In the past, it was generally believed that the purchase of second-hand luxury goods was due to insufficient budget, but in recent years, with the transparency and marketization of second-hand cars, second-hand electronic products and other industry transactions, second-hand goods have gradually been accepted by consumers, coupled with the concept of green consumption that the state has been advocating and the concept of carbon neutrality that has been hot in recent years, consumers' acceptance of second-hand products is getting higher and higher. On the other hand, the Chinese market will become the largest market for luxury goods in the world. The supply side is sufficient, and the concept of consumption is also changing.
According to Bain's "China's Luxury Market is Unstoppable in 2020", the proportion of domestic consumption of luxury goods in China in 2020 will significantly exceed the proportion of overseas consumption of luxury goods, reaching 70%-75%. There are three main reasons for the return of luxury consumption scenes to domestic scenes: luxury brands actively control the price difference between domestic and foreign luxury goods in order to stimulate consumption, and the price difference is narrowed and generally controlled at 20-30%; the epidemic that spreads around the world has blocked domestic consumers from being satisfied in china, and this consumption habit will continue in the post-epidemic era; the development of the tax exemption policy for the outlying islands of Hainan Island has enabled Hainan Island to undertake a large number of domestic luxury consumption demand. Benefiting from the growth of luxury consumption in the domestic scene, the domestic consumption of idle luxury goods has achieved considerable growth.
The second-hand luxury goods market is like an iceberg, Liu Tianjie, investment director of Huaying Capital, once said that many people see only 10% of the online traffic, and 90% of the transactions of second-hand luxury goods are completed offline. Underwater is the main body of this "iceberg". However, after the continuous education of the domestic idle high-end consumer goods retail trading platform in online and offline omni-channel, potential consumer groups with different consumer demand and behavior characteristics have gradually changed their cognition, and in the future, more and more consumers will accept the concept of idle trading and try idle transactions, and a good trading experience will help consumers to trust the platform and develop idle consumption habits. At the same time, the change of cognition will help the idle high-end consumer goods retail industry to solve the pain point of supply and promote the positive cycle of transactions.
Tata, the operator of a chinese antique store in Beijing, revealed that millennials have become the main force in consumer luxury goods, and more and more people are accepting medieval bags. "We provide the best description of the value provided by buyers, the product is the best description, customers can buy cost-effective second-hand luxury goods on our side, and quality can help us do high repurchase and retention."
The development of second-hand idle industries has cultivated new high-end fashion consumer groups, and further promoted the development of new high-end fashion brands. This, coupled with the fact that Kering group has invested in Vestiaire, is evidence that this partnership is deeply rooted.
In September 2021, Vestiaire Collective, a second-hand luxury trading platform in France, announced that it had raised another €178 million in a new round of funding, just six months after the previous round. This brings Vestiaire Collective's current valuation to $1.7 billion. Vestiaire Collective also raised €178 million in its last round of funding in March, with investors including Tiger Global and Kering. As a result, Kering became the first luxury brand to take a stake in Vestiaire Collective. It can be seen that the second-hand luxury goods industry has gained certain recognition from the primary market.
Huang Shichang, founder and CEO of Feiyu, believes that idle luxury platforms and luxury brands are cooperative, co-promote, rather than competitive. "I believe that the more participants, including luxury brands, and the more dimensions of participation, the more the industry can develop in a healthy and orderly direction."
Tata also makes no secret of the fact that the new generation of consumers tend to trust some big platforms more, but physical stores are becoming more and more difficult to do. "This makes us very strange, after all, I am a physical store, in the past, this kind of products everyone preferred offline trading, touching that sense of reality, but now I find that some people will be more willing to believe in some of the big online platforms." That's why I'm working with some platforms. Because this is the case with the recent shift in consumption, we can only follow the trend. However, he also believes that the boundaries between online and offline will become more and more blurred in the future.
Compared with standardized high-end consumer goods, the requirements for platform operation capabilities of non-standardized high-end consumer goods are more complex. Huang Shichang, founder and CEO of Feiyu, believes that due to the commodity characteristics of non-standardized high-end consumer goods, retailers of idle high-end consumer goods that are in the category range need to have professional identification capabilities, accurate pricing capabilities and differentiated operational capabilities.
"In our industry, the previous year (2020) was indeed a peak, because everyone could not go out due to the epidemic, so there were many people who poured in when demand was raised. But many of them are not experienced enough to stay in this market, and can only make some quick money and then end it hastily. Tata believes that some of the chaos in the industry also has a lack of regulation.
Huang Shichang told The Moving Point Technology that the current idle luxury industry supply chain is still relatively scattered, Concubine Fish through the integration of B, C two ends and the expansion of new product categories, restructuring the supply chain, using the SaaS system to complete the trademark formatting and improve the efficiency of intelligent matching of goods, build a service middle office, improve the efficiency of goods turnover and business performance efficiency; and the industry still has the problem of mixed merchants and inconsistent authenticity identification standards, in this regard, Feiyu is actively cooperating with third-party professional authorities. Platforms such as the CcB Zhongzhu Luxury Center and zhongshou.
Moreover, due to the high threshold of the luxury industry and the emerging industry, live broadcasting is an emerging industry, so there is a relative shortage of high-end talents in the industry. "In terms of anchors, Feiyu has a complete SOP system such as screening, training and growth, and Feiyu cooperates with art universities to establish talent training bases, and cooperates with the State Administration of Radio, Film and Television to send professional luxury anchor talents; in terms of appraisers, Feiyu's appraisers need to be certified by the CCIC and train appraisal talents in cooperation with China Luxury Chuang."
Huang Shichang also admitted that there are still some problems in the supervision of the second luxury market that still need to be improved. For example, the recovery business model, the challenge of VAT implementation; there is also a lack of unified pricing standards, the lack of supply chain finance; on the talent side, there is also a lack of detailed identification standards.
In this regard, iResearch mentioned that the growth logic of the idle high-end consumer goods retail business is closely related to the continuous improvement of the transaction efficiency and performance efficiency of idle high-end consumer goods retailers in the medium term. Based on this, the head idle high-end consumer goods retailers should improve their overall business performance capabilities through the standardization of supply chain business processes and the completion of efficient internal supply chain road construction; and lay out online and online channels to improve the overall business transaction efficiency through the business strategy of omni-channel integration; finally, the internal and external business optimization and cooperation continue to strengthen their brand service capabilities to provide consumers with a foundation of transaction trust.
Therefore, with the completion of the supply chain construction of the idle luxury goods trading platform internally, the completion of omni-channel integration and the strengthening of brand service capabilities externally, the industry concentration is expected to further increase.
Note: At the request of the interviewer, Tata is a pseudonym.