Scarcity and Exclusivity: Chanel Places Purchase Restrictions for Some of its Goods

In a not-so-surprising twist of events, Chanel has informed its clients that it is introducing a purchase limit on some of its popular items like the Classic Flap Bag and the Coco Handle. This limit has also been extended to small leather goods products, limiting consumers to purchasing no more than two of the same product per year.

Customers in South Korea will be able to buy only one Chanel bag per year, like this Black classic Flip bag
Customers in South Korea can now only purchase one Chanel bag per year. Image courtesy of SCMP
When a price increase has no effect

This is not the first policy the French luxury fashion house has implemented in what is now an apparent bid to control distribution and maintain exclusivity. Early on in the year, it announced that it would be increasing its prices to cover up for store closures and other losses as a result of the pandemic. It has since increased prices two more times after that, bringing it to a total of three price increases before the fourth quarter of the year.

In spite of this, however, demand continued to soar – not necessarily because there was a natural interest from consumers waiting to get their hands on the best luxury goods, but because an artificial scarcity was created by middlemen seeking to sell at even higher prices to either a select group of people (thereby excluding loyal customers from other regions) or on unregulated resale platforms.

Purchase restriction is live in South Korea… For now

At the moment, Chanel’s one-handbag-per-customer-per-annum rule will take effect only in South Korea. However, it is likely to spread to China where ‘daigous’ aka surrogate shoppers are notorious for the above-mentioned practice.

Two chanel coco bags on a fake fur rug
Chanel is not the first business to control the distribution of its goods. Image courtesy of Shopify

In addition, there is no telling if it will become a globally applied practice. After all, the resale market is booming all over the world, and as more people become eager to own luxury goods without subjecting themselves to some of the rigour attached to the initial purchase process, it is certain that this sector will only continue to grow.

Chanel just might decide to introduce the purchase restriction in all its markets. So, if you’re outside South Korea and are told you cannot purchase the Classic Flap Bag until next year, don’t be too surprised.

Like Hermès, Like Chanel

Hermès probably laid the blueprint for Chanel’s latest policy. Earlier in the year, it had introduced its own purchase restriction system, limiting its clients to just two bags of the same style per year. This is in spite of the fact that it was already hard to get some of its most iconic bags, like the Birkin.

As Jing Daily explains, these restrictions are necessary: “Luxury is about scarcity. And as demand surges, brands will continue to restrict purchases. They’re not looking to inundate the global luxury market with excess inventory and lose their aura of scarcity.”

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