Where Did Your Old Clothes Go? A Hidden Billion Industry Chain Survey Behind A T-Shirt

American Gap, Spain Zara, Sweden HM, Japan UNIQLO, in the bustling streets of the city center, all kinds of new clothes are fashionable among young people. But the shelf life is very short, a summer circulation, these goods are still good clothes turn the bottom of the pressure box, become the object to be processed.

Alipay online recycling channel, the old clothes recycling box in the community, whether in the ant forest to grow a tree, or do not accept the donation form to love, thus accomplishments a "underground economics": after the old clothes recycling, sorting, export and two sales, these "old things" become a new favorite, re dressed in Africa, the Middle East, Southeast Asian consumers.

This is a long and complete industrial chain with clear division of labor.

Statistics show that China will buy about 10 new clothes annually, and 3-5 of them will be discarded. About 50 million tons of clothes are discarded each year, and the recovery rate is less than 10%.

The scale of the old clothes recycling market is huge. At present, it is still a blue ocean, just like an undeveloped rich ore, attracting many entrepreneurs to rush into the gold rush.

　　 Status quo: 70% of donated clothing is sold.

Malawi in southeastern Africa is a poor country with less than 20 million population and heavily dependent on international aid. It is recognized by the United Nations as one of the least developed countries in the world. Walking on the streets of Malawi, you will find that local residents love to wear Chinese T-shirts with Chinese characters on them.

Mawlawi is not popular in China. These clothes are likely to come from old clothes recycling boxes in a residential area in Shanghai.

Three years ago, this was a hidden and unperceived "good business". The broker put in the old clothes recycling box in the District, and the users donated voluntarily. They sorted out summer clothing and sold it to Africa.

"The public's misunderstanding of old clothes recycling is very deep, because some enterprises in the early years were recycling clothes under the guise of donation." Ma Yun, founder of flying ants, told the "science creation board daily" reporter that with the increase of attention and online recycling platform, the old clothes recycling has been relatively standardized in recent years. Not only the old clothes recycling box seldom donated words, but the online recycling platform will even indicate the way of handling clothes after receipt.

For example, leisure fish, on the first page of old clothes recycling, focuses on four main directions of clothing recycling: export resale, environmental regeneration, mountain donation, and process reengineering.

More than 70% of the industry said that over 20% of the export of old clothes was resale, and 20% of them were environmentally friendly.

This long established industrial chain has been running for many years.

In the past, most of the recovery was offline, including government public welfare organizations, waste recycling stations, recycling boxes and shaking bells. In recent years, the front end recycling has gradually become Internet based. The white whale, flying ants, Ou Yan, clanging and other large head platforms have been born. Users can make reservations on Alipay, leisure fish, Jingdong, public numbers, and the couriers pick up the items free of charge.

In 2019, flying ants predicted annual recovery of 50 thousand tons. "The whole market recovery is not specific, at least one million tons." Ma Yun said.

These recycled unclassified clothes are called unified goods.

The price difference of general merchandise is relatively large. Generally it is 1500 yuan / ton -3000 yuan / ton, which will have different pricing according to the quality and proportion of the summer clothing, the recycling enterprise will be sold to the sorting factory at the back end and then transferred to the export factory.

Reporters got the latest quotations, indicating that the main purchase price of the factory was about 5000 yuan / ton.

"Guangzhou, Jiangsu, Zhejiang and Shanghai have the best market quality because of the good quality of summer clothing." According to Ma Yun, "in the summer uniform, we can pick out a particularly good summer clothing export, which can be sold to 8000 yuan -12000 yuan / ton." However, the market is changing rapidly, and the recent price is going down.

Generally speaking, a factory exports a large cabinet, there will be 27 tons of goods, the head export factory will have 40-50 large counters a month, and most export factories will be stable in 10-15.

After unloading from African ports, these clothes are transferred to the local second-hand clothing trading market. In Kenya, they are commonly referred to as "mitumba", in Nigeria, called "Kafa ulaya", and Mozambique is "roupa Da calamidade".

