Chinese consumers’ enthusiasm for luxury goods is well known around the world. According to the 2017 China Luxury Report released by McKinsey, Chinese consumers spend more than 500 billion yuan on luxury goods every year, accounting for one third of the global luxury market. After Japan, China has become the world’s largest consumer of luxury goods in just a few years, and is expected to account for 44% of the global market by 2025.

Luxury goods, like works of art, have collection value and still have high value in secondary circulation, especially limited edition luxury goods, which may even be higher than new products after entering the secondary market. Luxury consumption boom also means that the ownership of luxury goods in continue to rise, there are, according to data from 2007 to 2016, nine years, domestic second-hand luxury handbags stock more than one trillion yuan, but the number of bags into the secondary market is only 3% to 5%, with the mature development of second-hand luxury markets such as Japan, the United States than there is a large rise space, Second-hand luxury this huge cake is also very attractive daydream.

With the upgrading of consumption and the popularity of the sharing economy, young consumers have changed their consumption concepts and become more receptive to second-hand goods trading and rental consumption. With the help of taobao, JINGdong and other large e-commerce platforms, consumers gradually increase the frequency of purchasing luxury goods online. Second-hand trading platform xianyu, zhuan and other development in full swing. All these are positive factors for second-hand luxury e-commerce.

A large number of platforms have emerged, with B2C and C2B2C models competing for second-hand luxury e-commerce market

Under the opportunity of changing consumption concept and surging ownership of luxury goods, A number of second-hand luxury e-commerce companies have emerged in China, which are well recognized by capital and have obtained financing in succession. Among them, Aiding Cat obtained A round of financing of 1.35 million US dollars in September last year. Secoo also successfully went public in the US this year.

Domestic second-hand luxury e-commerce is mainly divided into B2C and C2B2C modes. B2C second-hand luxury e-commerce merchants, such as Clothes and trousers, only sell second-hand luxury goods without recycling. Their products are all from foreign buyers or sample clothes in luxury stores. The products almost cover all famous foreign designer brands with great discounts. However, clothes collection only sells second-hand clothes, and there is only one piece for each product. Although users do not need to worry about matching clothes, they may face the situation that they like the style but cannot buy the right size.

There are relatively more e-commerce in C2B2C mode, including Edingmao, Xinxin and other platforms. Secoo was also a second-hand luxury e-commerce provider in this mode before the transformation. This type of e-commerce platform can sell and recycle second-hand luxury goods. Users can choose to sell them to the platform at a discount, or sell them on the platform as a consignment. After the successful sale, the platform will charge corresponding commission fees for profits, and users can withdraw the consignment goods at any time. In terms of recycling identification services, some platforms have offline luxury inspection shops, such as Secoo and Panghu, while platforms such as Edingmao provide remote identification services. In addition, platforms such as Xinxin will also provide luxury goods maintenance services to increase user loyalty.

However, affected by the demand of domestic consumers, different from platforms such as clothes and trousers collection, platforms such as Panghu that both recycle and sell mainly recycle popular or limited edition second-hand luxury goods, focusing on style rather than the quality of goods. Goods in other than these two categories will be discounted or not recycled.

The emergence of second-hand luxury e-commerce undoubtedly enables consumers who want to buy luxury goods for various reasons but cannot afford to buy new ones to own luxury goods at a relatively low price and within their acceptable range. At the same time, the emergence of second-hand luxury e-commerce can also enable more luxury owners to cash out by selling idle luxuries to buy new ones. Although second-hand luxury looks promising, it has never taken off, far from the expectations of its practitioners.

Limited by the service, second-hand luxury e-commerce development dilemma

The starting point of second-hand luxury e-commerce is good, but it is not for nothing that the domestic scale has not been expanded so far. The transformation of Secuk.com, which has come a long way in the past ten years, undoubtedly shows the constraints of second-hand luxury.

First, in the context of consumption upgrading, although many middle class with assets no longer value consumption by price, and young consumers have improved their acceptance of second-hand luxury consumption, the impact of new consumption concepts is that brand consumption frequency decreases and quality consumption frequency increases. Although watches and other luxury goods are in direct proportion to their quality to some extent, the quality of clothing, shoes and bags may not be in direct proportion to the brand. For the rich, luxury goods are also FMCG products.

The psychological cleanliness of Chinese consumers is very serious, and they are resistant to using shared washing machines, let alone buying clothes worn by others. It will take a long time to cultivate this concept. Besides luxury goods, consumers have more choices. The rise of quality e-commerce, such as Yanxuan NetEase, which emphasizes quality over price, is one of the choice trends in the context of consumption upgrading, while customized platforms can also be regarded as the second choice.

Second, second-hand luxury goods recycled by secu and other second-hand luxury e-commerce providers are sold at a very high price when entering the secondary market, which is almost the same as the price of foreign new products. At the same time, domestic consumers of luxury goods, also let a lot of luxury brands such as Channel bring China into the global development plan, the domestic price of luxury goods is gradually with foreign luxury goods price is leveling off, and in the past actively overseas buy luxury goods consumers have gradually turned back to the home, in this case I’m afraid consumers are more willing to add money to buy new products.

