Daily Management Review

Boom In Second Hand Luxury Goods Market In China


Boom In Second Hand Luxury Goods Market In China
The once shunned second-hand goods sector is booming with interest from Chinese millennials as Chinese consumers once again show their love for luxury products. In fact, reports suggest that millennials are leading a new wave of interest in luxury and second hand products market through online stores as they try to unleash the pent up demand that had been supressed as consumers tightened their purse strings amid the Covid-19 pandemic.
An expansion of the second hand luxury product market has been driven by the rapid proliferation of second-hand luxury sales online platforms in recent years. These are similar to the online luxury reseller of the United States The RealReal Inc and Europe’s Vestiaire Collective.
“Our income recorded a surge this year during the pandemic as offline stores are mostly closed,” said Xu Wei, founder of Plum, a second-hand luxury products company in Beijing which is especially popular with millennial women from China’s lower tier cities, according to reports.
Second-hand goods have traditionally been shunned by Chinese consumers. However over the past decade or so, that has undergone a change which has been led by younger, more environmentally conscious consumers who seek to acquire high-end goods but at affordable prices.
“Compared to completely new products, second-hand products are more economical for them,” Xu said. In the first half of the current year, an average sales growth of more than 25 per cent month-month was witnessed by Plum.
Betting on strong growth over coming years, platforms such as Plum, Ponhu and Feiyu have forayed into the Chinese second-hand luxury goods market because the actual volume of the market is small.
Just about 5 per cent of the overall luxury market in China is accounted for by sales of second-hand luxury products in the market compared to a 28 per cent share in Japan and 31 per cent in the United States, said a joint report by China’s University of International Business and Economics and Isheyipai, a platform for second-hand luxury deals.
By 2025, about 50 per cent of the global luxury market — valued around $374-386 billion, will be accounted for by Chinese consumers, estimates consultancy firm Bain.
A big market segment for the second-hand goods retailers is the millennials, consumers who are in their 20s and 30s. About 52 per cent of the second-hand luxury goods consumers in China are below 30 years old which is as a segment is larger than the entire population of the United States, estimated the joint university-Isheyipai report.