　 Market: Global 1/3 old clothes exported to Africa

Africa is the main consumer of secondhand clothing.

The trade data obtained from the official website of the United Nations showed that in 2018, the total imports of second-hand clothing in the world amounted to US $4 billion 100 million. Among them, the African market has digested 1 billion 300 million US dollars. This means that more than 1/3 of second-hand clothing is imported into Africa.

The United States, Britain, Germany and South Korea took the morning. Chinese businessmen did not participate in the past more than 10 years. A dozen years ago in Malawi, there were few Chinese. Now there are thousands of Chinese businessmen in business.

Jason, engaged in export business. In 2016, when Jason first entered Kenya, Malawi and other African countries were visas, hoping to find out the industry chain and develop customers directly from the local market.

"I went to the capital city. There was no tall building. I felt very poor." Jason told reporters on "science creation board daily" that because he had no guide, he called a local taxi to the second-hand clothing market. "The wholesalers we found are Chinese, especially those in Nantong, Jiangsu. They are prepared for us and are reluctant to disclose more information."

Jason visited Malawi secondhand clothing market

Jason visited China for three months. In fact, many African customers fly to China, especially in Guangdong, to negotiate business.

In 2018, China exported $280 million of second-hand clothing. Reporters rough statistics flow forward 20 countries, China second-hand clothing, more than 70% sold to the African market.

Among the top 10, 8 were African countries. Most of the second-hand clothes of Chinese people entered the local market of Kenya, Angola, Nigeria and Tanzania.

With the close trade, the African market has become more and more standard on old clothes. Jason sells good quality goods to Africa, and B goods (factory waste) aim at the Middle East and Pakistan.

Jason also came to visit clients in Pakistan. Pakistan people have strong trade ability in Africa. They import clothes from China. Some winter clothes will be digested in the country. Most of the clothes will be transferred to Tanzania, Congo and Nigeria.

　　 Opportunity: the sunrise in the eyes of entrepreneurs

What is China's old clothes recycling chain?

In 2015, there was a popular reply that was still in the early stages of development. It was included in the daily news, and 11000 endorsed and 892 comments were received. A user's introduction of the old clothes recycling industry chain set off a huge discussion about the old clothes market.

Many users have been inspired to prepare for the gold rush in the old clothes market.

Jason and flying ants Ma Yun, Wang Wei (pseudonym) are enlightened. "Initially thought that the old clothes recycling is the sunrise industry, because it is not conspicuous, the market is big, and the people know less, so it is to make the first pot of gold in the early days."

Wang Wei is aiming at an already mature inland city such as Shanghai and Guangzhou. He made up his mind to start at the bottom, but when he came in, he found that "every district, University, waste station, even the garbage picking Auntie had the right people to receive clothes, and others were offering a high price. I don't know how they made money."

A brutal fact is that after many years of horse racing, the offline recycling market has long been eaten up. Ma Yun's early business is also the same online search for breakthrough, the ultimate cost is too high, the profit mode has not run through, the team experienced a dissolution.

Ma Yun, the second time in 2016, changed a pattern. Due to a one hundred thousand + article posted on a local public address in Shanghai, the flying ant has brought huge flow in the short term, and the flying ants have been turned into online recycling.

"Online recycling has no threshold. In 2017, more than 20 companies similar to us came out." Ma stressed that the cost of online recycling logistics is relatively high, but flying ants are good at new media marketing, and users' single volume of goods tends to be stable.

Later, the flying ants and fishes, Alipay cooperation, the scale gradually expanded.

Logistics cost is a ridge, Wang Wei did not cross the past. Because of its small size, Wang Wei is now looking for a new job as a sideline in the recycling of second-hand clothes.

Old clothes recycling entrepreneurs continue to increase.

According to the data provided by the sky eye survey, the number of enterprises engaged in the old garment industry increased from 262 in 2016 to 359 in 2017, 569 in 2018, 830 in November 2019, and 261 in the new year.

