self-conscious Chinese middle class could afford to strut around with shiny Rolexes and Tag Heuers, and with Prada and Gucci python leather – much to the chagrin of western luxury goods makers.

But not even this market has been immune from the contagion of economic anxiety. Vendors have been reporting falling sales, as Chinese consumers brace themselves for a slowdown. However, the Financial Times has discovered a curious emerging trend. A new market for branded goods is making its presence felt: the market for renting luxury goods.

The proposition is simple: why buy when you can hire for the day a legitimate bag or watch for 1 or 2 per cent of the retail price? It appears that more and more Chinese consumers would rather rent the genuine article than buy the fake. A flight to quality, as it were, is afoot, and imaginative entrepreneurs are cashing in.

It is true, of course, that some imitations are better than the real things – just ask devotees of Tina Fey or Rory Bremner. But conspicuous consumption makes no sense if you are clearly sporting something that isn’t real. There is no point in wearing a Lacoste shirt if the crocodile is facing the wrong way, or sporting an item that is embroidered with Timmy Hilfiger, Luis Vuitton or Rolf Lauren. When it comes to certain things you can always spot a fake, and there is no substitute for the real thing. For the status-aware Chinese consumer feeling the squeeze, now clearly is not the time to be faking it.

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