In the past few weeks, long lines have formed outside of the Hermès, Louis Vuitton, and Chanel boutiques in Istanbul’s upscale district of Nisantasi and the city’s Istinye Park Mall—but these lines are not made up of Turks. Foreign shoppers have been flocking to the city to score “bargains” on luxury goods. While consumers from East Asia, as well as a few from Europe, have been spotted in the lines, the largest demographic of shoppers has been Arab tourists, many of whom are arriving with empty suitcases on family trips. All of these foreign buyers are taking advantage of boosted spending power. So what’s the deal with the drop in prices?
The month of August has seen a shocking plunge in the Turkish lira, rendering luxury goods much cheaper for foreign buyers. Some prices are down 40% because of the exchange rate. (The Chanel Camera Case Bag, for instance, now sells for 18,500 liras [$2,877], which sells for the equivalent of $3,700 in Europe.)
This has created a luxury shopping frenzy. Inside the busy and bustling boutiques in Istanbul, reported Bloomberg, customers have been asking prices and converting them on their phones immediately. Siham Al Hussein, a tourist from Fujairah, told The National UAE that tourists were effectively racing to procure the best luxury items.
Since the start of 2018, the lira has lost almost 45% of its value due to inflation, fears of economic mismanagement by the government, and worries about U.S.-Turkish diplomatic relations—and 18% in one day alone. In the past month, the lira has lost almost 30% against the dollar, according to Bloomberg, and 21% in one week. This has been to the detriment of Turks, who are suffering considerably from the economic plunge. Prices on imported goods have increased significantly, reported the NYT, worrying Turkish buyers and sellers. And, already at 15%, inflation in Turkey will likely continue to considerably rise in the next few months.
Turkish President Recep Tayyip Erdoğan has blamed the economic crisis on foreign powers, and has implored Turks to boycott American electronic goods, especially Apple. Erdoğan, moreover, has explicitly encouraged the tourist shopping, asking his country to extend their hospitality more than under usual circumstances.
“We hope that the currency, for Turkey’s sake, becomes better,” Khalid al-Fahad, a shopper from Kuwait, told Reuters. “And at the same time we hope for the sake of customers here that the lira remains as is.”
What are your thoughts on the lira drop (and resulting luxury price drop) in Turkey? Will you be doing any shopping in Istanbul anytime soon? Let us know what you think below.
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