Fang Xiaodong, founder of white whale, counted the accounts of the "science creation board daily" reporter. "If it is a team of 10 people, the profit point is at least 300 reservation orders per day, otherwise it will lose money. If there are 15 people in the team, you need 500 orders. At present, there are only three families who maintain 10000 single levels: white whale, flying ants and leisure fish.

"The cost of logistics has increased year by year, and the cost of online recycling has risen." Ma Yun told reporters of "science and Innovation Board daily" that their online businesses maintain small profits. "Old clothes recycling is a large piece of reverse logistics, with an average of 13 kilograms per unit. The logistics cost per kilogram is 1.8 yuan, our profit margin is only about 0.6 yuan. We can reach 100 tons per month to make ends meet.

In order to get higher profit margins, Ma Yun's current plan is to get through the industrial chain of the front and rear ends, and the export business is also controlled by his own company. But Ma did not want to do back-end sorting and regeneration, because the 80% sorting plant could only maintain operation.

Export business is much harder to do. "There are more than 400 second-hand garment export factories in the country, only twenty or thirty in real sense." Fang Xiaodong said.

　　 Turbulence: the blue ocean also means wilderness.

Second hand clothing industry is blue ocean, is Chaoyang, this is 2016, Ma Yun, Jason and Wang Wei, the second-hand clothing industry unanimous anticipation. But Fang Xiaodong, a veteran of the market for 7 years, seems to be in the cold winter.

"The export period of old clothes gold is 2006-2013 years, and in 2013, landing on QQ will jump out of advertising small pop-up. In that year, second-hand clothing enterprises were just as many as flies, and there was also a small climax in 2015. Since the beginning of that year, domestic competition has begun to heat up, and the whole industry has gone downhill.

The hundreds of millions of people born in the golden age of this industry are also shrinking from their peak.

"In the most prosperous period of the year, a big man in Shanghai occupied half of the old clothes industry in China, and now only 1-2 factories are shrinking, which is not as big as before." Another person who declined to be named to the "science creation board daily" reporter has enumerated the industry once the person of the hour.

The difficulty of profitability is mainly due to the confusion of second-hand clothing market. "Second-hand clothes are not brand models of household appliances, they are non standard products, and domestic quality is not good enough to control. Clothes circulating in the market are often mixed with garbage that does not satisfy the export needs."

Garbage is the B product in the mouth of the industry. Because of the abnormal market, the industry profits were "beaten very badly".

"In the past, Chinese people did very little, and 2000 yuan of summer wear could be sold for 10000 yuan. Now 5000 yuan is recovered, 9000 yuan is sold, although there is a profit of 4000 yuan, but according to foreign orders, B goods are eliminated, plus high labor costs, factories, water and electricity, taxes, customs fees, etc., to make a ton of qualified export summer clothing, the cost has reached 8000 yuan, and the profit space is very small." He said: "if the supply of goods is not well solved, if we purchase 50% of the rubbish, we will be dry for half a year."

"Foreign competition is also increasing. It is reported that the well-known domestic environment of Pu Lian has also shrunk a lot at home and abroad this year. Pakistan people have always been one of the most important local market leaders, and are fiercely competitive with Chinese manufacturers. " Those people said.

He sighed that this line was too common to switch on and off.

"Last year to this year is the year of online recycling mode, quality and price and export volume have increased, but the industry has not yet passed the cold winter." Fang Xiaodong said, "but I am very sure that the market is still in the blue ocean stage. Because no matter whether online recycling is good or offline recycling is good, all the total recovery has not reached 5% of the market demand.

In terms of global exports, the total value of China's second-hand clothing exports is also far less than that of the United States, Britain, Germany and South Korea. In 2018, the value of second-hand clothing exports amounted to US $670 million.

　　 Variables: contraction in African markets

The African market itself is losing dividends.

More than ten years ago, Professor Pietra Rivoli, an American economist, mentioned the complex feelings of African local governments in the second-hand clothing industry in his book "the global economic trip of a T-shirt".

