Traditionally, second-hand or vintage apparel was not thought to be desirable for the average consumer in China, especially during the economic good times of the past few decades. However, the popularity of second-hand, resale and pre-owned goods platforms has taken off in recent years, especially among Gen Z shoppers, driven by growing environmental concerns and depressed consumer confidence caused by rising unemployment and the ongoing real estate crisis.

Data show that the value of the second-hand goods market rose from RMB 300 billion (£32 billion) in 2015 to RMB 1.05 trillion (£112 billion) by 2020, and according to a 2021 report released by consulting firm Frost & Sullivan and Tsinghua University’s Institute of Energy, Environment and Economy, it is expected to reach nearly RMB 3 trillion (£320 billion) in 2025. Luxury resale, in particular, is having a moment, with many sellers successfully using platforms like Douyin and Xiaohongshu to boost their sales.

China also has a number of popular second-hand apps, including Plum (Hongbulin), Alibaba-owned Idle Fish (Xianyu), and Tencent-backed Zhuan Zhuan, which appeal to the well-established e-commerce habits of Chinese consumers. Idle Fish and Zhuan Zhuan are consumer-driven marketplaces (similar to Vinted or Depop), while Plum manages the whole consumption process, from authentication for luxury goods to photography to logistics.

In October 2024, Zhuan Zhuan acquired Plum, signalling a shift in the second-hand e-commerce sphere. The combination of Plum’s luxury fashion expertise and Zhuan Zhuan’s authentication expertise (Zhuan Zhuan previously mainly focused on pre-owned electronics, in which authentication and testing is particularly important) could create the platform that finally takes the lion’s share of the second-hand luxury market in China. It will also create further challenges for international second-hand luxury platforms, which have so far struggled to thrive in the Chinese market.

What is driving the growing appreciation of second-hand clothing and goods?

Pre-owned luxury goods are driving a lot of growth in China’s second-hand market, with resale luxury alone predicted to grow to RMB 217 billion by 2025 (£23 billion). As in most countries around the world, the excitement of finding a desirable bag or pair of shoes at a more accessible price is a big reason why many Chinese consumers browse second-hand apps or stores. Moreover, savvy Chinese consumers understand that a high-quality luxury purchase – a Hermès Birkin bag, for example – may even appreciate in value as the years go by.

However, second-hand luxury goods platforms have always struggled with questions about authenticity and counterfeiting. A survey by iiMedia Research found that lack of trust and fear of receiving counterfeit goods stopped over 30% of people from using second-hand platforms. In response, in March 2023, Idle Fish bolstered its authentication capabilities, allowing users to authenticate over 18 million different items in as little as eight hours.

Beyond luxury goods, a growing awareness of the environmental impact of consumerism – especially among Gen Z/younger millennial consumers – is leading conversations about second-hand clothing in China.

A June 2022 consumer survey by PwC showed that 34% of Chinese consumers “often” or “always” agree that a business’ environmental actions influenced their decision to buy – in the US, this figure was just 29%. The Covid-19 pandemic also seems to have accelerated this trend. For example, a KPMG study in 2021 found that since the beginning of the pandemic, 65% of consumers from Greater Bay Area cities have become more conscious of a product’s origins.

Idle Fish claims that the platform and its users reduced three million metric tonnes of carbon emissions over the past year by shopping second-hand instead of buying new.

However, as Zhang Na, founder of sustainable fashion brand Reclothing Bank, pointed out in a recent interview with Tong, second-hand and vintage clothing is also an outlet for creativity and self-expression. “[Previously], the marketplace was conditioned to encourage those consumers [born in the 70s and 80s] to express themselves through luxury brands and a pursuit of upward mobility,” she says. “Now, the new generation of consumers care more about their own unique experiences and identities.”

What are the implications for British brands?

Chinese consumers may be cutting back on new luxury purchases, but the rising popularity of second-hand shopping also presents opportunities for British luxury brands. Effective storytelling about heritage and craftsmanship can encourage consumers to view a brand’s products as an investment. Brands can also consider providing authentication services to ensure that the second-hand products circulating in the market uphold brand standards.

