China’s second-hand luxury market is booming – here’s why: buying pre-owned Louis Vuitton, Rolex, Hermès, Prada and Fendi goods used to be frowned upon, but now shoppers are getting savvier
China’s coronavirus-driven economic slowdown is proving to be a boon for Zhu Tainiqi, the Shanghai-based founder of second-hand luxury goods marketplace ZZER, who is now scouting for shop space to expand the business.
“More and more people are now aware they can sell luxury goods for some money and the buyer side is noticing that they can get a great deal,” said Zhu, 33. “They think, ‘Why not give it a shot?’”
He said the number of ZZER’s consignors, or people putting up their goods for sale, has soared 40 per cent so far in 2022 over the same period of last year. The platform now has 12 million members and expects to sell five million luxury pieces this year.
The trend indicates a significant change in China’s US$74 billion luxury goods sector, where the second-hand luxury subsegment has been slow to take off versus other markets such as Japan and the United States due to a preference for newness and fears of unsuspectingly buying a fake.
Who is the richest living American president? Net worths, ranked
It could have ramifications for the China-focused strategies of the world’s big luxury goods makers, who are grappling with softening demand in the key market.
“I think because of China’s interest … that can really move the needle for some brands to think about how they’re going to handle this [resale] market, and what role they are going to play in the whole process,” said Iris Chan, a partner and head of client development at consultancy Digital Luxury Group.
Office worker Wang Jianing is exploring buying second-hand luxury products, given the economic climate.
ZZER is banking on sentiments like Wang’s for growth. The company, which started as an online platform in 2016, began opening offline stores in Shanghai and Chengdu last year and is now looking for more shop space in Beijing, Guangzhou and Shenzhen.
Meet Jeet Adani, son of the world’s second richest billionaire
Besides ZZER, other top platforms are local names, such as Feiyu, Ponhu and Plum. Each of them drew tens of millions of dollars in venture capital funds in 2020 and 2021 with an eye to improving authentication practices, widening customer reach and, in some cases, moving from online-only to online-offline models.
China’s luxury resale marketplace is expected by analysts to remain dominated by local players for now. International companies such as Vestiaire Collective and The RealReal are yet to enter the mainland China market and confirmed to Reuters they have no immediate plans to do so.
Though handbags remain the top-selling category on luxury platforms like ZZER, Zhu said sales of watches and jewellery are also growing fast.
While a nylon Prada Messenger or Fendi Baguette bag sells for 30 per cent to 40 per cent less on resale platforms than in luxury boutiques, some products have seen the price gap widen further as more consignors rush to sell goods online.
Veteran vintage seller, Ou Huimin, who opened her Ding Dang store in Guangzhou a decade ago and also sells countrywide via live-streams, said speculators in the market have sent prices for top-tier luxury goods soaring.
The world’s richest royal families of 2022 revealed – net worths, ranked
Ou said Rolex Submariner watch prices rose almost 250 per cent between 2020 and 2021, but have pulled back as much as 60 per cent this year. “Now consumption has become more rational,” she added.
- Re-sale platform ZZER reported a huge surge in listings for Hermès Birkin bags and Rolex watches, with consumers seeking smart deals by buying pre-owned luxury goods
- The second-hand luxury market is expected to grow to US$30 billion in 2025, with platforms like Feiyu, Ponhu and Plum also leading the trend in mainland China