Due to the impact of worries on the local textile industry, many African countries have been facing the problem of increasing the barriers to trade in second-hand clothing for more than a decade.

This is a difficult choice.

Because, "throughout history, it has been found that no matter the United States, China or Japan and other countries, they rely on the textile processing industry to embark on the path of industrialization."

It is not difficult to understand why the ban on secondhand clothing issued by African countries is hard to enforce. "Once people have tried cheap and fashionable clothes, it is impossible to ban second-hand clothing trade. It will only make more people try to bypass the barriers."

Over the past five years, Nigeria has classified second-hand clothing as an absolute prohibited commodity. The members of the East African community, Tanzania, Rwanda and Uganda, announced that they decided to stop importing second-hand clothing from 2017 to 2019, and implement new tax policies to help local textile industry.

After 2014-2017 years of oppression, the number of second-hand clothing imports soared in other countries in 2018, except for a slight fluctuation in Rwanda.

This year, the Central Bank of Nigeria announced the ban on textile import settlement in March 5th, prohibiting all importers of textiles and other clothing materials from applying for foreign exchange purchase. "It does have a certain impact on our exports, but not much." Ma Yun said.

Apart from Africa, Southeast Asia, Kampuchea and Malaysia are all important markets for second-hand clothing in China.

However, with the improvement of policy risk, the export of second-hand clothing has become a predictable sunset industry. This is almost the same view of the industry. Before the dividend disappears, the flying ants try to get a slice of the export business.

"The export assets are too heavy, which will take up a lot of money and will not shrink at the later stage." Fang Xiaodong said that the African legal system is relatively imperfect, leading to a profit hole: "you exported a container worth 270 thousand yuan to Africa. Generally, the buyer pays the final payment, then gets the bill of lading and takes delivery, but Africa can directly pick up the goods. Many companies have lost a lot of money in the export process. "

　 Situation: not optimistic about the capital market?

Recycling second-hand clothes is really a good business.

From the entry point of view, Ali's Alipay and leisure fish have been linked to the online recycling window, Jingdong, and other related businesses. Including the traditional recycling enterprises in the industry, Pu Lian also extended the industrial chain to the front end, and launched the recycling platform. The Internet giant expressed great enthusiasm for cooperation, but there was no willingness to invest in related enterprises.

White whale, flying ants and Jason factories did not get financing. Ma Yun told the "science creation board daily" reporter, in less than three years, they contacted at least 50 investment institutions, but no investment intentions. Their profit model is that the strong demand for second-hand clothing is gaining public traffic for its platform, gaining higher profits through advertising and agricultural and sideline products. At present, flying ants already have 2 million fans.

Small yellow dog has attracted much attention for its 1 billion 50 million financing. In March this year, it also had public service cooperation with Jingdong, but it didn't last long. Tang Jun, chairman of the small yellow dog company, is the actual controller of the P2P network. Because of illegal absorption of public deposits, the public security organ has taken coercive measures.

Internet Co's entry does not really want to make the second hand clothing industry. They are looking at the strong demand for second-hand clothing. A group of data was released by casual fish. In March 2018, leisure fish carried out the old clothes recycling plan. By the end of this year, a total of 8438 tons, about 40 million clothes.

"Internet Co appeal is based on traffic, leisure fish, Jingdong, and turn around, hoping to pull their data in this way. After all, like high profit mobile phone recycling, the demand frequency is very low, so they hope to improve data through higher frequency second-hand clothes trading. "

Fang Xiaodong stressed that the concept of public welfare and environmental protection is a major concern of Internet Co.

Doing public good is also a "curve saving the nation".

"On the one hand, we have visited many parts of our country and go to the mountains every month. It is found that they do not solve the problem of warmth but improve their quality. Our idea is to cash in on our old clothes and donate in other ways, such as buying new clothes, stationery, etc. On the other hand, Fang Xiaodong said that they donated 70% of the clothing brand new, the reason is still insist on donating clothing, but also because of donations based on users and many other needs.

