A business that was not even considered a few years ago, but after the emergence of applications where users buy and sell second-hand products – such as Wallapop or Vinted – and also in the heat of the demand for sustainability, it has become an opportunity to generate income that they did not have before. Multinational retail companies have begun to capitalize on the sale of items from their brands or from third parties that can be given a second life. This is what mass consumer giants such as Inditex, Ikea and Decathlon have done in Spain, but they are not the only ones because other companies, such as H&M, Zalando or Amazon, have also opted for the same strategy.
These companies, rather than talking about a commercial strategy, prefer to define it as a commitment to the “circular economy.” That is what the French chain of clothing and sports products calls it, Decathlon. The company, controlled by the French Mulliez family – the same one that owns other multinational retail companies such as Alcampo or Leroy Merlin – has set up spaces in part of its network of stores to dedicate them to the purchase and sale of these items to which Another opportunity can be given, either because buyers are aware of sustainability, because they are looking for extra income or because they want to buy at cheaper prices.
“If it is clean and in good condition, we will buy it from you,” says Decathlon as a commercial motto. Basically, you do an appraisal and pay the amount to the seller and then resell it. It does not buy everything it sells first-hand, but it does buy a large portion of items, from bicycles to skates, skis, fitness or golf equipment, to tents or surfboards. What price differences can there be? For example, the Spanish subsidiary sells a 20-inch folding bicycle online first-hand for 330 euros and second-hand for 280 euros. Of course, the company itself clarifies that the photographs of the latter “are not contractual.” That is, they do not correspond 100% to the original bicycle.
Provides information about customers
In the case of Decathlon, it speaks of a circular economy project because, in addition to this second-hand sale, it has also launched a process of repairing and renting items, whether bicycles or paddle surf boards. It is offered for days or months, in a type of subscription service similar to that of audiovisual content platforms and that allows you to open a new business avenue.
Something similar happens with Ikea. A few days ago, the subsidiary of the Swedish multinational announced that it was expanding the service of the ‘preowned’ online platform to the entire Spanish territory, which basically allows the purchase and sale of second-hand furniture, but also its donation. Before expanding this activity, he tested it with a pilot test in Madrid. He did something similar in Norway, in Oslo, before launching it to the entire market.
Ikea explains that this model works and also suggests that it is a source of information. A few days ago, it reported that the pilot test has been satisfactory because it has had almost 120,000 visits while it was operational, from August to December, and almost half of the users were people under 35 years of age. And with it the company has been able to analyze the purchasing habits of its customers for second-hand items.
For example, six out of 10 already bought used furniture – Ikea physical stores already had a space for these products – and the best sellers are items for the living room, bedrooms or storage. As for the furniture series, “the best sellers have been Hemnes, Malm and Besta,” he lists.
The Nordic multinational does not give financial details of how much the second-hand business generates. It’s the usual thing. Nor has Inditex broken down, at least so far, financial data on how much Zara Pre-Owned contributes, which allows three types of shares. On the one hand, hire the repair of branded clothing. On the other hand, their donation. Also, the online sale of second-hand clothing or accessories, which must be from the Galician group’s brand.
In its results this year, Arteixo’s company has broken down that, until October, Zara Pre-Owned was operational in 17 countries, including Spain. There are other companies in the textile business, such as H&M and Zalando, that have similar services in place. The latter does indicate in the annual report that, through its platform, it markets nearly 270,000 items.
A business that has grown with inflation
The companies do not give details about how much the sale of second-hand products contributes, but there is analysis from third parties of how much it can mean. In 2022, with the takeoff of inflation, the equivalent of 170 billion euros will be reached worldwide, according to an analysis published by the agency Bloomberg. A figure that represented a 30% increase compared to the previous year, when prices were under control. According to that same analysis, in 2027, the sector’s turnover could take off to 336 billion euros.
Some companies do not reveal exact figures, but they do give clues. For example, one of the managers of Amazon in the United Kingdom quantified its second-hand activity in Europe at close to 1,000 million pounds (around 1,200 million euros) and stated that, in the United Kingdom alone, in 2023 it sold around four million used items, according to the agency Reuters.
That the business works is seen in the valuations of some companies, which are not listed, but have given entry to investors to strengthen their shareholding. One of them is Vinted. The Lithuanian platform sold part of its capital to the firm TPG in Novemberin an operation that was valued at nearly 5,000 million euros. At the moment, Vinted mainly sells clothing, but is exploring expanding its presence in other products such as mobile phones or luxury items, such as watches.
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