The rise and rise of second-hand fashion
There has always been a market for second-hand clothes, whether the hand-me-downs of old, the charity shops on every high street in the country or the selective vintage shops of larger towns. However, recent years have seen a paradigm shift in secondhand apparel as retailers have moved online and developed a meta-trend of sorts.
The problems of second-hand clothing are well documented. Each year the fashion industry produces a staggering 100 billion new garments with 70% to 80% of this going to landfill or being burnt. On top of this the UK is one of the worst offenders – in this country we are sending 10,000 items to landfill every 5 minutes. Ironically, the mountains of clothing shipped to countries like Ghana and Kenya – literally destroys local textile economies in the process.
What has happened in this industry in the last 10 years is both staggering and testament to massive shifts in consumers behaviour. According to Statista.com the global market for second-hand apparel and resale is now worth circa $177bn USD today and will double to $351 billion USD by 2027.
The US market was the first to show the rise of the secondhand clothing market, with the likes of Ebay, Preloved and ThredUp growing very quickly in the last 5 or 6 years. The USA is currently 42% of the global market with reselling now accounting for 10% of all clothing with sales and growth rates showing no signs of slowing down. According to an internal report by ThredUp , the online US resale market is expected to reach $64bn USD by 2024. The report also stated that the online resale market had been growing 21 times faster than traditional retail over the previous three years.
The UK has quickly followed the USA with major brands such as Depop, Vinted, Thrift+ and GoThrift emerging in the last few years. What is staggering is the growth rates of these companies. You now have an industry which is growing 3x faster than the fashion industry in general and an industry that is predicted to outstrip the fast fashion segment by 2030. To put the environmental benefits of this shift into context, each second hand clothing purchase displaces 8 kg of Co2 and reduces emissions relative to a new garment by 82%.
What you have driving the resale phenomenon is a paradigm shift in consumer behaviour, put the cost-of-living crisis on top of this and it makes the market dynamics of secondhand clothes a perfect storm. There are a number of changing factors underpinning the hypergrowth of this market including increased environmental consciousness, desire for unique and affordable fashion and the convenience of online shopping platforms. For example, a recent report from On Device Research found that sustainability is still at the forefront of consumer mindsets with 65% of British consumers making more sustainable choices in general and 55% willing to pay a bit more for sustainable brands. In the case of clothes, reselling customers are obviously paying a lot less for brands in general or buying brands they would not normally be able to afford - a compelling proposition of affordability and value for money.
It’s worth noting that in recent years, a significant trend has emerged among Gen Z consumers (those born between 1997 and 2012) as they veer away from fast fashion and embrace pre-loved or second-hand clothing. On Love Island’s (a show known for it Gen Z following) promotion of ‘pre-loved’ clothes in 2022 Ebay saw a 7000% increase for second hand clothing on its site.
This shift is motivated by Gen Z's heightened awareness of the fashion industry's environmental impact. Additionally, the influence of social media platforms like TikTok has played a significant role in promoting sustainable fashion content, including showcasing thrift shopping hauls and DIY fashion projects.
As a result, Gen Z has been inspired to adopt a more mindful approach to fashion consumption. Additionally, the affordability of secondhand clothing aligns with the financial constraints faced by many young individuals. A survey conducted in 2022 by Earthtopia, a prominent eco-community on TikTok, revealed that 96% of UK Gen Z and millennial consumers believe that the high cost of living impedes their ability to make sustainable purchases. The survey conducted by Earthtopia also highlighted that for 77% of Gen Z, who are more likely to view affordability as the key advantage, buying secondhand clothing is not just a climate-conscious choice for engaged eco-consumers but rather a norm in their everyday lives.
What is clear is that some huge companies will emerge from this space in the next decade as reselling achieves the scale associated with the largest high street fast fashion operators. The potential scale of some of these resellers is eye watering even if secondhand clothing starts to plateau at 10% of total fashion sales, however at the current growth rates it looks as though it will become far greater than that as a percentage of the market.
To put this into context just looking at H&M for 21-22 – the company had £17.7bn GBP of sales. In the UK, the fashion e-commerce segment generates a revenue of $37 billion USD in 2021, which amounts to a 31% share of the entire e-commerce market in the United Kingdom. Looking at the size of the fashion market it looks a foregone conclusion that some of the resellers operating in the UK will breach billions of GBP in turnover in the next decade.
One business that is enjoying immense success in the pre-loved space is OnePlanetCapital portfolio company, GoThrift . GoThrift, a North West England based company, has experienced staggering growth - in just 3 years they have managed to expand the team from just four founders to a workforce of 40 people. Recently released data highlights the scale of their operations with over 20,000 individual items uploaded per month on their website. The company has now sold over 300,000 items since launch and are on track for £4.4 million revenue in 2023, a rise of 175% year-on-year.