Moreover, this trend emphasises the importance of incorporating conversations about sustainability into marketing in China in an authentic way. This can include working with influencers or key opinion consumers (KOCs) who talk about sustainability.

Moreover, it underscores that Chinese consumers are cost-conscious but willing to spend money on high-quality items.

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Turn on the TV in the UK recently, and you will struggle to miss the adverts for resale platforms like Vinted and eBay. Millions of people have started buying and selling second-hand apparel, homeware and more amid growing environmental concerns and a severe cost-of-living crisis.

In China, although second-hand or vintage clothing has not traditionally been desirable for the average consumer, the resale market has also been taking off in recent years.

Data show that the value of the market rose from RMB 300 billion (£32 billion) in 2015 to RMB 1.05 trillion (£112 billion) by 2020, and according to a 2021 report released by consulting firm Frost & Sullivan and Tsinghua University’s Institute of Energy, Environment and Economy, it is expected to reach nearly RMB 3 trillion (£320 billion) in 2025.

Much of this growth has been supported by apps like Plum (Hongbulin), Alibaba-owned Idle Fish (Xianyu), and Tencent-backed Zhuan Zhuan, which tap into the well-established e-commerce habits of Chinese consumers. Idle Fish and Zhuan Zhuan are consumer-driven marketplaces (similar to Vinted or Depop), while apps like Plum manage the whole consumption process, from authentication for luxury goods to photography to logistics.

Idle Fish’s user base surpassed 500 million in May 2023, and the platform recently introduced a social commerce element via a community forum called Seafood Market, where users can discuss hashtag-based topics. The forum has already proven to be popular with the hobbyists who use the platform to trade collectibles.

What is driving the growing appreciation of second-hand clothing and goods?

Pre-owned luxury goods are driving a lot of growth in China’s second-hand market, reflecting the cost-conscious, savvy mindset of many Chinese consumers. Chinese consumers came out of China’s strict Covid lockdowns with RMB 6.6 trillion (£760 billion) of savings, but many still feel wary about big spending. The excitement of finding a desirable bag or pair of shoes at a more accessible price is a big reason why many people browse second-hand apps or stores.

However, sales of second-hand luxury goods raise questions about authenticity and counterfeiting. A survey by iiMedia Research found that lack of trust and fear of receiving counterfeit goods stopped over 30% of people from using second-hand platforms.

In response, in March 2023, Idle Fish bolstered its authentication capabilities, allowing users to authenticate over 18 million different items in as little as eight hours.

Beyond luxury goods, a growing awareness of the environmental impact of consumerism – especially among Gen Z/younger millennial consumers – is leading conversations about second-hand clothing in China.

A June 2022 consumer survey by PwC showed that 34% of Chinese consumers “often” or “always” agree that a business’ environmental actions influenced their decision to buy – in the US this figure was just 29%. The Covid-19 pandemic also seems to have accelerated this trend. For example, a KPMG study in 2021 found that since the beginning of the pandemic, 65% of consumers from Greater Bay Area cities have become more conscious of a product’s origins.

Idle Fish claims that the platform and its users reduced three million metric tonnes of carbon emissions over the past year by shopping second-hand instead of buying new.

However, as Zhang Na, founder of sustainable fashion brand Reclothing Bank, pointed out in a recent interview with Tong, second-hand and vintage clothing is also an outlet for creativity and self-expression. “[Previously], the marketplace was conditioned to encourage those consumers [born in the 70s and 80s] to express themselves through luxury brands and a pursuit of upward mobility,” she says. “Now, the new generation of consumers care more about their own unique experiences and identities.”

The CBBC view

International platforms are likely to have a hard time competing with homegrown apps like Xianyu in the resale field. However, there are still a number of key lessons that British brands can learn from this trend.

While offering resale solutions may not be an option for every brand, incorporating conversations about sustainability into marketing in China in an authentic way is increasingly important for all brands. This can include working with influencers or key opinion consumers (KOCs) that talk about sustainability.

