While Chinese consumers are struggling, the country’s secondhand luxury market is reportedly thriving.
As the Financial Times (FT) reported Sunday (Nov. 24), companies such as Cartier owner Richemont, Gucci parent Kering and LVMH have all recently recorded declining sales in the Asia-Pacific region (except Japan), which is dominated by China.
Richemont’s CEO, the report said, has warned that the Chinese consumer slowdown “is probably a mid- to long-term phenomenon.”
At the same time, the FT added, there are indications that consumers have a healthy appetite for secondhand luxury goods.
In September, Zhuanzhuan Group, an online marketplace for used goods, acquired luxury resale platform Hongbulin. The wider market for these products has more than tripled since 2015, the report said, citing data from consulting firm Frost & Sullivan and Tsinghua University.
While there isn’t much recent data on the secondhand luxury market, the FT said, there has been an uptick in users of online platforms such as ZZER and Xianyu that offer a venue for people to resell luxury goods for a commission.
The ZZER store in Shanghai, which opened in 2022, says it receives 5,000 new products per day, showcasing the sheer volume of handbags and high-end clothing in circulation in China.
Jacob Cooke, chief executive of Beijing-based marketing group WPIC, pointed to “growing interest in secondhand luxury as a cost-effective alternative” during the COVID pandemic, which prompted travel restrictions that kept people from buying goods abroad.
In other news from the luxury world, PYMNTS wrote recently about a series of mergers and partnerships in the sector, happening in response to a decline in consumer spending in key areas like China and the U.S.
By sharing resources and insights, companies like Mytheresa and Authentic Brands Group are setting themselves up to thrive amid ongoing market challenges, highlighting the key role of innovation and adaptability in the luxury sector’s future.
In an interview with PYMNTS, Amanda Lai, a retail analyst and director for consultancy McMillanDoolittle, said that — considering the global luxury market’s forecast for slower growth, particularly in the U.S. and China — luxury brands are relying on partnerships and acquisitions to stay competitive and drive growth.
“Mytheresa’s acquisition of Yoox Net-a-Porter is a prime example of how companies are partnering to create operational efficiencies, scale operations and expand their reach to multiple segments of luxury consumers,” Lai said. “The combined entity can likely reduce costs by consolidating many of its back-end business functions, such as legal, IT and human resources while leveraging its multiple brands — Mytheresa, Net-A-Porter, and Mr. Porter — to reach different high-end consumers.”
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