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Preloved fashion will become twice the size of Fast Fashion by 2029!
If you are a fashion CEO you must have spotted the rise of second hand fashion around you. You may have also considered launching your own resale program already. If not, you are missing out on the biggest opportunity in business, one that could help you take the next big leap of ecommerce growth - recommerce.
Here's all you need to know, we have consolidated all the reports on the growth of this market -
1. The resale market is growing 3 times faster than first hand and will become twice the size of fast fashion by 2029.
The global secondhand market was valued at an estimated $177 billion in 2022 and is expected to nearly double by 2027, reaching $350 Billion. With the rise of the e-commerce market, online resale is expected to grow by 21% each year on average over the next 5 years. Economic slow-down and inflation has seemed to work in the favour of the secondhand market, with many new people opting to shop secondhand in order to save money.
In the US, 1 in 3 items bought in the last 12 months are second hand. Resale grew 5X as much as the broader retail clothing sector in 2022 in the US.
Image Source: Fashion Business Reader
2. Brands are incorporating resale into their revenue strategy
Patagonia, a consumer company has publicly stated they want 10% of revenue to come from resale in the coming years, representing over $100 million.
A recent BOF post states - H&M Group’s profits got a surprise boost from an unexpected source: resale. H&M Group now owns nearly 80 percent of Sellpy, which is expected to generate more than SEK1 billion in sales this year and (in a rarity for re-commerce) is near break-even. The move offers a glimpse at how the company hopes to deliver on its challenging ambition to double sales while halving its greenhouse gas emissions by the end of the decade.
3. High Investor Interest in the Recommerce Market
A high increase of the investor interest in the re-commerce market is also a validation enough to attest to the unstoppable rise of the secondhand business. In 2021, $6 billion of venture capital funding was poured into re-commerce companies, expecting a 5x faster growth than the overall retail market. Re-commerce market has become a priority for investors as buyer sentiment is slowly drifting towards sustainability.
Not only this, since adopting resale makes fashion brands more sustainable, ensuring access to ESG funds. Investors now want to invest in sustainable businesses.
4. Sustainability is a driving force for this market’s growth
Gradual rise of interest in sustainability is also driving people to buy second hand. As per the ThreadUp Resale Report 2023, 83% of Gen Z have shopped or are open to shopping secondhand apparel in the US. 2 out of 5 garments in Gen Z’s closet are secondhand.
As per VOF’s India Sustainability Report, 50% of the students of fashion and design said they would be happy to wear recycled garments.
5. Gen Z is the leader of sustainable second hand movement
As per the ThreadUp Resale Study 2023, buying and wearing second hand clothing instead of new reduces carbon emissions by an average of 25%. Sustainability is also one of the top 5 motivators for Gen Z to shop from a particular brand. 47% of Gen Z refuse to buy from non-sustainable apparel brands and retailers. Gen Z are most willing to spend 10 percent more on sustainable products. Gen Z along with Millennials are the most likely to make purchase decisions based on values and principles (personal, social, and environmental). 37% of consumers spent a higher proportion of their apparel budget on secondhand last year.
Image Source: DW.com
Like any growing opportunity, right now while its still early, is the time to embrace Resale. It is a great way for brands to steadily acquire new customers, build deep customer loyalty, increase sales, build higher brand value, customer retention and hence profitability. So, if you are a fashion brand thinking about enabling resale, we recommend you adopt the innovation of having brand owned resale as fast as you can.
If you are a rapidly growing D2C brand, reach out to us and we will help you power your resale.