Source: Red Blin's official blog
Text/Feng Lingling
The second-hand e-commerce platform Zhuan Zhuan and Hongbling, which focuses on second-hand luxury goods trading, recently jointly announced that Zhuan Zhuan has wholly acquired Hongblin, and the two will be fully integrated.
It is not yet known what kind of sparks will collide after the integration of the two sides, but it is an indisputable fact that the scale of domestic second-hand commodity transactions has continued to expand in recent years, among which second-hand luxury goods are particularly popular. The estimated number of future market size of the second luxury market has increased year after year; There are also more and more live broadcasts on second-hand luxury goods on major e-commerce platforms, and some even do not close day and night.
The "second luxury circle" seems to have truly ushered in the wealth of the sky.
The second luxury market size may exceed 100 billion yuan
China's second-hand luxury market has become more and more active in recent years.
According to the "2023 Circular Fashion Industry Trend Report" released by Hongbling, the scale of China's second-hand luxury market has increased from 5.88 billion yuan in 2016 to 17.3 billion yuan in 2020, and the market is expected to reach 38.4 billion yuan in 2025 and exceed 100 billion yuan in 2030.
The huge growth potential of the second-hand luxury market may be much more than that. According to the Research Report on the Development of China's Second-hand High-end Consumer Goods Online Seller (Recycling) Market 2024, in developed countries, the transaction scale of second-hand high-end consumer goods accounts for 20%-30% of the total size of the high-end consumer goods market, but in China, the current market size of second-hand high-end consumer goods accounts for only 5%, and the future development potential is huge.
Whether it is a first-tier city in Beijing, Shanghai, Guangzhou and Shenzhen, or a new first-tier city such as Hangzhou and Chengdu, more and more second-hand luxury stores are emerging. At the same time, the popularity of live streaming has also made the online trading of second-hand luxury goods hot.
Who's buying second-hand luxury goods?
Who is buying second-hand luxury goods to hold up this 100 billion market?
"Younger", "female" and "first- and second-tier cities" are the key words of the portrait of consumer groups in the second-tier luxury market. According to the statistics of the Prospective Research Institute, the current consumption of the domestic second-tier luxury market is mainly concentrated in first-tier, new first-tier and second-tier cities, accounting for about 70%. In addition, the market is showing a very clear trend of younger people, and the more accurate user portraits are young women between the ages of 18 and 35.
Source: Red Blin's official blog
It is worth mentioning that some changes are taking place among consumer groups in the second-luxury market.
With the increase in the acceptance and spending power of luxury goods in third- and fourth-tier cities, the purchase frequency of second-hand luxury goods in these areas has increased significantly. With the rise of the "male face economy" and the change of men's consumption concepts, the proportion of male second-luxury buyers is also growing rapidly.
According to a research report released by McKinsey, luxury consumption in China's third- and fourth-tier cities is growing significantly faster than in first- and second-tier cities. In 2022, for example, the growth rate of the luxury market in third- and fourth-tier cities reached 25%, while the growth rate of first- and second-tier cities was 15%. Consumers in third- and fourth-tier cities pay more attention to cost-effectiveness, which provides a broad space for the development of the second-tier luxury market.
According to some analysts, although the main consumption areas of second-hand luxury goods are currently concentrated in first-tier, new first-tier and second-tier cities, the potential of third- and fourth-tier cities is gradually emerging. The market development of these cities is growing rapidly, and it may become the main growth point of the second-luxury market in the future.
Multiple factors are popular and luxurious
Why is the second luxury market so hot?
Tracing back to the roots, economic growth, changing consumption attitudes, the rise of e-commerce and social media, and the inevitable factors of circular economy development have become important driving forces.
"China is a major consumer of luxury goods, and the growth of first-hand luxury consumption has provided an ample market supply for second-hand luxury goods. Now the 'post-90s' and 'post-00s' have gradually become the main force of luxury consumption, and buying second-hand luxury goods is not only more cost-effective, but also a kind of green consumption, which is in line with the consumption preferences and abilities of young consumers. Chen Lifen, a researcher at the Institute of Market Economy of the Development Research Center of the State Council, told China News Service that the country is through train.
