The secondhand industry is on the rise, with global sales reaching $177 billion in 2022, a 28% increase from the previous year, according to a report from online thrift marketplace ThredUp Inc. Factors attributed to the growth include surging inflation, the development of curated secondhand offerings by retailers, and increased awareness of sustainable shopping habits. The trend is set to continue, with ThredUp predicting that the secondhand industry will double to $351 billion in global sales by 2027.
ThredUp’s co-founder and CEO, James Reinhart, believes that resale is not a passing trend, but an increasingly crucial part of brands’ sustainability agenda. He said that it is no longer a question of whether brands will be involved in resale, but rather how. By getting behind the continued use of their existing products through resale, fashion companies can reduce their greenhouse gas emissions, water usage, and plastic footprints, while also securing an additional revenue stream.
The rise of secondhand and other recycle business models has been primarily driven by younger generations, particularly Gen Z. According to a survey by GlobalData, 83% of Gen Z respondents said they had already shopped secondhand for clothes or were open to it.
For instance, Shein, a Chinese retailer that has helped supercharge the fast fashion model, launched its Shein Exchange site last year. In March, H&M announced it was launching an online resale platform with ThredUp, stating in recent annual reports that it expects climate-aware consumers to prefer more sustainable products in the future. The potential shift in consumer preferences could be a big hit to future sales or, quite possibly, an opportunity. Whether the rise of secondhand and other circular business models will lead to a reduction in the production of new items or in consumer demand for new goods remains to be seen.