SHANGHAI, Sept 28 (Reuters) – China’s coronavirus-driven financial slowdown is proving to be a boon for Zhu Tainiqi, the Shanghai-based founding father of second-hand luxurious items market ZZER, who’s now scouting for store house to develop the enterprise.
The previous enterprise capitalist is seeing a surge in individuals trying to promote their Hermes Birkin luggage or Rolex watches to lift money, in addition to a leap in curiosity from belt-tightening customers.
“Increasingly more individuals are actually conscious they’ll promote luxurious items for some cash and the client aspect is noticing that they’ll get an incredible deal,” mentioned Zhu, 33. “They suppose, ‘Why not give it a shot?'”
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He mentioned the variety of ZZER’s consigners, or individuals placing up their items on the market, has soared 40% up to now in 2022 over the identical interval of final yr. The platform now has 12 million members and expects to promote 5 million luxurious items this yr.
The pattern signifies a major change in China’s $74 billion luxurious items sector, the place the second-hand luxurious sub-segment has been gradual to take off versus different markets akin to Japan and america because of a choice for newness and fears of unsuspectingly shopping for a faux.
It may have ramifications for the China-focused methods of the world’s massive luxurious items makers, who’re grappling with softening demand in the important thing market.
“I believe due to China’s curiosity … that may actually transfer the needle for some manufacturers to consider how they are going to deal with this (resale) market, and what position they’ll play in the entire course of,” mentioned Iris Chan, a associate and head of consumer improvement at consultancy Digital Luxurious Group.
China’s second-hand luxurious market is tipped to develop to $30 billion in 2025 from $8 billion in 2020, consultancy iResearch mentioned late final yr. New estimates from this yr are but to be launched.
HANDBAGS, JEWELLERY
Workplace employee Wang Jianing is exploring shopping for second-hand luxurious merchandise, given the financial local weather.
“My consumption will certainly be downgraded (this yr), however I nonetheless like what I like, and I am unable to management the need to purchase it,” she informed Reuters, standing in entrance of a wall displaying Louis Vuitton and Gucci luggage in ZZER’s cavernous downtown Shanghai warehouse.
ZZER is banking on sentiments like Wang’s for progress. The corporate, which began as a web-based platform in 2016, started opening offline shops in Shanghai and Chengdu final yr and is now in search of extra store house in Beijing, Guangzhou and Shenzhen.
Apart from ZZER, different high platforms are native names, akin to Feiyu, Ponhu and Plum. Every of them drew tens of tens of millions of {dollars} in enterprise capital funds in 2020 and 2021 with a watch to enhancing authentication practices, widening buyer attain and, in some instances, transferring from online-only to online-offline fashions.
China’s luxurious resale market is predicted by analysts to stay dominated by native gamers for now. Worldwide corporations akin to Vestiaire Collective and The RealReal are but to enter the mainland China market and confirmed to Reuters they don’t have any instant plans to take action.
Although purses stay the top-selling class on luxurious platforms like ZZER, Zhu mentioned gross sales of watches and jewelry are additionally rising quick.
Whereas a nylon Prada Messenger or Fendi Baguette bag sells for 30%-40% much less on resale platforms than in luxurious boutiques, some merchandise have seen the value hole widen additional as extra consigners rush to promote items on-line.
Veteran classic vendor, Ou Huimin, who opened her Ding Dang retailer in Guangzhou a decade in the past and in addition sells country-wide through livestreams, mentioned speculators available in the market have despatched costs for top-tier luxurious items hovering.
Ou mentioned Rolex Submariner watch costs rose nearly 250% between 2020 and 2021, however have pulled again as a lot as 60% this yr. “Now consumption has develop into extra rational,” she added.
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Reporting by Casey Corridor and Xihao Jiang; Modifying by Brenda Goh and Muralikumar Anantharaman
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