According to the "China Luxury Report" released by the VIP Research Institute this year, China's luxury consumption will return to the market size of one trillion yuan in 2023, reaching 1,042 billion yuan, accounting for about 38% of the global total, maintaining a strong growth momentum.
In addition, Chen Lifang emphasized that the rise of e-commerce platforms, livestreaming and social media has provided convenient channels for second-hand luxury goods transactions, improved transaction efficiency and promoted market prosperity.
Zhang Yi, CEO and chief analyst of iiMedia Consulting, told China News Service that the most important driving force behind the prosperity of the second-luxury market comes from the improvement of national consumption power brought about by the rise of the economy. In addition, there is the inevitable factor of the development of a circular economy.
In 2021, the "14th Five-Year Plan for the Development of Circular Economy" issued by the National Development and Reform Commission proposed to standardize the development of the second-hand commodity market, establish and improve the standards for the identification, evaluation and grading of second-hand goods, standardize the circulation order and trading behavior of second-hand goods, encourage the development of the "Internet + second-hand" model, and improve the efficiency of second-hand commodity transactions.
The following year, the National Development and Reform Commission and other seven departments issued the "Implementation Plan for Promoting Green Consumption" further proposed to vigorously develop green consumption, encourage the implementation of green clothing consumption, broaden the sharing and utilization of idle resources and second-hand trading channels, and encourage the sharing and exchange of idle items.
In recent years, many departments of the state have introduced policies to promote the return of luxury consumption and the development of circular economy, and the development of circular economy and reuse of resources is the focus. This not only promotes the healthy development of the second-hand luxury market, but also has positive significance in guiding rational consumption and promoting green and low-carbon development.
What are the "pitfalls" in the second luxury market?
While the secondary luxury market ushered in explosive growth, hidden dangers such as the mixing of authenticity and falsehood of goods, different appraisal standards, and insufficient trust were gradually exposed.
Ms. Cao, who lives in Beijing, bought a second-hand luxury bag through an e-commerce platform this year, but after receiving the goods, she found that the wear and tear problem was serious, and she wanted to return it but was told by the platform that there was no authenticity or quality problems and would not be returned. In desperation, Ms. Cao finally sold the bag at half the purchase price through a second-hand trading platform.
Guo Shijun contacted a store selling second-hand luxury goods through a live broadcast e-commerce platform. The merchant said that the second-luxury goods were identified by a third-party appraisal agency, and the buyer checked the fineness according to the detail drawings, and did not support seven-day no-reason return after receiving the goods.
On the Black Cat complaint platform, there are more than 3,000 consumer complaints about the second luxury, covering various problems such as after-sales maintenance, fakes, unreasonable prices, false publicity, and mismatched goods.
"At present, there is a lack of unified identification standards in the domestic second-hand luxury market, and there may be differences in the judgment of the newness and authenticity of goods by different platforms, merchants and even appraisers, which makes it difficult for consumers to accurately grasp the quality of goods when purchasing." Chen Lifen said.
Chen Lifen believes that the main pain points of the industry are the inconsistent identification standards, the lack of basis for pricing, the imperfect market supervision system, and the imperfect after-sales service. In the future, it will become the key to the sustainable and healthy development of the industry to formulate unified standards for identification, evaluation, grading, pricing, etc., standardize appraisal institutions and processes, and establish and improve market supervision mechanisms.
In Zhang Yi's view, second-hand luxury goods transactions are relatively scattered, and the foundation of trust is the most critical. At present, the information asymmetry between the two parties is still the most prominent problem in the market, and how to build an efficient and perfect appraisal system and the credit evaluation system of second-hand transactions and the corresponding punishment mechanism are particularly important.
"In the long run, the development prospects of the entire second-luxury market are still very optimistic." Zhang Yi said.
Source: The country is a through train
Editor: Zhuge Ruixin
Editor-in-charge: Wei Xi