Second-hand luxury goods trading is not a new industry. As early as more than a decade ago, Hong Kong's luxury trading platform Milan Station entered the domestic market, and Brandoff, a well-known Japanese antique store, also came to Shanghai to open a store to dig for gold, but at that time, China's second-hand consumer market was not yet mature.
Until five or six years ago, the Internet brought about a wave of boom in vertical segment e-commerce companies. The sharing economy is hot, second-hand luxury goods and ride the sharing economy express train to quickly enter the field of vision of consumers, in 2015, China's second-hand luxury goods platform Fat Tiger was established, in 2016 Feiyu was established, in 2017 Red Brin was established...
The second-hand luxury goods market is obviously hot. Under the epidemic situation, the scale of second-hand luxury goods transactions has not decreased but increased, and the above-mentioned second-hand luxury goods trading platform has established a trading service chain such as selling goods, recycling, consignment, and identification, and is moving forward at full speed.
However, this is also an industry that continues to "explode": Secoo, known as the "first share of luxury e-commerce", recently released its annual report, with a loss of 71.864 million yuan for the whole year, and negative news continued.
On the one hand, the field of second-hand luxury goods seems to be a blue ocean, where everyone can dig a bucket of gold; on the other hand, the industry seems to be approaching winter. The second-hand luxury market, is it an outlet or a bubble?
The "second luxury" is to the left, and the temple is to the right
The luxury e-commerce temple library, which started by second-hand idleness, can be called the "originator" of the second-hand luxury e-commerce industry. After nearly a decade of development, it was listed on the NASDAQ in the United States in September 2017, becoming the "first stock of Luxury E-commerce in China".
However, since the beginning of this year, the direction of Secoo seems to have "changed the sky": it has been exposed to default on supplier payments, arrears of employee wages, no refund of user orders, and no refund of user consignment items. In May this year, Secoo was warned by Nasdaq for failing to submit its annual report in a timely manner. On November 9, Secoo's annual report was late, and the annual report showed that the company's revenue in 2020 was 6.020 billion yuan, down 12% year-on-year, and the net profit loss was 71.864 million yuan, turning from profit to loss year-on-year.
For the decline in performance, Secoo blamed the impact of the new crown pneumonia epidemic on the supply chain and the decline in disposable income of high-end users, in short, in Secoo's view, the luxury business is getting worse and worse.
But what is puzzling is that the data released by the consulting agency Bain is another picture: in 2020, global luxury online sales almost doubled compared with previous years, accounting for 23% of total luxury sales, and the market share of online sales channels is expected to rise to more than 30% in 2025; and Chinese consumers are even more than one-third of global luxury consumption, and by 2025, China will surpass Europe and contribute nearly half of sales to the luxury industry. From a data point of view, this is a market that cannot be ignored.
A foreign luxury store Xinhua News Agency
Secoo, which step is wrong?
"Secoo first started with second-hand luxury goods, but then carried out business model transformation, and is getting farther and farther away from the 'second luxury' industry." Relevant practitioners told reporters.
Indeed, there are indications that the temple is getting rid of the label of "second-hand". Last year, there were media outlets that Siku hid the "second-hand" attribute of consignment goods, and even when searching for "second-hand" in the Siku APP with "second-hand" as the keyword, it could only display an air purifier with the function of "removing second-hand smoke". Nowadays, Secoo positions itself as a "refined lifestyle platform", and in the official introduction provided by the Secoo APP, the word "second-hand" is not mentioned at all.
What is the difference between luxury e-commerce and second-hand luxury platforms?
"Secoo is doing luxury goods trade, but the emerging second-hand luxury goods platforms are mainly retail models." Relevant practitioners explained, such as buying a toy, customers may not be able to confirm its origin, take the goods, true and false before obtaining this commodity, the information between consumers and the platform is asymmetrical, this is the trade model, only simply buy and sell; and the current second-hand luxury goods platform is actually a similar road with offline medieval stores, identifying true and false, identifying color, pricing, and then selling goods through display. Different from physical stores, offline store customers can understand the details of the product by themselves, while online needs to show every detail of the product to the audience through graphics, live broadcasts, etc., which is actually a retail business.
In the final analysis, Secoo and today's popular second-hand luxury e-commerce actually take two paths.
Live broadcast with fire "two luxuries"
Due to the impact of the epidemic, the overseas luxury consumption of Chinese citizens has dropped sharply, and luxury consumption through idle trading platforms has become a new channel, and it is live broadcasting that brings fire to the second-hand luxury goods industry.
