Secondhand luxury first in buyers' hearts

2021-02-05 12:04:06

Customers visit a secondhand luxury store on Nanjing West Road in Shanghai. [Provided to China Daily] China's secondhand luxury market is booming as more young and internet-savvy consumers, who are also environmentally conscious, are looking for affordable high-end goods through secondhand luxury trading platforms. Research firm Bain & Co said Chinese consumers will account for nearly 50 percent of the global luxury market by 2025 as the country has been leading the global recovery of the COVID-19-hit high-end products' market. However, sales of secondhand luxury products in China only accounted for 5 percent of the nation's overall luxury market in 2019, compared with 28 percent in Japan and 31 percent in the United States, said a report jointly released by the luxury research center at the University of International Business and Economics and Youshe Yipai, a platform for secondhand luxury deals. The report said the Chinese used luxury goods market is in its infancy, with the future scale expected to reach 1 trillion yuan ($154.6 billion),without providing a time frame. In 2019, more than half of secondhand luxury goods consumers in China were below 30 years of age. It added that the most popular brands on the site were from Louis Vuitton, Gucci, Chanel, Hermes and Dior, with handbags, clothing, shoes and high-end watches gaining traction among consumers. The secondhand luxury market is expected to witness rapid growth in China, which is giving related luxury e-commerce platforms such as Plum, Feiyu and Ponhu an opportunity to grow their user bases and increase brand influence. Plum, a Chinese online platform for used luxury goods, raised tens of millions of US dollars in a B2 round of financing in December. Established in 2017, the company aims to connect individual owners of luxury goods with potential customers who want to buy such products at a relatively lower price and mainly targets white-collar elites in top-tier cities. Xu Wei, founder and CEO of Plum, said the company's revenue recorded a surge last year during the pandemic as offline stores were mainly closed. Xu said its core competitiveness lies in supply chains. "The secondhand luxury market has a complex industrial chain, ranging from authentication, appraisal, price setting, presale and after-sales service." Plum has introduced livestreaming sessions, which allow buyers to identify the features and quality of the products more clearly, and begun to establish its own multichannel network team and train celebrity hosts. It now has its own professional appraisal team. In July, the company inked a strategic partnership with the luxury identification center affiliated with the China Certification & Inspection Group to ensure the authenticity and quality of luxury products offered on its platform. In August 2019, Plum raised $20 million in its Series B+ financing. Prior to this, the company had secured four rounds of financing. Started as a livestreaming store selling luxury products in 2016 on Taobao, an online marketplace owned by e-commerce giant Alibaba Group, Feiyu shifted its focus to the secondhand luxury live broadcasting market in 2018. The company completed millions of dollars of Series A financing last year. N5 Capital and Matrix Partners China jointly led the investment. Feiyu has set up six warehouses across the country, and has more than 40 certified appraisers who are responsible for the identification of products covering handbags, watches and jewelry. Each product needs to undergo a triple appraisal and re-inspection process. It has also set up dozens of live broadcast rooms in some 10 key cities across the country, with nearly 60 self-operated livestreaming anchors, of which more than half have monthly sales of 1 million yuan, the company said. The overall sales volume of Feiyu in 2019 was nearly 1 billion yuan. The growth potential for the secondhand luxury market is huge, and livestreaming is playing a vital role in boosting sales of used luxury goods, said Huang Shichang, founder of Feiyu. The platform has lifted the per-customer transaction numbers through livestreaming sessions. Now the average per-customer transaction at Feiyu is around 4,000 yuan, higher than other competitors, Huang added. The millennial generation is still the main driving force for the development of China's luxury market, and China's luxury brands are increasing their online penetration rate, said Bruno Lannes, a partner at Bain & Co's Shanghai office. Zhang Mengxia, director of the luxury research center at the University of International Business and Economics in Beijing, said Chinese millennials hope to buy high-quality and fashionable products at competitive prices, and are more willing to accept used items. The demographic's surging demand for luxury goods has given a big boost to secondhand luxury goods' online platforms, Zhang said, adding that these platforms should possess the abilities and methods to identify the authenticity of goods for sale.