Free Subscription

  • Access 15 free news articles each month

Professional

Try one month for $4
  • Unlimited access to news,insights and opinions
  • Quarterly and weekly magazines
  • Independent research reports and forecasts
  • Quarterly webinars with industry experts
  • Q&A with retail leaders
  • Career advice
  • 10% discount on events

‘Re-commerce’ sales tipped to reach US$25bn

Online sales of second-hand fashion, dubbed “re-commerce”, has been a major growth story, expected to be worth US$25 billion by 2025, says a new report.

However, it warns of a shakeout as individual sites compete for inventory and shoppers in a niche market.

From international think tank Fung Global Retail & Technology, the Deep Dive: Fashion Re-Commerce Evolution report says online marketplaces have made it easier for consumers to buy and sell used clothing, footwear and accessories, especially luxury goods.

Since 2009, re-commerce companies such as Poshmark, Swap.com, The RealReal, ThredUp and Vestiaire Collective and have seen more than a half-billion US dollars in venture capital investment, says the report.

“A natural evolution has been seen in the introduction of social-media-type, peer-to-peer fashion-resale apps that are expected to attract more young buyers and sellers to the re-commerce market,” Fung Global Retail & Technology MD Deborah Weinswig writes in the report.

“There is room for only one or two players in each subsector of the apparel resale market, as fashion re-commerce websites have to compete fiercely for both inventory and customers in order to benefit from economies of scale and achieve adequate profitability margins.”

Weinswig says five factors should boost the sector:

  • Global expansion, as France-based Vestiaire Collective plans to grow in the US and Asia, while The RealReal looks for more consignors internationally.
  • Full-price trends such as the growth of athleisure will stimulate resale demand.
  • Increasing business from sophisticated consumers who see luxury products, especially limited editions and prestigious handbags, as investments with plans to resell.
  • Seasonal supply increases as shoppers change their wardrobes in April/May and October/November.
  • Increased market growth from millennials.

Even as a shakeout begins, opportunities remain in niche categories such as sneaker resales, or targeting specific demographics, particularly heavy users of social media, says the report.

You have 7 free articles.