Luxury Timepieces in Argentina

2020 IMPACT

Players use e-commerce to help mitigate huge store-based losses in 2020

The outbreak of COVID-19 in 2020 meant that all stores selling non-essential items such as luxury timepieces had to close their doors for several months. These outlets are located in the main shopping malls in the country, which were shut between mid-March and mid-October, diminishing sales of luxury timepieces drastically, although e-commerce prevented a greater fall.

COVID-19 combines with weak currency, challenging players to the limit

With Argentina’s economy worsening at the end of the review period as the impact of COVID-19 led to widespread job losses and reductions in working hours, the leading players in luxury timepieces were forced to rationalise their operations as they faced the grim reality of high inflation and changing spending behaviour among consumers. Among the major issues they faced was the significant depreciation in the exchange rate value of the Argentinian peso over the course of 2020, which resulted in unit prices of all imported products skyrocketing in local currency terms, rendering luxury timepieces affordable to an ever decreasing number of people.

Slimming of consumer base offset by investment potential of luxury timepieces

In the past, demand for luxury timepieces encompassed a broad range of Argentinian consumers from middle-income to mid-to-high socioeconomic segments. Within this context, luxury timepieces were often considered ideal commemorative gifts for special occasions such as weddings, birthdays, retirements, anniversaries and such.

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