China’s online second-hand luxury sector boosted by slow economic recovery
Thanks to a post-virus consumption rebound, China’s demand for luxury goods is projected to rise as much as 30% in 2020, becoming a bright spot for an industry that is experiencing a 45% decrease in worldwide spending, according to Boston Consulting Group, as reported by Bloomberg.
The second-hand luxury market is also expected to grow in China, according to a 2020 report co-published by luxury resale platform Youshe Yipai and China Luxury Research Center of the University of International Business and Economics.
“Right now, the market is in its infancy, with a future scale expected to reach RMB 1 trillion,” the report states, without indicating a time frame.
As COVID-19 lays economic pressure on families, many owners are considering selling their luxury goods for cash, while consumers are also seeking cheaper options to fulfill their demand, one of the authors of the report, Zhang Chen, told KrASIA. The trend is giving second-hand luxury e-commerce platforms such as Secoo, Ponhu, Plum, Feiyu, and Go Share 2, an opportunity to grow their user bases and increase their own brand notoriety.
Selling and buying pre-owned luxury goods isn’t a new business, as China had its first pawnshops as early as in the fifth century. Yet, as the trading process has moved online, sophisticated counterfeit goods still represent a challenge for the industry, the report indicates. Just to mention a few numbers, about 67.5% of Prada items in the nation’s market are replicas, while Micheal Kors has the lowest authenticity rate among all luxury brands, at 16.5%.