Third, although the development of the luxury industry is hot, it is obviously unreasonable to equate the development prospect of luxury goods with the second-hand luxury market. The growth of domestic luxury goods is not proportional to the growth of idle luxury goods. At present, the luxury goods sold in China are mainly consumable luxury goods, with a high damage rate. In addition, the consumption of domestic consumers on new luxury goods is still in the irrational consumption stage, so there is no surplus of idle luxury goods in the domestic luxury market.

Fourth, for the second-hand luxury industry, service is undoubtedly the top priority, especially for e-commerce. However, in addition to the many industrial problems of domestic second-hand luxury e-commerce, there are problems in various services from identification, maintenance to sales on all platforms. On the one hand, China is the largest manufacturer of counterfeit luxury goods. Public data show that only 40% of the inspected luxury goods in 2016 are genuine. The second-hand luxury market is a mix of fishes and fishes, and e-commerce is the largest channel for the circulation of counterfeit goods. However, there is a lack of formal appraisal institutions and senior appraisers in China. The appraisal teams of each platform are all from third-party appraisal institutions, and the authenticity of appraisal is doubtful. Difficulty in appraisal is one of the great obstacles to the development of second-hand luxury e-commerce.

Domestic second-hand luxury platform, on the other hand, the lack of luxury maintenance, cleaning and maintenance, renovation of professional ability, in all the complaints about second-hand luxury electric business, the platform fakes, recycling second-hand luxury is not according to the storage, maintenance, maintenance standard consignment goods after withdrawal, luxury goods increase more complaints such as wear and tear, It can be seen that domestic second-hand luxury e-commerce only provides a trading platform, and the professionalism of service needs to be improved.

Compared with the development environment in Japan, it is still far from the explosion of second-hand luxury e-commerce in China

Many people like to compare China’s second-hand luxury market with Japan’s, believing that the scale of China’s second-hand luxury market will soon approach That of Japan. However, in fact, the two are not comparable at present. While domestic consumers’ enthusiasm for luxury goods is similar to Japan’s economic boom of the 1990s, the environment for second-hand luxury goods in the two countries is very different.

First of all, The prosperity of second-hand luxury goods in Japan relies on the long-term and orderly development of the whole middle Ages (second-hand goods) market. Japan has a large number of second-hand goods shops, which shows that people have formed the habit of consuming second-hand goods. Some consumers even choose second-hand goods instead of consuming primary goods.

Secondly, perhaps due to the lack of land and resources, Japanese people attach great importance to the reuse of goods. In addition, Japan needs to pay relatively high fees for garbage disposal, so people are more willing to donate unused goods to others and let valuable items enter the secondary market.

Finally, Japan’s second-hand luxury industry has strict industry order and norms in the process of identification, recovery, maintenance and resale. The standard for becoming an appraiser is also very high, and the requirements for practitioners’ credibility are also strict. Therefore, there is no fake goods circulating in the market. Japan middle market, not only is the maintenance of second-hand luxury goods is very good, such as books and other general daily consumer goods quality is also very high, from the Middle market in Japan to buy a book published in 99 new books, the new degree is the same as new books. And inexpensive, it is many domestic consumers are willing to travel thousands of miles through the daigou platform, or travel to Japan to buy medieval goods.

By contrast, not only the domestic second-hand luxury market, but the whole second-hand trading market is in a state of disorder without supervision. Transactions on platforms such as Xianyu and Zhuan often have integrity disputes, and the same is true for second-hand luxury e-commerce. The domestic market does not have the same development environment as Japan, and there is no way to say that it will soon explode like Japan’s second-hand luxury market.

conclusion

Compared with offline, online identification of second-hand luxury goods is more difficult. The credibility problem is one of the factors restricting the development of second-hand luxury e-commerce. Enterprises cannot guarantee the compliance of free platform transactions, so it is also difficult to promote the orderly development of the industry. At present, the development of the domestic luxury industry brings the hope of false prosperity to second-hand luxury e-commerce enterprises. In order to welcome the boom of second-hand luxury e-commerce enterprises, in addition to the increase of real idle luxury goods, the maintenance of market integrity, luxury identification, maintenance and other professional improvement are necessary.

Data show that the penetration rate of domestic luxury e-commerce will reach 15% in three years, with a scale of about 40 billion yuan, while the offline luxury transactions will reach 230 billion yuan. Luxury transactions are concentrated offline, and the ceiling of second-hand luxury e-commerce is very low, which shows that the future development and growth of second-hand luxury market will be offline. However, the asset-heavy mode of offline will also be a big challenge for online second-hand luxury e-commerce, which still have difficulties in making profits.

Liu Kuang, meditation on the Internet, wechat official account: Liukuang110