What was once considered an unremarkable corner of commerce has now become a battleground for e-commerce giants and fast-fashion brands alike. What mysterious force is drawing these industry leaders to the secondhand market? Is it pure profit-seeking, or does it signal deeper market transformations? This article examines the driving forces behind the secondhand boom and the hidden opportunities and challenges within.
I. eBay's Strategic Pivot: Reclaiming Leadership in Secondhand E-Commerce
As eBay gradually lost ground to competitors like Amazon, the company has refocused its strategy on its original strength—the secondhand goods market—with particular emphasis on the luxury segment. This strategic shift reflects both a reassessment of eBay's core competencies and keen market insight.
1. Market Share Decline and Strategic Reassessment
Following a brief pandemic-era boom, eBay's gross merchandise value (GMV) has declined for five consecutive quarters, accompanied by significant market capitalization loss. Its U.S. e-commerce market share plummeted from 7.6% in 2016 to just 3.5% this year. Facing fierce competition from Amazon and others, eBay recognized it couldn't compete in the general merchandise space and chose to return to its roots.
2. Focusing on Premium Secondhand Markets
eBay now prioritizes collectibles and luxury items like jewelry and watches—categories with higher average order values and profit margins that could boost profitability. The company projects these focus categories will account for 50% of sales by 2024, up from just 20% at the end of last year.
3. Growth Potential in Luxury Resale
According to Business of Fashion research, the secondhand luxury market is experiencing rapid growth, expected to expand from $27 billion in 2020 to $37 billion by 2025. By 2025, pre-owned luxury watches alone may represent one-third of global watch sales. These projections demonstrate substantial growth potential that validates eBay's strategic shift.
II. Fast Fashion's Foray: Tapping Secondhand Apparel While Rebuilding Brand Image
Beyond eBay, fast-fashion leaders SHEIN and Zara have announced entries into the secondhand space with their respective consumer-to-consumer resale platforms. This move serves dual purposes: capitalizing on the growing secondhand clothing market while addressing environmental criticisms.
1. Rapid Growth in Western Secondhand Markets
The pandemic accelerated secondhand market growth in Europe and North America, as reduced incomes and inflation pushed more consumers toward pre-owned goods. ThredUp's research indicates global secondhand sales grew at least 24% in 2022.
2. SHEIN Exchange and Zara Pre-Owned
SHEIN launched Exchange, a C2C platform integrated with users' purchase histories for easy resale, currently available only in the U.S. with planned global expansion. Zara will debut "Pre-Owned" services in November, allowing UK customers to resell, donate, or repair Zara clothing.
3. The Massive Potential of Secondhand Apparel
GlobalData estimates the secondhand clothing market reached $119 billion in 2022—growing three times faster than the overall apparel market. In the U.S., growth rates are eight times faster, with projections suggesting the market could exceed $200 billion by 2026.
4. Environmental Pressures and Brand Rehabilitation
Fast fashion faces mounting criticism for environmental damage caused by wasteful production and consumption patterns. A Wall Street Journal investigation found Americans buy 68 clothing items annually on average, discarding them after just seven wears. Resale platforms allow brands like SHEIN and Zara to address sustainability concerns while pursuing new revenue streams.
III. The Secondhand Market: Opportunities Amid Challenges
While secondhand apparel performs strongly, other categories like sneakers and furniture also show promise. However, profitability remains elusive for many platforms despite rapid growth.
1. Secondary Markets in Sneakers and Furniture
Research indicates the global secondhand sneaker market reached $6 billion in 2019 and could hit $30 billion by 2030. FloorFound found 89% of Americans consider lightly used furniture before buying new, with sofas, coffee tables, and living room chairs being most frequently replaced. Among previous secondhand buyers, 97% will search for used options first.
2. The Profitability Challenge
Despite strong growth, platforms struggle with profitability. Poshmark and The RealReal reported Q2 losses of $22.9 million and $53.2 million respectively, indicating unresolved business model challenges.
3. A Battlefield for Giants and Specialists
The secondhand market remains dominated by major players and niche specialists, presenting significant barriers to entry for startups lacking substantial capital, technology, and operational expertise.
IV. Future Trends in Secondhand Commerce
Looking ahead, several key developments will shape the secondhand market:
- Standardization: Establishing consistent quality assessments, pricing mechanisms, and service standards will build consumer confidence.
- Omnichannel Integration: Blending online platforms' convenience with physical stores' tactile advantages will enhance the shopping experience.
- Technology Adoption: AI and big data will enable smarter product matching, personalized recommendations, and targeted marketing.
- Sustainability Focus: Environmental consciousness will increasingly drive market growth as circular economy models gain traction.
V. Strategic Recommendations
To succeed in this evolving landscape, businesses should consider:
- Identifying specific market segments aligned with their strengths
- Implementing rigorous quality control systems
- Optimizing user experiences through seamless transactions and support
- Developing diversified revenue streams beyond simple commissions
- Cultivating trustworthy brand identities that resonate with eco-conscious consumers
The secondhand market represents both a promising frontier and a complex challenge. Only through continuous innovation and adaptation can businesses navigate these waters successfully.