The details of all public welfare activities were disclosed in white whale. Besides the pictures of poor areas, the number and amount of donations were disclosed. At present, the donation of white whale 39368kg is 63152 yuan.

"In fact, a lot of things are not as good as expected. Enterprises are really capable of giving back to some societies when they grow up, but most of them are free to collect clothes under the slogan of public welfare and environmental protection." Wang Wei said.

The change of donation to public welfare propaganda also caused dissatisfaction among the public.

A public welfare official told the "science and board daily" reporter that although the recycling of second-hand clothing and public welfare are not contradictory, the poor areas are short of clothing and lack of other materials, but "recycling enterprises can not play the banner of public welfare". He believes that corporate public welfare activities are not open and transparent and can not be supervised.

He believes that recycling clothing is a demand for environmental protection, not a donation.

Clothes are man-made fibers, and they can not be degraded. Therefore, "old clothes are ultimately municipal solid waste. If they are not recycled, they will pollute the environment."

It is understood that global consumers will buy 80 billion new garments annually, with a total consumption of US $1 trillion and 200 billion, and about 85% of the garments will be sent to landfill every year.

　　 Way out: can second-hand clothing return to market circulation?

The home of designer Priya Ahluwalia is in Nigeria, Africa. Because of her second-hand clothing, she has carried out the idea of turning waste into clothing into her own design and won the gold medal of the H&M design.

HM has burned 60 tons of unsalable clothing and is deeply involved in the brand crisis of environmental pollution. In recent years, HM has been keen to set up an environmentally sustainable image, launched the old clothes recycling plan and a number of environmental protection plans.

The conjunction of Priya Ahluwalia and HM is, to some extent, a causal cycle of the global second hand clothing trade. One practitioner said that HM's old clothes recycling plan in China, which eventually returned to the African market, was also recycled from the clothes recovered from flying ants and white whale lines.

With regard to the way out for the industrial chain, on the one hand, in order to cater for the national garbage classification, Jason, flying ants and white whale are vigorously developing intelligent recycling bins, and penetrate into the huge offline recycling market. On the other hand, in terms of business prospects, they are more likely to get through the industrial chain and let second-hand clothes circulate in the market to improve profit margins.

This year's H&M &Other Stories brand Swedish local market is a pilot project for the sale of second-hand clothing. The Spellp, a second-hand e-commerce brand that it cooperated and invested, was acquired by HM at the end of 10. HM says second-hand clothing is one of the fastest growing businesses in the fashion industry.

According to figures released by thredUP and GlobalData, an online shopping mall in the US, the size of the second-hand clothing market in the US in 2018 was 24 billion dollars, and the fast fashion market was 35 billion dollars. It is estimated that by 2028, the second-hand fashion market in the United States will soar to $64 billion, and the fashion market will reach US $44 billion. ThredUp Inc, known as the largest second-hand electricity supplier in the US, has also completed its $175 million financing. European second-hand clothes trading platform Vinted announced the financing of 128 million euros.

In recent years, a number of second-hand electric business brands have emerged in China, but only two, Plum and so on focus on high-end luxury accessories. KoGi is one of the few e-commerce platforms focusing on parity clothing. But the platform mode is C2B2C, more like the mini version of the leisure fish subdivision area, because the platform is only an information service provider, and does not participate in the transaction.

According to industry sources, in the early years, the state order forbids the import of foreign garbage and the circulation in the market. Second-hand clothing trade is equivalent to a red line, and second-hand clothing practitioners dare not touch it.

"Foreign industrialization has been relatively long, and recycling has formed a complete system. Our country lacks the corresponding standard, including from the process and upstream and downstream industry chain, as well as the degree of ecological integrity, our second-hand clothing has not reached the stage of rapid development of the industry. Cui Lili, an electrical researcher at Shanghai University of Finance and Economics, said.

However, the public welfare personage disclosed that our country is also actively promoting the policy of second-hand clothing permitted sale and related standards. "I believe that with the landing of the policy, our domestic second-hand clothing will usher in a larger development and the future direction."