Thousands of secondhand items traded in nation each day
Li Li, 29, a white-collar worker in Shanghai, spent 5,000 yuan ($788) buying a secondhand mobile phone from her friend. The device had only been used for one year and the price she paid was about half that for a new phone.
Although Li could easily have afforded to buy a brand-new product, she said she simply could not refuse such a good deal, as she really needed a phone.
Li sells used products online, and in the two years since she registered for the secondhand e-commerce platform ZZER, she has sold nearly 14,000 yuan of such goods, including clothes, shoes, bags and other accessories. She recently sold a hoodie, which she bought for 1,580 yuan three years ago, for 319 yuan.
"All the goods I sell are carefully selected. To me, they are idle products, but that doesn't mean they are worthless to others," said Li, who used to sell her used clothes to thrift stores when she studied in New York.
A flourishing market for secondhand items has existed in most Chinese cities for decades.
According to a report last year by the Institute of Energy, Environment and Economy at Tsinghua University and consulting company Frost & Sullivan, the scale of China's secondhand goods market rose from about 300 billion yuan in 2015 to more than 1 trillion yuan in 2020.
This market, which covers nearly all categories of consumer goods, is expected to reach 3 trillion yuan in 2025, the report said.
With more people now exchanging used goods, high-end products have become an important part of this rapidly developing market, thanks to changing attitudes among the younger generation.
A report released last year by market research company Ebrun said the main consumers in China's secondhand luxury market are 24 to 36 years old, and many of the younger generation no longer think secondhand is a derogatory term. Instead, visiting secondhand luxury stores has become a new trend for them.
The potential for the high-end used goods market became clear when Milan Station, a secondhand luxury shop established in Hong Kong in 2001 and went public in 2011. The first Milan Station store on the Chinese mainland launched in Beijing in 2008.
Analysis on the development of China's secondhand luxury market and a research report on investment prospects for 2022-29, both released by Insight and Info, said the nation's secondhand luxury market grew from 5.8 billion yuan in 2016 to 17.3 billion yuan in 2020, with an average annual compound growth rate of 31.1 percent.
Liang Qihua, the founder of ASEROOM, an offline secondhand luxury store in Shanghai, said there are more than 40,000 high-end "idle goods" exchange merchants in the domestic market, with 20,000 launching last year.
"About 10,000 of them are bricks-and-mortar stores, while the rest comprise studios and business carried out on WeChat," Liang said.
Launched in January, ASEROOM provides secondhand luxury bags, other accessories and watches, most of which come from individual customers.
Liang said some 300,000 used goods are traded in the domestic market each day, with leading brands such as Hermes, Chanel and Louis Vuitton accounting for 20 percent of the market.
"The pricing of secondhand luxury items is based mainly on the lowest counter price globally, and some 80 percent of the products are about half the counter price. The better the quality, the higher the price," he added.
ZZER, which launched in 2015, saw gross merchandise value of 1.5 billion yuan last year, compared with 10 million yuan in 2017. The platform now covers more than 12 million users and over 5,000 brands.
Zhu Tainiqi, its founder, said luxury appraisal, which is considered the biggest challenge in the secondhand luxury goods market, has grown as the market expands.
"Five years ago, there were no more than 100 professional appraisers in China, but last year for example, China Inspection Group's appraiser training course attracted nearly 2,000 people from different industries every month," Zhu said.
There are hundreds of people on ZZER's team of appraisers, which has assessed nearly 1 million products in the past six years, Zhu added. Each product undergoes 11 appraisals, including logo inspection, material observation and odor recognition.
The high-end secondhand market has flourished for numerous reasons－the COVID-19 pandemic being one of them.
Liang said: "Demand among customers for overseas purchases has transformed into domestic consumption. After the pandemic emerged in Europe, many luxury goods factories reduced production, resulting in supply shortages.
"In addition, foreign currencies lost value, triggering a rise in official prices of luxury brands, which in turn promoted the entire secondhand luxury market."
Last month, Securities Times reported that numerous luxury brands, including Louis Vuitton, Chanel, Hermes, Celine, Dior and Gucci, had announced price rises at the start of this year. For example, Chanel raised the price of some of its products in January by 8 to 12 percent. Prices for some of its popular handbags have risen by 60 percent compared with 2019.
Shen Zhengqi, the founder of luxury watch service provider She Xiao Zhu, said: "Popular watches may need to be sold with other less sought after models. The pandemic has restricted global travel－accelerating domestic circulation. As a result, prices of secondhand watches have risen significantly, especially for classic and popular products."
For example, a secondhand Rolex Submariner Hulk cost 50,000 yuan in 2016, but the price this year is 180,000 yuan.
"The secondhand market ensures consumers get what they want, while the number of new products is limited and pricing is cost-effective," Zhu said.
"In addition, Chinese have been buying luxury goods since the 1990s. Due to strong upgrading for such products, there are now sufficient secondhand stocks in the market."
The Securities Times report also said that stocks of secondhand luxury goods in China have "not been developed". The current market penetration rate is only 1 to 2 percent, compared with 20 to 30 percent in developed countries.
"The fact is that the circulation of secondhand luxury goods in the market is only the tip of the iceberg ... proving that this market represents a good opportunity," Zhu said.
In addition to the booming high-end market for used goods, secondhand daily necessities, especially clothing, are gradually being accepted by more people, forming another important sector.
Lu Yaping, 29, founded Savvy Exchanger in Shanghai three years ago as a secondhand goods exchange platform.
According to Lu, her time in New Zealand taught her about secondhand culture, and she often visited markets for used goods, which she continued to do after returning to China. About half of her daily consumer goods are secondhand.
"What attracts me most about the secondhand market is that you can always find some unique items. For example, I buy many styles that were popular a decade ago," Lu said.
She added that Savvy Market, part of Savvy Exchanger, has developed into a secondhand market held once a month.
The market sells clothing, shoes, bags, other accessories, artwork and daily supplies. Each sales day sees turnover of 100,000 yuan to 200,000 yuan. More than 15 sales have been held to date.
"At first, there were only about five vendors at the market, but the number has grown to nearly 50, showing that people now have a higher acceptance of the secondhand trade," Lu said.
She added that most participants at the market are 19 to 30 years old, and some have experience from overseas.
"They are willing to accept and experience this mode of trading. They don't care whether these clothes have been worn by others," Lu said.
According to a report released by the China Mobile Research Institute last year, secondhand consumption reflects young people's awareness of environmental protection and of the need to reduce waste and mismatch of resources. Such consumption also provides them with a new channel to seek friends with common interests.
Lu said: "Humans are the creators of everything in life and should be responsible for everything they have created." She added that Chinese are still relatively new to buying secondhand items, and most participants in this market were initially foreigners.
"However, in recent years, more and more Chinese have joined in, accounting for 50 percent of the overall participants," Lu said.
She added that with the concept of "going secondhand" attracting more people, some vendors and buyers have introduced their parents and friends to this market.
Lu plans to expand her business online to enable more people to experience the secondhand market.
Meanwhile, the Deja Vu recycling store, which launched in Beijing in 2017 and later opened an outlet in Shanghai, started out by selling secondhand books before developing its apparel and electronic products business. By the end of last year, the business had sold more than 20 million books.
As the store's slogan states, "A really good thing is worth buying twice."