Millennials love affair: China’s second-hand luxury goods market booms amid pandemic
China’s love for luxury is spilling over into the once shunned secondhand goods sector, with online stores surfing a wave of pentup demand from shoppers, led by millennials, who have been forced into belt-tightening by the coronavirus pandemic.
The rapid proliferation over recent years of second-hand luxury sales online platforms have helped fuel an expansion of the market, similar to those of US online luxury reseller The RealReal Inc or 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.
Chinese consumers have traditionally shunned second-hand goods, though that has undergone a shift over the past decade or so led by younger, more environmentally conscious consumers looking for affordable high-end goods.
“Compared to completely new products, second-hand products are more economical for them,” Xu said. Sales growth at Plum have averaged over 25% month-on-month in the first half.
The actual size of the Chinese second-hand luxury goods market is small, luring platforms such as Plum, Ponhu and Feiyu which are betting on strong growth over coming years.
A report by China’s University of International Business and Economics and Isheyipai, a platform for second-hand luxury deals, estimated that sales of second-hand luxury products in China accounts for just 5% of the overall luxury market, compared with 28% in Japan and 31% in the US.
Consultancy Bain estimates that consumers will account for nearly 50% of the global luxury market — valued around $374386 billion — by 2025.
Millennials, those in their 20s and 30s, are a big market for the second-hand goods retailers. The joint university-Isheyipai report estimates that 52% of the second-hand luxury goods consumers in China are below 30 years old, a segment bigger than the entire U.S. population.
On Plum’s platform, a Louis
Vuitton Speedy 25 Monogram rated at 85% new was offering at $676.44, compared with $1,560 on the brand’s homepage. A 90% new black Gucci GG Marmont small shoulder bag was sold at $727.31 versus the official price at $2,250.
Sun Shaqi, a livestreamer who has 6.5 million followers on Douyin, the Chinese version of popular short video app TikTok, is one of many personalities promoting the idea of buying second-hand.