Moreover, it underscores that Chinese consumers are cost-conscious but willing to spend money on high-quality items.

The post Is second-hand and vintage shopping popular in China? appeared first on Focus - China Britain Business Council.

Since 2015, China’s apparel manufacturing industry has undergone a profound transition. Rising labour costs shifted the sector in a less labour-intensive and highly automated direction. Geographically, many apparel enterprises have relocated to regions with lower labour costs, such as western and central China.

Technologically, apparel enterprises upped their research and development spending. In 2020, more than 26,000 R&D projects were carried out in the textile and clothing sector. Nevertheless, many apparel enterprises exited the market during this industrial upgrading and structural transformation.

Besides manufacturing, China’s apparel export industry faced significant challenges from international trade disputes and increasing production costs. China’s clothing export value and global share have continuously dropped between 2014 and 2020. In the meantime, several rising apparel manufacturing countries in Southeast Asia started to threaten China’s leading position.

Despite these circumstances, China’s garment exports saw an upsurge in 2021 amid the Covid-19 pandemic. In contrast to many countries that shut down clothing manufacturing during lockdowns, Chinese clothes makers benefited from the country’s effective pandemic controls.

Given the fierce competition in the international fashion markets, China is looking for more opportunities at home. In the past two decades, the average expenditure on clothes and shoes in China increased dramatically.

Chinese consumers’ willingness to buy domestic brands also increased substantially. According to a recent survey, around 60% of Chinese consumers had bought fashion items from domestic clothing brands.

The prevalence of online shopping has also boosted China’s apparel retailing sector. In 2020, more than one-third of the apparel sold in China was via online retail platforms. To improve consumers’ online shopping experience, Chinese apparel retailers have invested in innovative technologies.

In spring 2020, China’s leading online retailer, Taobao, launched its first virtual dressing room, allowing consumers to try on more than 600 pieces of luxury items virtually. According to Statista’s Digital Market Outlook on the apparel industry, by the end of 2025, nearly 60% of China’s apparel market revenue will be generated through online sales, well ahead of the global average of 43%.

Despite the popularity of online platforms, almost 50% of fashion consumers still shop in physical stores (including department stores, speciality stores and monobrand stores) because they can feel the texture of the products and try them on if necessary. A secondary reason is that they can make sure the quality of the product matches their expectations.

Current trends: Dressing down, sustainability and more

Clothing and footwear in China are fragmented, with local and international fashion brands competing in different price ranges. However, the pandemic changed consumers’ habits. They now spend more time at home, choosing relaxed dress codes and work-from-home attire, which means that sweatshirts and jogging bottoms saw impressive results.

After the sales downturn in 2020, retail channels (especially brick-and-mortar stores) started to recover in a steady manner throughout 2021, in line with the proactive channel revolution by clothing and accessories players to get the most out of traffic to physical stores.

With the shift in shoppers’ behaviours post-pandemic and to better equip offline channels with the ability to combat unexpected events such as extreme weather and natural disasters, fashion retailers are adapting to new levels of operational efficiency pursuits in a consumer-oriented manner.

The pandemic accelerated the adoption of new technologies. When stay‑at‑home orders made it harder for consumers to shop in stores, many brands launched “virtual fittings”, where consumers could try fitting at home using online meetings and 3D body scanning technology.

Second, third and fourth-tier cities in China have pushed the growth of the luxury market. As a result, 88% of China’s luxury growth was driven by new consumers. One group of shoppers that have made a huge impact are Gen Z consumers, representing 40% of the industry growth. However, Chinese Gen Z consumers have different shopping behaviours from their predecessors when it comes to luxury purchases. Whereas a decade ago, 90% of Chinese luxury consumers would have first purchased leather goods, today’s Gen-Z consumers are more likely to first buy a ready-to-wear item, such as a signature T-shirt from an up-and-coming designer.

Another important factor to consider is the recent impact of the sustainable fashion movement in the apparel industry. People worldwide are increasingly conscious of the environmental impacts of their consumption habits, and Chinese consumers are no different. Young, urban and increasingly environmentally conscious consumers in China are following this trend.

