How E-Commerce Is Helping China Overcome A Fear Of Second-Hand Clothing
Tainiqi Zhu admits that the Chinese market might not be ready for second-hand clothing, but he’s willing to make a bet on its potential.
“In mainland China, there’s a problem of trust and communication,” says Mr. Zhu. “And even after you convince someone, you still have to negotiate the price. There’s a huge culture of bargaining.”
Mr. Zhu’s self-funded startup, Share2 (只二), is a platform where users can buy and sell second-hand clothing. Unlike C2C platforms, such as 58.com or Ganji.com, Share2 takes a more active role in processing seller items. The startup will clean and iron clothing, photograph them, estimate their value, and upload the product details onto their platform. If buyers have any issues with purchased clothing, Share2 serves as their point of contact.
China’s growing middle class shells out more than $55 billion USD for luxury products, according to Bain & Company China, but when it comes to non-luxury second-hand goods the market is lukewarm.
Cultural factors play a part. Unlike luxury goods, the savings on second-hand clothing are in the tens and hundreds of RMB, not thousands. For consumers who are part of China’s “bargaining culture”, second-hand clothing holds less appeal.
“Companies like Share2 need to cultivate the Chinese attitude [towards second-hand clothing],” says Mr. Zhu. “This will take time and money. We need to show that buying second-hand clothing isn’t shameful, it’s a very cool lifestyle.”
“It just takes time . The market is not mature enough,” says Bunny Yan, CEO of Squirrelz, a platform for upcycled, recycled, and other eco-friendly products. Ms. Yan says the market is growing, despite cultural barriers. “In the beginning, [our customers] were 80 percent foreigners, 20 percent Chinese, but now it’s 50-50.”
Most of Squirrelz’s customers in China are returning from abroad, highly-educated, or Western-influenced, she says. “We don’t really have the masses from China, the aunties, who have the habit of only going for price.”
Mr Zhu. says marketing second-hand goods specifically to Chinese consumers is the key. The platform is advertised as a money saving tool, that can help users “find cash in your closet”, a stark difference to western platforms touting cool, vintage clothing as their core selling point.
Instead of using the Chinese word for “second-hand”, Share2 opts for the term “old love.” Share2’s website is also deliberately simple, designed to look like the website of a clothing store, not a second-hand goods marketplace. Goods are also categorized by preferential brands, including H&M and Zara, and are only accepted in new or like-new condition.
Currently, the company is self-funded by Mr. Zhu and his team. After launching the mobile version of Share2 next week, the company will start seeking investment.
The number of sales platforms for second-hand goods in China is increasing steadily. In 2014, Secoo, a second-hand luxury goods platform in China, raised $100 million USD in Series D financing. Micro-shop platforms including those owned by Tencent and Alibaba have also provided new avenues for consumers to sell their second-hand goods.