Last year, the Shanghai Commission of Commerce and the Bureau of Culture and Tourism issued a number of measures to promote the creation of a live e-commerce platform with national influence, and various "live broadcast +" economic forms have emerged in an endless stream, and second-hand luxury goods are one of the economic forms that stand out.
"Because the second-hand transaction is based on the trust of buyers and sellers, the anchor in the live broadcast allows the buyer to feel the details of the product more intuitively through the all-round display and introduction of the product, so as to make a faster purchase decision." Huang Shichang, founder and CEO of Feiyu, said that live broadcasting is now "standard" in second-hand luxury e-commerce platforms.
Even offline stores do not want to miss this boom.
Second-hand luxury store Vintage Musevie was once on fire for appearing in the TV series "Thirty Only", but because of the epidemic, the store operation encountered a lot of challenges, and co-founder Xie Dongquan began to think about the significance of online for stores. "If the store is the skeleton of the brand, the participation of content output and live broadcasting is the flesh and blood of the brand, giving the store a new soul." Xie Dongquan said that by participating in the filming of TV dramas and conducting live e-commerce activities, Vintage Musevie's store once became an "internet celebrity store", and some customers could not even call the name of the store, directly calling the store "thirty only".
However, second-hand luxury goods are not the same, how to do live broadcasting of this "non-standard product"?
"Unlike traditional perceptions, second-hand luxury goods, which are high-priced and non-standardized categories, are more suitable for live broadcasting." Huang Shichang said that the live broadcast created a feeling that the anchor took the audience to "go shopping", "second-hand luxury goods are biased towards the spirit of consumption upgrades, you need to see to feel." "From the perspective of consumers, buyers need to watch products more intuitively and explain by professional personnel, and live broadcasting obviously has more advantages than graphics and texts; for sellers, live broadcasting is more driven and can become a new way to expand business."
The second luxury platform has opened the live broadcast mode
Nowadays, a live broadcast of Feiyu in the peak period can attract nearly one million viewers, because it brings a stronger sense of experience to the audience, which can greatly increase the conversion rate and repurchase rate, and the data shows that the customer conversion rate of the live broadcast mode is 2 to 3 times higher than that of the graphic form.
This month, iResearch released the "2021 China Idle High-end Consumer Goods Retail Industry Research Report", which shows that second-hand luxury e-commerce has changed the weakness of traditional store recycling scale in the past, but the graphic form of e-commerce restricts consumers' interest conversion path. In 2018, the format of live broadcasting in the second-hand luxury industry quickly penetrated, driving the rapid development of the industry, according to estimates, in 2020, the scale of the second-hand luxury goods market exceeded 50 billion yuan, and it is expected to exceed 200 billion yuan in 2025.
In this way, almost overnight, all second-hand luxury platforms began to march towards live broadcasting.
Dilemma: Difficulty trust level
Risk and return coexist, which is an unbreakable truth in the capital market. This sentence also applies to the second-hand luxury industry.
Behind the fiery market, there are lessons learned from the past of Secoo, and there are problems such as insufficient customer trust and supply chain construction.
True and false are the most concerned issues for consumers shopping on second-hand luxury platforms. Because the production process of luxury goods itself is very complicated, and overseas luxury goods usually have special anti-counterfeiting processes, the identification of professional requirements is high, it is difficult for general consumers to identify themselves; moreover, the luxury goods circulation value is high, and the insured price appreciation is the main feature of which is different from general consumer goods, therefore, there are many counterfeit goods.
The key to solving the problem is to introduce a third-party professional appraisal agency.
"In order to lead the further positive and healthy development of the second-hand luxury goods market, in April last year, the CCPC China Luxury Center officially launched a luxury identification traceability anti-counterfeiting system to the outside world, which can apply one thing and one code patent anti-counterfeiting technology on the basis of identification, which is equivalent to issuing an 'ID card' to each luxury product." Cao Rui, director of the Luxury Appraisal Center of CCIC Group, said that the traceability anti-counterfeiting system can not only verify the identity of luxury goods, but also establish a bridge of trust between merchants and consumers on the second-hand luxury goods business platform.
At present, CCIC has cooperated with many platforms, "when consumers buy luxury goods, try to choose a platform with a sound after-sales service system, through the technical support of quality inspection agencies, consumers can get more perfect protection." Cao Rui suggested.
Building consumer confidence is a challenge for the second-hand luxury industry, and there is still a long way to go.
After solving the trust problem, supply chain construction is the "moat" of the second-hand luxury goods platform.