With the rise of fast fashion – the mass production of cheap and readily disposable clothing – the fashion and apparel industry has become increasingly scrutinised by environmental activists. By some measures, the fashion and apparel industry is responsible for 4-10% of global greenhouse gas emissions.

In contrast to fast fashion, sustainable fashion emphasises low-emissions clothing products that are made to last. As China seeks to radically reduce its greenhouse gas emissions, sustainable fashion has the potential to transform the country’s fashion and apparel industry – but requires long-term investments to drive cultural change among consumers.

China’s most prominent sustainable fashion brands, such as Icicle, Klee Klee, Krop and Ziran, largely cater to a higher-end market. Other companies, like Bastine, focus on sustainable textile production. Some foreign brands specialising in sustainable fashion have entered the Chinese market, including Everlane and Allbirds, with mixed success.

Do Chinese consumers still want to buy foreign fashion brands?

In recent years, China’s fiercely competitive environment has been pushing some international players out of China. Foreign brands are struggling to compete with domestic brands that leverage large social media followings to offer cheaper products at lower prices via live-streaming and e-commerce platforms, where Chinese e-commerce users can buy clothing products for less than RMB 50 (US$7.5).

Recent data from iiMedia Research showed that 62% of Chinese consumers bought clothes via e-commerce platforms in 2022, while 58.5% of all customers spent between RMB 201 (US$30) and RMB 600 (US$ 90) on making clothing purchases via traditional offline and online platforms combined.

The rise of nationalism is also stimulating the apparel industry to adopt more Chinese essentials, with “being a Chinese brand” and “having Chinese elements” being top considerations for young Chinese consumers, according to the China Youth Consumption Report from iiMedia Research.

The boycott of Xinjiang cotton by predominantly Western firms further exacerbated this trend, with Baidu’s 2021 big-data search report showing that the search volume of Chinese clothing brands increased by 137% after the moves due to concerns over human rights, which China has denied.

H&M, which drew criticism for being the first company in China to publicly boycott Xinjiang cotton, reported a nearly 40% year-on-year decline in sales in China. The company announced the closure of its flagship Shanghai store but returned to Tmall, having previously been dropped from the business-to-consumer online retail platform.

Old Navy, owned by Gap Group, closed all its stores and exited the Chinese market in March 2020 after six years in the country to focus its business on maximising efficiency in North America.

British clothing brands Topshop and New Look suspended their operations in China in 2018 due to weak performance. Bershka, Pull&Bear and Stradivarius, all brands in the Inditex Group portfolio along with Zara, have also closed their online stores.

According to industry experts, Chinese consumers prefer the lower prices and diverse designs offered by Chinese brands. Overseas fast fashion brands will be unlikely to respond to changes in design style to suit the aesthetics in China. Moreover, the notion that anything hip and trendy must come from abroad is slowly changing as Chinese companies are establishing their own fashion brands and collections. Big Chinese fashion companies, such as the casual wear brand Metersbonwe, the Trendy International Group and jewellery company Qeelin, have all discovered foreign shores for expansion, especially in Europe and the US.

Anyone wanting to break into the Chinese fashion industry – be it as a brand, retailer, designer or service provider – should, first of all, understand the market and the consumer, including Chinese sizes and bodies.

Quality is a big draw, with the best example being European products, which Chinese consumers love for their premium quality and fabrics. Geography is also key – keeping the vast market with its regional preferences in mind and that not only first-tier cities are important but also second and third-tier ones.

In terms of channels, anyone approaching China should keep in mind that e-commerce is booming and that a strong, customer-friendly Internet presence is a must.

Geographically, the industry is mainly located in the southeast around the Pearl River Delta, Yangtze River Delta, the Bohai Sea region and the southeastern coastal areas. Though there are 50 garment clusters throughout China, the total output of Shandong, Jiangsu, Zhejiang, Fujian and Guangdong make up 70% of China’s total garment output.

