New resale initiatives and partnerships launched in 2021 have made secondhand fashion an integral part of the industry’s operating model. In recent times, the resale industry raised funds worth $210 million and $60 million through Vestaire Collective and Grailed platforms respectively. Brands Adidas and Yoox Net-a Porter also inked resale partnerships with resale platforms ThredUP and Reflaunt.

Currently, worth $130 billion approximately, the global secondhand fashion market is set to grow in double-digits through 2025, says a Business of Fashion report. Dominated by the US, growth is being boosted by factors like increased consumer demand, untapped growth potential and growing awareness about the resale potential amongst consumers.

Factors driving resale growth

As per BoF Insights’, five factors are currently driving growth of global resale market. These include: increased inventory with better features offered by resale platforms; favorable demographics; reduced stigma attached to secondhand goods; launch of limited edition collections or drops; sustainability.

Around 75 per cent consumers in the US plan to increase investments in resale in coming years the report says. Existing participants are likely to increase purchases or sale of secondhand fashion, accelerating the growth of the US secondhand fashion market in double digits upto 2025. Around 60 per cent general consumers in the US, France, UK and Germany have purchased secondhand fashion before, show consumer surveys from BoF Insights. Only 15 per cent of the surveyed consumers remain unwilling to purchase secondhand fashion, the report indicates.

Concerns impacting market growth

The survey also indicates an increase in investments by consumers on secondhand fashion. As against 5 per cent of their expenditure spent on secondhand fashion in 2016, consumers spent 10 per cent in 2020. However, this was significantly less than their expenditure on automotive and consumer electronic goods.

Further, the survey shows, only 5 to 7 per cent of total fashion inventory in ‘resaleable’ condition is actually being resold by consumers. Some brands showed reluctance to engage with resale due to concerns including cannibalization of firsthand sales. They were also apprehensive about the conduciveness of resale environment. However, they need to cast their apprehensions aside and aid platforms enhance the resale experience.