E-commerce and second hand could become the two dominant trends in the fashion and luxury market. There are two main reasons: they allow you to save money and avoid waste, by purchasing and reselling excellent quality second-hand clothes and accessories, and they allow you to reduce the environmental impact of a sector that annually consumes 1.500 billion liters of water, produces over 92 million of tons of textile waste and is responsible, due to the washing of synthetic fiber garments, for 35% of the microplastics present in the ocean. Sustainability has also become fundamental for the big Luxury and Fashion brands which build their strategies on medium-long term prospects.
SECOND-HAND FASHION: DISRUPTIVE GROWTH
According to a survey conducted by the Boston Consulting Group and Vestiaire Collective on 7 respondents from six different countries, including Italy, used clothes will become more and more fashionable. From 2018 to 2020, the market recorded a growth of 12% against the +4% of the "first hand" and today it is worth between 30 and 40 billion dollars. Not only that, according to the BCG, within the next 5 years the sector will grow by 15-20%, reaching 64 billion dollars. An increase that will be mainly driven by generation Z. In fact, 80% of those born between 95 and 2010 consider it "normal" to buy used clothing, especially online. The Covid-19 pandemic has even accelerated this trend, giving buyers the opportunity to buy luxury clothes and accessories at more affordable prices, taking advantage of second-hand fashion.
“This very positive dynamic is supported by various advantages on the consumer side: among them, the possibility of accessing luxury products at more affordable prices, finding rare and vintage pieces, contribute to sustainability of the environment by participating in the circular economy. Hence the urgency of brands to forge a specific strategy to capture the value of this growing segment”, underlines Guia Ricci, principal of the consulting firm Boston Consulting Group.
Among the large luxury groups, this trend does not seem to have escaped notice Kering, which together with the Tiger Global Management fund a few days ago bought 5% of Vestiaire Collective, the leading platform in the high-end second-hand sector.
THE SECOND-HAND LAND ON THE STOCK EXCHANGE
Farfetch British company that built its fortune on e-commerce, selling fashion, luxury and design products from over 700 boutiques and brands around the world, in 2019 decided to focus on the sale of used designer bags as part of a broader sustainable strategy. In 2020, on the Nyse, the stock gained more than 400%, reaching a capitalization of 19,1 billion dollars. In the same period, the shares of Lvmh, the world's largest luxury giant, increased by 26,1%.
Second-hand fashion, company after company, hypo after hypo, is quickly conquering Wall Street. And we may just be getting started. The first resale platform to land on the stock exchange, in 2019, was TheRealReal. In January 2021 it arrived on the Nasdaq Poshmark, while last October, the shipping site thredup ,specializing in the buying and selling of high-end second-hand clothes, has launched an initial public offering.
In parallel many big fashion and luxury brands, from COS and Levi's, have decided to launch their own resale platform. “The second life market is destined for an important structural development” declared a MF Fashion Luca Solca, Bernstein analyst. The trend is already winning over Wall Street investors who haven't missed the potential of what has come to be known as re-commerce. The future may already be written.
