Previously limited to charity stores, secondhand clothing is becoming popular. An episode of the most recent season of the Netflix drama “Emily in Paris,” which is renowned for its designer outfits, highlighted Vestiaire Collective, a luxury resale website. The iconic British reality program “Love Island” has teamed up with eBay, an internet marketplace, to outfit competitors in used clothing. Last year, Oxfam, a charity, and Vinted, a Lithuanian resale website, displayed used clothing during London Fashion Week.
According to estimates by the bank Lombard Odier, the value of the worldwide market for used clothing and accessories has increased from $30 billion to $40 billion in 2020 to about $100 billion now. According to consulting firm McKinsey, second-hand sales will make up 10% of the global clothes industry this year, with the American resale business growing 15 times faster than clothing retail overall in 2023. Today, Vestiaire lists over 30,000 new things every day. Resale websites are flourishing at a time when many fashion firms are having difficulties.
Some consumers purchase used goods to protect the environment. About 10% of carbon dioxide emissions worldwide are caused by the fashion sector, which is higher than the combined effects of shipping and air travel. It also consumes a lot of water.
However, growth is one thing. Another is profit. Loss-making resale marketplaces have made investors antsy. Since the company’s 2019 listing, shares of the American luxury-resale website The RealReal have lost three-quarters of their value. Since its IPO in 2021, those of thredUp, another online resale company, have decreased by over 90%. Neither company is profitable. Vestiaire, which was established in 2009 and is still privately held, says it will turn a profit in the upcoming quarters.
Competition is perhaps the greatest danger to earnings. There are other venues to purchase old clothing besides charity stores and internet markets. Companies like The North Face and Lululemon are starting to sell their own products. Using social media sites like TikTok, more and more consumers are purchasing used clothing. Others could become interested as the industry expands.
source:Economist
