Re-Commerce will total $25 billion by 2025, but expect only top producers in each category to survive
Online marketplaces have made it easier for consumers to buy and sell secondhand clothing, footwear and accessories, especially luxury goods, writes Deborah Weinswig, Managing Director of Fung Global Retail & Technology. Since 2009, re-commerce companies such as ThredUP, Poshmark, The RealReal, Vestiaire Collective and Swap.com have seen more than a half-billion U.S. dollars in venture capital investment.
“There is room for only one or two players in each subsector of the apparel resale market, as fashion re-commerce websites have to compete fiercely for both inventory and customers in order to benefit from economies of scale and achieve adequate profitability margins,” Weinswig writes.
Five factors should boost the sector:
- Global Expansion, as France-based Vestiaire Collective plans to grow in the U.S. and Asia while The RealReal looks for more consignors internationally;
- Full-price trends such as the growth of athleisure will stimulate resale demand;
- Increasing business from sophisticated consumers who see luxury products, especially limited editions and prestigious handbags, as investments with plans to resell;
- Supplies will increase seasonally as shoppers change their wardrobes in April/May and October/November;
- Increased penetration among millennials.
Even as a shakeout begins, opportunities remain in niche categories such as sneaker resales, or targeting specific demographics, particularly heavy users of social media.
“A natural evolution has been seen in the introduction of social-media-type, peer-to-peer fashion resale apps, which are expected to attract more young buyers and sellers to the re-commerce market,” Weinswig writes.
The full report can be found here. Previous reports issued by Fung Global Retail & Technology include: “Deep Dive: Millennial Lifestyles Drive Growth in Apparel Rental,” “The UK Apparel Handbook-2017 Outlook” and ‘From Runway to Checkout: The See-Now-Buy-Now Trend in Fashion.” Fung Global Retail & Technology’s reports and analyses can be found at www.FungGlobalRetailTech.com and www.deborahweinswig.com. Subscribe here to Deborah Weinswig’s daily news and analysis on retail, fashion and technology.
About Fung Global Retail & Technology
Fung Global Retail & Technology is a think tank whose research team, based in New York, London and Hong Kong, follows emerging retail and tech trends, specializing in the ways retail and technology intersect, and in building collaborative communities.
The team, led by Deborah Weinswig, former top Wall Street and retail tech analyst and startup advisor, publishes ongoing thematic and global market research on topics such as the Internet of Things, digital payments, omnichannel retail, luxury and fashion trends and disruptive technologies. Subscribe here for Deborah Weinswig’s analyses of retail, fashion and technology. More information can be found at www.FungGlobalRetailTech.com.