The Secondary Market Is Developing Faster Than The Primary Market. LVMH And Other Luxury Goods Groups Have Begun To Embrace It.

The luxury brands began to shake hands with the second hand platforms. Under the background of potential profit opportunities and the rise of environmental awareness, there is no permanent enemy.

According to the British fashion media Fashion United, recently, the American fashion resale website ThredUP estimated that the global secondary market in 2017 has reached 360 billion US dollars, of which online sales increased by 35%, much higher than the 8% growth rate of physical stores. It is estimated that by 2022, the scale of the secondary market will reach US $400 billion, while fashion products will be the leaders of development.

German financial institutions Berenberg analysts once said that second-hand

The growth rate of the primary market is more than two times higher than that of the luxury goods market.

The capital market, which is sensitive to smell, has responded to this.

For example, LVMH group's private equity fund invested in Stadium Goods, a fast developing US second-hand shoe retailer, with a total paction volume of more than US $100 million in fiscal 2017.

This is a typical case of catching up with the electricity supplier bonus era. Now Stadium Goods is only a physical store in the SoHo area of the United States, and 90% of its sales are from the electricity supplier channel.

When the consignor wants to sell his collection, he can go to the physical store. After the identification and pricing of the clerk, the merchandise can be added to the sales system.

After successful sale, Stadium Goods extracted 20% of its selling price as a consignment fee to achieve profitability.

Stadium Goods store in SOHO District, New York

In June this year, the group completed a similar acquisition, targeting Watchfinder, a second-hand high-end watch operator in the UK. This acquisition has become an important part of the strategy of adjusting its brand portfolio, and plays an important role in the performance promotion.

Stella McCartney, a designer brand that has always attached importance to environmental protection, recently and the United States.

The RealReal co sponsored a campaign called The Future of Fashion is circular (the future of fashion is recycled).

Activities cover radio, television and social media, calling on people to try to "resell" this mode.

In order to encourage consumers who have purchased products to resell what they do not need on The RealReal, the consignment seller will be able to obtain a $100 coupon from Stella McCartney and platform for the purchase of new stores.

In the past, luxury brands had never been so active in embracing.

They hate eBay and other resale platforms.

But with the change of consumption concept and business channel, there is no eternal enemy.

In July, The RealReal founder and CEO Julie Wainwright told Reuters that The Real Real's total commodity paction is expected to reach US $1 billion in two years, or will be ready to go public.

He also said that he was consulting with LVMH group and Kai Yun group recently.

Although Wainwright did not disclose details of the cooperation, according to people familiar with the matter, the way of cooperation may be related to big data.

Through the platform of The RealReal, brand can understand consumer groups, preferences and product circulation direction, which will play a role in brand marketing activities and pricing in the future.

For luxury goods and

To shake hands, the St phane Truchy, the French Public Opinion Research Institute, thinks that luxury brands are waking up. They finally realize that they have neglected a $30 billion market.

"And now 61% of the millennials will be active on the second-hand platform, which is one way to attract them."

On the other hand, the promotion of resale mode is also a way to reflect brand awareness of environmental protection. In the increasingly serious pollution and waste situation, this brand image is becoming more and more important.

Careless people will be condemned by environmentalists and shareholders after the 2018 financial year when they destroyed the inventory of 254 million yuan in value in the year of Burberry in July.

Although luxury is considered to protect brand equity and reputation,

The change of concept is eliminating this practice.

In less than two months, Burberry announced that it would stop the destruction of surplus stock and replace it with reutilization, repair, donation or recycling.