Second-hand luxury market growing fast

China’s second-hand luxury market has been growing rapidly in recent years, as more retailers are joining the sector. The growth in return has fueled the momentum of second-hand luxury good identification agencies. Young Chinese consumers who were born in the 1980s and 1990s have become the main demographic for luxury spending in China, including in the second-hand luxury market. The fast growth of e-commerce has fueled the development of the sector, according a report by market research firm iResearch. But compared with Europe, the United States and Japan, the scale of China’s second-hand luxury goods market is still relatively small, accounting for 5% of the total luxury goods sector, about 20 to 30 percentage point lower than in some developed countries, according a research report by the University of International Business and Economics and Youshe Yipai, a platform for second-hand luxury deals.

China Origin Inspection Co (COIC), a major luxury identification agency in China, now provides services to thousands of enterprises, such as video-sharing apps Douyin and Kuaishou, the auction unit of Alibaba Group, and the increasing number of second-hand retailers that emerged in the country in recent years. The company receives luxury items for identification, including those of Louis Vuitton, Chanel and Prada. “Consumer perception has changed a lot compared with the past, and more people began to accept second-hand luxury goods, given their high cost-effectiveness. The sector shows a significant growth potential,” said Zhang Lei, Director of the company. “For some iconic products, some manufacturers are more likely to make counterfeits, and there are times that the products we inspected were fake. At this time, luxury good appraisal mainly relies on manual identification. “We were not affected by Covid-19. Most of our growth was fueled by second-hand luxury products trading platforms,” Zhang said. “There is still a shortage of luxury appraisers, and we are training more professional talents. Next, the identification process will increasingly need the assistance of scientific instruments”.

Globally, luxury brands are showing an increasing interest in the second-hand luxury market. This year, French luxury group Kering made investments in European second-hand clothing platform Vestiaire Collective and luxury bag rental startup Cocoon. Meanwhile, more luxury brands such as Valentino and Jean Paul Gaultier have launched their own second-hand products trading platforms. Valentino said the second-hand platform could help attract more consumers to buy its products. For luxury brands, one of the biggest benefits in actively joining the second-hand luxury sector is to get more information about the authenticity of second-hand products circulating in the market, as the abundance of counterfeit products remains the biggest pain point of the second-hand market, the China Daily reports.