STORY: A year ago, a shopping trip for Shanghai resident Wang Jianing would likely have involved standing in queues
at the glitzy flagship stores of global luxury brands, in search of the latest season’s handbag.
But these days, the office worker is exploring this warehouse and shop space of secondhand luxury goods marketplace ZZER.
"My consumption is definitely downgraded this year, but I still like what I like - I can't control my shopping urges. So, I think this kind of platform with second-hand items is great.”
ZZER started as an online platform in 2016.
The name translates to “only two” - referring to secondhand goods.
It began opening brick and mortar stores in Shanghai and Chengdu last year.
And is now looking for more shop space in Beijing, Guangzhou and Shenzhen.
China's economic slowdown – fueled by the global health crisis – is proving to be a boon for the company's founder, Zhu Tainiqi.
And it’s not only due a surge in interest from belt-tightening shoppers.
"On the consignor side, because the economy has slowed down, they will think, 'Why not sell the luxury goods sitting idle at home?'"
The 33-year-old former venture capitalist says the number of ZZER's consignors, or people putting up their goods for sale, has soared 40% so far in 2022 over the same period last year.
The platform now has 12 million members and expects to sell 5 million luxury pieces this year.
For some, like shopper Isabel Shi, the change in consumption habits also comes after months of intense lockdown in Shanghai.
"My desire for material goods is reduced. I mean, if you could wear your pyjamas for three months at home..."
The trend points to a key change in China's $74-billion luxury goods sector, where the secondhand sub-segment has been slow to take off, versus other markets such as Japan and the U.S.
That’s in part due to a preference for newness and fears of being sold fakes.
This could prove a challenge for the China-focused strategies of the world's major luxury goods makers, who are already grappling with softening demand.
Though Iris Chan, a partner and head of client development at consultancy Digital Luxury Group, believes the luxury resale subsegment is still niche.
"Overall, the high-end market in China is still expected to grow, whether that's resale or new luxury, I just say that maybe the middle-class, younger generations are perhaps not buying new luxury as much in this moment of being more measured about their pockets.”
ZZER and other top luxury resale platforms such as Feiyu, Ponhu and Plum are all homegrown.
Each drew tens of millions of dollars in venture capital funds in 2020 and 2021, with an eye on improving authentication practices.
According to consultancy iResearch late last year, China's secondhand luxury market is tipped to grow to $30 billion in 2025, from $8 billion in 2020.