Though China is the number one in terms of textile and garment exports in the world, its situation is different from a country like Bangladesh when it comes to the industry’s overall importance. While in Bangladesh, it is the main and most important industry (at 85.9% of all exports), in China, it is one of many major industries such as mining, iron and steel, machinery, automobiles and others.

The challenges of manufacturing in China

In recent years, wages have increased in China faster than in other Asian countries, forcing foreign brands to look for manufacturing alternatives in the region, such as Vietnam.

Another difficulty has been the long transportation lead time to Europe and the US and the currently high freight costs. Due to recent supply chain disruptions and the Covid pandemic, some companies are finding it unsustainable to produce in Asia, turning to near-shoring, at least partly.

Additionally, the ongoing trade war with the US has hurt both countries. Tariffs have encouraged foreign companies to look for alternative markets and to outsource at least part of their production.

One problem companies sourcing from or manufacturing in China encounter is insufficient lead time assessment. Finding the right materials requires sufficient time and attention, and human errors may cause delays. Establishing efficient supply chain logistics in the region and coordinating all the delivery, storage and other activities within the supply chain is costly and time-consuming, risking unwanted — and often avoidable — delays.

Ensuring high quality can be tricky. Many factors can negatively affect product quality: insufficient apparel manufacturer assessment, poor quality assurance at the start of production, lack of quality control following production and no consideration for the quality or suitability of inputs.

A single sample often does not tell the full story about the quality of a product, and the reliability of a manufacturer’s quality control mechanisms. Many suppliers in China, Bangladesh and other major garment-producing countries in Asia either don’t follow production standards closely or have bad production standards.

Some companies don’t conduct a feasibility study before they start production. This often leads to underestimating prices and overestimating production speed, resulting in unpleasant surprises, higher costs and slower final delivery.

Legal challenges

On the legal side, intellectual property protection and trademark and copyright registration are necessary in China. In 2020, China concluded 2,429 court cases involving IPR in the fashion industry. The best way to protect a fashion brand against counterfeiters is by correctly registering it as early as possible with the appropriate IPR administrative agencies.

China’s IPR legal framework is similar to that of many countries. However, there are detailed differences that must be considered in the case of any cross-border transactions involving China. Among these, one of the most important is that China is not a signatory of many bilateral judicial assistance treaties. This means that the decisions of foreign courts are not enforceable in China and vice versa.

Administrative bodies, such as the State Administration for Market Regulation and its local delegates, typically carry out raids to seize goods from IPR infringers. They also have powers to impose penalties on IPR infringers.

Trademark law, patent law, copyright law and anti-unfair competition law and their matching regulations are the key laws in China to protect IPR.

China Consumer 2023

This article was produced as part of a series for China Consumer 2023.

Learn more about CBBC’s flagship consumer event of 2023 here.

The post Practical guide to China’s fashion and apparel markets appeared first on Focus - China Britain Business Council.

The emergence of a more diverse and niche-interest-driven Gen-Z consumer has led to a rethink of the styles being championed by fashion’s biggest players. Aiming to cater to both fast-changing aesthetic tastes and more multi-layered needs in terms of functionality, China’s clothing industry wants just one thing in 2023: to bounce back. Dao Insights walks us through the most prominent fashion trends, how they resonate with China’s shrewd consumers, and why all consumer brands – not just apparel companies – should take note.

Y2K 

Y2K, or “Year 2000”, is a fashion throwback to pop culture in the late 90s and early 00s. The sporty yet sexy aesthetic is characterised by slick futuristic looks and outfits including everything from tight leather trousers and shiny clothing to silver eye shadow and spiky up-dos. Jennie from Korean girl group Blackpink is a particularly well known pioneer of the look.

The style has emerged as a subculture in China, catering to the pursuit of personality and individuality, as well as the philosophy of “freedom to dress” upheld by young Chinese people. It is particularly sought after by young women aged between 18 and 29, who also have a strong interest in activities such as fitness, pop music and e-sports, according to the 2023 Fashion Trends Insights Report published by Taobao.

