Consumers worldwide are increasingly rejecting a throwaway society and embracing sustainable shopping habits. Rises in inflation and recession fears are further driving the adoption of recommerce and the circular economy as conversations around pre-loved shopping and the purchasing of second-hand items both in-store and online enter the mainstream.
Southeast Asia has emerged as the fastest-growing online retail market globally and is forecast to reach US$143 billion by 2025. But the region is also leading the way with a booming recommerce market. In addition, luxury brands such as Gucci and Burberry are also exploring the second-hand luxury market as ESG scores increasingly usher retailers on the right path towards sustainability.
Sustainability at the right price
Climate change has become an urgent concern, especially among young socially conscious consumers who make mindful purchase decisions and are passionate about lengthening the lifecycle of the products. Used marketplaces are increasingly attracting users by providing options to wear the top brands for affordable prices, all while being a part of the circular economy.
Since 2018, the luxury fashion second-hand market has grown by 27% globally. This is because consumers are increasingly reselling products they have used for some time to effectively reduce the cost of ownership, while also making space for new buys. This rise in popularity makes luxury more accessible and keeps high-quality products in circulation longer, reducing waste in the retail industry.
In 2021, a Recommerce report revealed that fashion topped the charts for demand and supply on Carousell Malaysia. Highlights included a 76% surge in Men’s Fashion. The most popular Men’s Fashion items purchased were tops, closely followed by sneakers. Elsewhere Babies and Kids saw an increase in listings created, while Electronics and Mobile Phones & Tablets saw more demand in listings viewed.
Although recommerce is still seen as a little eccentric in some social circles, it’s evident that young consumers don’t see any stigma around buying or owning used/pre-loved fashion. In addition, younger audiences possess a much higher self-awareness and know how their purchasing habits impact the environment.
This appetite for buying second-hand was evident when we launched our used marketplace on Ox Street, with a target of reaching $40,000 in used sales during the first three months. We ended up smashing this target in the opening four weeks, with the used/defects category on the app quickly becoming one of the most browsed pages in the app, almost on par with the ‘most popular’ section. To me, this signals the beginning of second-hand breaking through to the mainstream in Malaysia and Asia, driving a momentum that will likely be sustained over the next five years.
The obstacles holding back progress in recommerce in Asia
Despite the massive success and rising demand for recommerce solutions in Asia, there is still much room for improvement. For example, cross-border transactions can be notoriously tricky. Australia, for instance, does not allow the import of any used products. But it is hoped that a global focus on sustainability will soon change this.
Ensuring fake items from luxury brands do not make it on platforms has also traditionally been a problem on second-hand marketplace. But improved processes that document and authenticate items are vastly superior now, especially with advances in blockchain technology that help create a product’s permanent, indelible, and unalterable history.
Finally, brands have traditionally rejected the concept as they do not make any profit from consumers selling their products. But many brands are beginning to take back control and are launching their secondary markets within their own platforms.
Making an impact
Anytime you purchase, sell, or give away an item to someone, you play an invaluable role in the circular economy and reject the previous world of overconsumption and excess. By giving underused items a new lease of life and buying pre-loved items from others, consumers are not only grabbing a bargain but also a part of the solution rather than the problem impacting the tiny planet we all share.
For brands, the booming recommerce scene in Asia unlocks opportunities to reinforce their sustainability efforts while also exploring ways to add value to the customer experience so that everyone wins. It’s important to remember that the pre-owned market should not be seen as just another fad or trend but as a genuine opportunity for retailers and consumers to make a difference.
There is no avoiding the fact that no matter how responsibly new products are made, there is an urgent need to stop needlessly throwing things away to buy new things we want but don’t need. So, the only question that remains is when will you make second-hand your first choice?
By Gijs Verheijke, CEO and Founder, Ox Street
