The Fashion Resale Market is Growing with the Rise of the Cost-Conscious Consumer

The resale fashion market is not new. Initially known to customers as charity or second-hand shops, interest in this sector has grown in recent years due to growing concern for the environment and the ethical implications of fashion.

As inflation and rising energy costs contribute to the cost of living crisis, particularly in the UK, shoppers are turning to cheaper, non-essential alternatives to new clothes, and even faster fashion. cheap.

Market Indicators

According to a GlobalData report titled “Global Clothing Resale Market and Forecast to 2026”, the clothing resale market increased by 109.4% between 2016 and 2021.

The growing dominance of online reselling platforms like Depop and Vinted has fueled this growth, especially since the pandemic when people were forced to shop online amid store closures or use platforms like these to sell items. that they took out of their wardrobes during the closures.

In October 2020, European used fashion marketplace Vinted acquired what is said to be the largest used fashion platform in the Netherlands, United Wardrobe. A year later, the company raised €250 million (US$301 million) in Series F funding to accelerate its growth and invest in technology.

The company operates in more than a dozen markets and claims to have become the largest online consumer marketplace (C2C) for second-hand fashion in Europe.

Driven by customer concerns about a lack of sustainability in the fashion industry and the need to offer more affordable alternatives, major brands are entering the resale market to remain competitive. In-house resale services rather than third-party platforms are particularly popular, as brands can target their existing buyer base while attracting new customers.

In February 2022, H&M launched a reselling section on its Swedish website in partnership with the reselling platform, Sellpy. Their online offering of used items in their local market includes second-hand clothing from their own brands as well as other third-party brands such as Asos, Nike, Zara, and Abercrombie & Fitch.

H&M bought a majority stake in Sellpy in 2019 and earlier this year launched an app with the aim of making secondhand shopping easier for consumers.

Among those that have jumped in this direction are Primark, Levi Strauss, Lululemon and Hugo Boss, which will launch a reselling service called “Hugo Boss PreLoved” in France during the third quarter.

Growth Target

The resale fashion market is expected to grow as shoppers continue to pull on their belts as they look for ways to save money. In 2022, the market is expected to grow another 31%, and between 2023 and 2026 it is expected to grow another 52% thanks to the emergence of new players.

However, according to the GlobalData report, growth is expected to start to slow a bit as the market becomes more entrenched in key markets.

Since 2016, the Asia Pacific region has seen the highest growth in the global apparel resale market as the stigma towards resale fades. The region is also expected to see the highest market growth in the forecast period (91.9% from 2022 to 2026) thanks to its large population, developing economies, and focus on luxury in core countries like China and Singapore.

The Americas suffered the largest drop in share due to a well-established market in the US and lower Internet penetration in Latin America, resulting in restricted access to digital resale platforms. Meanwhile, Europe’s share is expected to remain relatively stable until 2026.

Other key expectations include:

• Eastern Europe will lead the growth in the resale market thanks to its growing economy and the large presence of online resale platforms such as Vinted.
• The Asia Pacific region will be the fastest growing region thanks to its large growing population and penchant for luxury goods.
• Growth in South America and the Middle East and Africa region will continue to be hampered by low internet penetration, which means reselling is focused on traditional offline channels.
• The Chinese resale market will grow rapidly thanks to a strong appetite for luxury fashion and unique styles.

Market Inhibitors

While there is clearly a growing market for resale fashion, inflation, the emergence of new trends and negative perceptions in some countries are expected to create challenges.

In Europe and North America, inflation has become an enormous pressure on both consumers and retailers as discretionary income and therefore spending on non-essential items such as clothing and footwear shrinks. Consumers can also contribute to oversupply in the market when they try to sell clothes to make money.

It’s worth noting that most resale platforms only work online, so the challenges of not being able to try or touch products before you buy remain. Consumers should also consider the quality of clothing when buying used products and the subsequent rate of return.

In some countries, such as Saudi Arabia and the United Arab Emirates, there is still a stigma around buying used fashion, but these views are slowly changing, especially among millennials and Generation Z, who are more concerned about ESG. It is more important than ever that brands and retailers work together to change negative perceptions about used clothing and highlight the sustainable benefits of buying a used item.

Success Strategies

The GlobalData report presents a series of strategies that brands and retailers can implement if they want to continue to be successful in the global fashion resale market.

• Greater Completeness – Provide a greater variety of sizes, as most listings lack completeness. This can include options like petite, tall, size, and leg length filters.
• Promote sustainability: Resale platforms outperform traditional retailers in terms of sustainability due to their circular item credentials, but resale platforms must share this to attract buyers.
• Drive affordability: Low product prices on resale platforms are a unique selling point that players need to make consumers aware of, especially as the cost of living crisis continues.