Taobao saw online sales of clothing in the Y2K style surge three-fold between 2020 and 2022, while the number of Y2K merchants reached 10,000 in the same period. With the topic of Y2K drawing a staggering 450 million views on China’s fashion vanguard Xiaohongshu, this trend has taken a firm hold in the hearts of Chinese consumers.

New Chinese Style

The guochao trend continues to maintain a foothold, although the fashion style inspired by the so-called “Chinese wave” has recently been given a new lease of life. While continuing the concept of blending contemporary designs with nostalgic cues from Chinese culture, the new styling appears to be bolder in terms of adopting Western aesthetics. Unlike traditional costumes such as Han Fu (or Han costume), this renewed look has strong links with a modern lifestyle and is synonymous with qualities such as “elegance and refinement”.

While suitable for a range of daily social and leisure scenarios, the style has made particularly frequent appearances during “Wei Lu Zhu Cha”, an old-fashioned activity involving a group of people roasting tea drinks by a stove, and has seen the most interest from the post-90s generation. This generation has been shown to have a stronger appetite for classical literature and travel and an overall appreciation for a laid-back lifestyle.

The New Chinese Style has been steadily gaining steam in the past three years, with sales recording an increase of 150% between 2020 and 2022, which has pushed e-commerce platforms to double down on their efforts to showcase collaborations between brands and KOLs wearing such looks. Having garnered views of 1.5 billion on Douyin and another 310 million on Xiaohongshu, New Chinese Style bears great market potential that is yet to be unleashed.

Office Leisure

The work-from-home provision that emerged from the Covid-19 pandemic has reshaped the public’s work outfit choices. While office life has largely resumed in China following the relaxation of stringent Covid rules, a preference for chilled-out loungewear has remained – but with a professional twist.

This hybrid dressing style typically sees a combination of either a hoodie or other athleisurewear beneath a blazer jacket in muted colours with loose silhouettes, matched with trainers, which is “professional enough for the workplace” but also easily adaptable to situations such as a light workout in the gym.

Pulling off double sales growth in the past three years, this style is favoured by young working professionals aged between 25 and 30. The neutral palette is deemed compatible with China’s work environment but also provides comfort and flexibility in multiple scenarios, which is in line with the more diverse lifestyle lived by China’s Gen-Z and Millennial segments.

Vintage Styles

Also known as Gu Zhuo in Chinese, the rise of vintage style goes hand in hand with the overall growth of the vintage market in China in recent years. Nostalgic looks featuring dress styles from Hong Kong in the 1980s and 1990s and those reflecting the yesteryear aesthetics of France, Italy, the UK and America are among the top trending, propelling the hashtag “Vintage” to draw in more than 120 million views on Xiaohongshu.

The rise in vintage clothing is also coupled with the growing interest in musical theatre performances amongst the post-90s cohort, from traditional Chinese theatre shows to international classics such as Cats and the Broadway production of Rent. These musical works have played a crucial role in the penetration of vintage aesthetics among China’s younger generation.  

Old Money

This aesthetic refers to a low key luxury style. Instead of bragging about one’s wealth with pronounced logos, Old Money fashion is designed to exhibit a person’s sensibility through neat, understated and often expensive clothes.

Denoted by “quiet luxury” pieces such as chinos, cardigans, Oxford shirts and tweed coats, this style interests China’s young women aged between 18 and 35 in particular, who are generally financially comfortable and want to pursue a simple and classic aesthetic. The trend also fits in with an overall tendency towards more rational consumer behaviour, which focuses on the functionality and comfortable texture of products. According to the 2023 China Consumer Insights and Market Outlook White Paper, these unpretentious clothes are also viewed as a display of a person’s “maturity” and “personal taste”.

These fashion trends reflect the upgrading of China’s overall apparel market, in which clothing is highly associated with individuality and personality on top of basic functions. It also shows that wearable products are expected to be applicable in more varied scenarios, which is the result of multi-dimensional consumer demands. Apparel brands are, therefore, advised to keep their finger on the pulse of consumer interests in order to resonate with their target audience.

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research services can help you build knowledge and understanding of the Chinese market prior to investment.

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