Compared with general consumer goods, the number of second-hand luxury goods is limited, which is itself the limited production strategy adopted by luxury brands in order to maintain the brand image, which is obviously different from the industrial economy and mass-produced goods; and second-hand luxury goods are more "one thing and one situation", different goods are quite different in the use of use, commodity styles and other details, it is difficult to standardize pricing, resulting in second-hand luxury goods businesses operating efficiency and cost are facing great pressure. Therefore, the construction of supply chain capabilities and the large-scale operation of non-standard products have become the key layout of various second-hand luxury goods platforms.
From this point of view, the answers given by major second-hand luxury goods platforms are also relatively diverse.
Fat Tiger, an e-commerce platform that started with recycling, has adopted a buyout model at the end of the supply chain, recovering luxury goods from small merchants mainly offline, and a large amount of inventory provides a basis for standardization, and uses this to create explosive products and increase transaction volume. On the user side, Fat Tiger launched the luxury appraisal platform "Identification Artifact" and opened up the drainage link from the "Identification Artifact" to Fat Tiger, with about 120,000 to 150,000 single identification per month.
Founded in 2017, Red Brin has now become a popular second-hand luxury goods platform, on the one hand, it provides one-stop consignment services for sellers, using channels such as regular sales and live broadcasting to leverage the consumer market, on the other hand, it provides buyers with perfect identification and pre-sale and after-sales service, and comprehensively handles commodity identification, new and old ratings, basic information and pricing, etc., and cooperates with the appraisal team to ensure the transparency of the whole process.
Feiyu reorganized the supply chain, linking merchants, individual trading users and platforms through the SaaS (Software as a Service) system, improving standardization capabilities to bring convenience to the efficiency and circulation of the entire industry. Today, Feiyu has cooperated with more than 5,000 offline traditional merchants, more than 1,000 have in-depth cooperation, and opened self-operated offline stores, which currently has more than 5 million high-end users.
"The difficulty of second-hand luxury goods transactions is actually higher than that of general consumer goods, involving many links such as selection, identification, pricing, warehousing, sales and after-sales, only by completing the standardization of the supply chain, realizing commodity formatting and intelligence, improving transaction and delivery efficiency, and shortening the time of each link, can we reduce operating costs as a whole and build a good moat." Huang Shichang said.
Take the road of circulation
"Second-hand luxury consumption reflects the circular economy that advocates environmental protection." Huang Shichang said that the second-hand circular economy has opened a new cycle of product life cycle, continuing the use value of products, not only environmental protection, but also reducing the economic pressure brought about by enjoying luxury goods.
In recent years, the low-carbon economy and green consumption have gradually become a consensus, and government departments at all levels have also attached great importance to it, and have successively introduced a series of policies to guide the development of green consumption.
In February this year, the State Council issued the "Guiding Opinions on Accelerating the Establishment and Improvement of a Green and Low-carbon Circular Development Economic System", which included the standardization of the development of idle resource transactions in the national strategy; in July, the National Development and Reform Commission and other departments issued the "Notice of the 14th Five-Year Plan for the Development of the Circular Economy", encouraging and supporting the "Internet + second-hand" model, clearly proposing to improve the circulation regulations of second-hand commodities and standardize the circulation order and trading behavior of second-hand commodities. The release of the notice will undoubtedly guide the development of domestic second-hand luxury goods trading platforms in a more standardized direction.
In August, the Shanghai Municipal Government issued the "Shanghai Municipal Implementation Plan for Building an International Consumption Center City", in which "advocating green and low-carbon consumption" was listed as one of the 28 main tasks. The measures advocated by governments at all levels to support green consumption have provided a great policy guarantee for the benign development of idle resource transactions.
With the east wind of the policy, the development momentum of the second-hand luxury goods market is also rapid. In May this year, only two received tens of millions of dollars in Series C financing; in June, Feiyu completed nearly $30 million of Series B financing, Fat Tiger Luxury completed nearly $50 million of Series C financing; in September, Burst Luxury announced the completion of the A+ round of financing of 100 million yuan.
Huang Shichang believes that while the industry is developing rapidly, it also needs to be further regulated. From the perspective of foreign related industry development experience, as early as 1947, the Japanese idle medieval luxury store Big Black House, which is mainly engaged in the pawn, acquisition and sales of luxury goods such as brand bags, was established in 2009, the global second-hand fashion boutique platform Vestieraire was established, and in 2011, the American second-hand luxury e-commerce company The Realreal was established. So far, it has formed a mature industry ecology. The domestic second-hand luxury goods market, how to establish a perfect and consistent industry standards, the formation of a mature market system, there is still a large room for improvement.
Column Editor-in-Chief: Li Ye Text Editor: Ju Hefei Title Map Source: Courtesy of the Interviewee
Source: Author: Ju Hefei