Luxury is no longer about buying and holding. Brand-conscious consumers are reselling their designer clothes and at the same time, buying more for less.
The market for pre-owned luxury goods – apparel, accessories, watches, and jewelry – is estimated at $19 billion and rising rapidly, according to Claudia D’Arpizio, a partner at Bain & Co. The fastest growing segment is leather goods and clothing, which accounts for $4 billion of the market.
“We’ve moved from an era of owning goods for life to one where we enjoy stuff, use it, and let it go,” Fanny Moizant, co-founder of Paris-based online pre-owned luxury reseller Vestiaire, tells Bloomberg. She estimates that 80 percent of British women have about 10 billion pounds ($16 billion) worth of clothes in their closets that they don’t wear anymore.
Online platforms that enable consumers to buy and sell used luxury goods to each other while verifying authenticity are growing quickly and looking to expand.
Now, Instantluxe, another French online reseller of second-hand luxury goods, has entered the Chinese market with the launch of a Chinese website today. According to Instantluxe co-founder Yann Le Floc’h, the company is targeting aspirational middle class shoppers as well as wealthy consumers.
“Buying and selling secondhand luxury goods was taboo a decade ago,” said Yann Le Floc’h. “Now it’s considered smart.”
And the growth potential in China could be enormous considering the Chinese’s love for luxury goods and changing consumer attitudes. “Chinese consumers no longer hold reservations about a lessening of prestige or status through owning a second-hand bag and younger Chinese shoppers enjoy the feeling of getting a good deal,” Avery Booker of China Luxury Advisors tells Bloomberg.
The Chinese market seems ripe for for companies like Instantluxe as there is a growing inventory of luxury goods sitting idle in closets after several years of rapid luxury consumption. In July, China-based reseller Secoo raised about $100 million to help with expansion.
Could this growth in the secondary market be good for luxury brands?
D’Arpizio thinks it is a win-win situation because “the wealthy feel less guilty about spending thousands of dollars on something that sits in a closet, and it helps promote high-end brands, even if it affects sales in outlets and other discounters.”