Second hand boom, the second hand market is worth 40 billion

Used cars are increasingly tempting to the luxury market. 2020, thanks to the pandemic, recorded a boom in the second hand business, estimated by BCG Consulting between 30 and 40 billion dollars worldwide and the global second hand market is likely to grow again in the next five years. with an increase from 15% to 20% per year. The numbers are rattled off by a recent BCG survey conducted on 7,000 people from six countries, and processed with data from Vestiaire Collective, one of the major resale platforms. “The growth of the second hand luxury market – explains Guia Ricci, principal of BCG to Adnkronos – is certainly one of the most disruptive phenomena that are shaking the fashion and luxury sector, both from the point of view of the consumer and from the point of view of the view of brands. “If on the one hand, as shown in the latest True Luxury Global Consumer Insight study by BcgxAltagamma, luxury consumers are increasingly actively participating in the second hand market, with 62% defining themselves interested in selling / buy and 1/4 of the consumers who bought / sold, on the other hand “we see the big luxury brands and conglomerates taking action in the sector both directly and through partnerships with specialized online platforms”, Ricci points out. This dynamics of the second hand market very positive is supported by various consumer-side advantages. Among them, Ricci points out, the possibility of accessing luxury products at more affordable prices, finding rare pieces and vintag and, contribute to the sustainability of the environment by participating in the circular economy. “Geographically, the Western world, that is Europe and America, is certainly the most developed, contributing to more than 2/3 of the total market”, Ricci remarks. If until a few years ago the second hand phenomenon was experienced by many as a second-tier market, between 2018 and 2020 the resale sector recorded a growth of 12% and experienced a surge during the months of the pandemic, also due to the lower flow of tourists due to the lockdown and the many stores closed. The trend does not seem to have undergone a change of course in the first months of 2021, confirming the fact that pre-owned is increasingly tempting, especially for the big names in fashion, which have begun to appear on platforms for some years. most popular digital cameras among second-hand lovers, among which Vestiaire Collective, Depop, TheRealReal, Stockx and Rebelle stand out. Some examples? In 2019 Burberry signed a partnership with TheRealReal, where there are, among others, brands such as Chanel, Chris tian Louboutin, Céline, Hermes, and Louis Vuitton, while Gucci, a brand in Kering’s portfolio, debuted on the same platform last October. Not to mention the ‘physical’ experiences, such as the Moscova District Market, in Milan, or Humana, the chain of solidarity shops of the Humana People to People Italia network, which help to support the resale market. In the last year and a half, Karin Bolin, president of Humana People to People Italia points out, despite the many difficulties generated by the pandemic, Humana Vintage, the chain of solidarity stores of the Humana People to People Italia network, has inaugurated three new stores in Milan, Rome and Bologna. “It took some courage – says Bolin – but the public proved us right”. In the opening months, the turnover even exceeded that of the previous year, giving “a clear signal that more and more people are choosing to buy vintage clothes” emphasizes Bolin. Among these there are many young and very young people, who decide to buy second-hand garments for an ethical question. “The proceeds from the sale in our stores go to support development projects in the South of the world and environmental impact – Bolin continues -. The trend is consolidating, so we are working on new upcoming openings”. collaborations with resale platforms are also the brands themselves. 62% of consumers would buy more from brands that collaborate with second hand players. And today 70% of second-hand buyers, according to the BCG-Vestiaire data, “love the sustainable aspect” of the second-hand market, compared to 62% in 2018. The rise of second-hand was unstoppable even in the first months of 2021. Elena De Cò, associate partner, Fashion & Luxury Strategy & Transactions of EY has no doubts: “After a growth of 100% declared in 2020 by leading platforms in the sale of luxury used cars – underlines – the acceleration is continued also in the first months of 2021, with peaks of 250% in some geographic areas such as Asia Pacific, so much so that the market value of second hand luxury garments could exceed 60 billion dollars by 2025 “. According to De Cò, interest from both the public and investors in this market is growing, “as evidenced by the investments of large luxury groups in second hand platforms.” An example above all is Kering which has acquired 5% of Vestiaire Collective. ” The platforms and the bran d that promote second hand do so in the name of sustainability – concludes De Cò – both in the tone of communication and in the choice of details, such as sustainable packaging of recycled paper, or even the opportunity offered to make a donation to a charity with the credits earned from the sale of their used clothes “. The major online platforms,” ​​are launching the sale of pre-owned clothing, offering vouchers to customers who sell their used clothes on the platform “. But not only that, the second hand is also expanding to low cost brands, “which are launching the purchase of used garments with a price ‘per kilo’ that starts from 20 euros per kg for the past collections to 30 euros for the season. in progress”. Among the most active markets, strong second hand growth is certainly expected in China. “Today it has a lower penetration (5%) than other countries (Japan and the United States are around 30%) – explains De Cò – but it is growing rapidly, considering that about 52% of second-hand consumers in China are young under 30 years and that China will account for half of the luxury market sales by 2025 ”. A strong boost to luxury second hand will be given by the use of new technologies such as blockchain, which will offer traceability and guarantee of authenticity to consumers. “Just think of the recent birth of ‘The Aura Blockchain Consortium’ – concludes De Co ‘- promoted by the largest luxury groups. In fact, it is estimated that today about one third of second hand consumers are unwitting victims of fraud, a nice deterrent to the development of the channel ”. (by Federica Mochi)