China’s economic slowdown caused by the coronavirus pandemic has created a new opportunity for Zhu Tainiqi, the founder of ZZER, a second-hand luxury goods marketplace. With more people looking to sell their high-end items, Zhu is now planning to expand the business by scouting for shop space. This shift in China’s luxury goods sector is significant, as it has been slower to embrace the second-hand market compared to other countries like Japan and the United States. However, there is now a growing interest from both sellers and buyers, with more people realizing they can sell luxury goods for cash and buyers recognizing the value in getting a great deal.
The demand for second-hand luxury goods in China has led to significant growth for platforms like ZZER. In 2022, the platform has seen a 40% increase in consigners compared to last year, and it expects to sell 5 million luxury pieces this year. This changing landscape in China’s luxury market could have implications for global luxury brands, as they face softening demand in the key market. Brands will need to consider how they will handle the resale market and the role they will play in the process.
According to iResearch, the second-hand luxury market in China is projected to reach $30 billion by 2025, up from $8 billion in 2020. This growth presents an opportunity for platforms like ZZER and other top local players such as Feiyu, Ponhu, and Plum. These platforms have received significant venture capital funding in recent years and are improving authentication practices, expanding customer reach, and transitioning to online-offline models.
While handbags remain the top-selling category on luxury platforms like ZZER, there has also been a significant growth in sales of watches and jewelry. The increase in sellers rushing to sell their goods online has widened the price gap between resale platforms and luxury boutiques. While speculators initially drove up prices for top-tier luxury goods, consumption has become more rational recently, resulting in a decrease in prices for items like Rolex Submariner watches by up to 60% this year.
International companies like Vestiaire Collective and The RealReal have yet to enter the mainland China market, which is still dominated by local players. However, the growing interest in second-hand luxury goods in China may prompt these companies to consider expanding their presence in the region in the future. For now, Zhu and ZZER are capitalizing on this trend and have plans to continue growing their offline stores and expanding into new cities.
In conclusion, the economic slowdown in China has led to a surge in the second-hand luxury goods market, with more people looking to sell their high-end items for cash. This trend presents opportunities for both buyers and sellers and could potentially impact the strategies of global luxury brands in China. Local platforms like ZZER are experiencing significant growth and are expanding their presence to meet the increasing demand. While handbags remain the top-selling category, sales of watches and jewelry are also on the rise. As the market continues to evolve, it will be interesting to see how international companies respond and whether they will enter the Chinese market to tap into this growing trend.
Links:
– Forbes: Chinese Secondhand Market Clothes
– Business of Fashion: Can China Support a Luxury Resale Market?
