Comment: China's shared-economy boom

Jake Newby dives into the business opportunities and future of secondhand goods in China.

Jake Newby is a Shanghai-based writer, editor and consultant.

Anfu Road, running for two tree-lined blocks in one of the coolest neighborhoods in Shanghai, China, is crammed with bakeries, boutiques and bars. It's buzzing pretty much 24/7. And, in recent months, one spot has been so popular that it has had to introduce an online booking system to manage the crowds. 

Set over two floors, the space causing all the fuss is the first bricks-and-mortar outlet in Shanghai for Duozhuayu – the name comes from the French phrase ‘deja vu’ – an online platform founded in 2017 and now a key player in China's rapidly growing secondhand economy. The brand began by trading in reconditioned books, amassing 300,000 followers and selling more than 200,000 units in its first six months of operation. And now the Anfu Road location spotlights Duozhuayu's recent branch-out into pre-loved clothing as well. The clothes on the curated racks range from MO&Co leather jackets to Supreme T-shirts.    

This may seem unremarkable to readers surrounded by regular flea markets and used-goods shops on the high street, but in Shanghai – a city that feels obsessed with the shiny and new almost to the point of self-sabotage – it's a revelation. When I first moved to China 16 years ago, charity shops were unheard of and secondhand was synonymous with unhygienic, unwanted items. For generations, living conditions in much of China meant that secondhand items were just a part of life, with goods handed down and fixed until there was no saving them. Yet after years of explosive growth in living standards, by the early 2000s most young people in China's major cities were keen to associate themselves more with cutting-edge trends and status-symbol price tags than pre-loved clothes and thrifty bargain-hunting. 

So, what's changed since then? For one thing, presentation. Duozhuayu's slickly designed space has more in common with a luxury streetwear boutique than it has with the often-depressing charity shops I spent my university years rummaging around in. And whether or not that online booking system is strictly necessary, it plays on consumers' FOMO to create even more hype around what's inside.

Duozhuayu isn't the only platform to tap into the rising demand for secondhand goods. Xianyu (‘Idle Fish’), the secondhand spin-off brand of Alibaba's online-sales giant Taobao, has helped to make buying used goods as easy as a few taps on a phone screen. The app – selling everything from cars and household appliances to clothing and makeup – surpassed 30 million active users in 2020 and has led to lots of similar platforms, including Zhuanzhuan, launched by rival tech firm Tencent – the maker of WeChat, the multipurpose social media and mobile payment app.

The potential for secondhand in China is seemingly huge. Whereas pre-owned luxury goods sales account for some 30% of the overall luxury market in countries like Japan and the US, in China that share is just 5%, according to a recent report by the University of International Business and Economics in Beijing. But young people are changing that, with research by Beijing-based Sootoo Institute suggesting that 50% of secondhand platform users are under the age of 24.

These consumers are also thinking of the bigger picture. According to a 2019 Mintel study, only 30% of city-dwelling Chinese consumers said they wanted to exclusively use new products, with more than half listing environmental concerns as a key factor in their shopping habits. 

Despite such encouraging statistics, sustainable fashion and secondhand shopping in China still face significant hurdles. Duozhuayu may be proving popular in Shanghai right now, but China is too big and too diverse for a trend in the country's most cosmopolitan city to represent consumer habits at large. Concerns over cleanliness still linger, while question marks around authenticity have only been partly addressed by Xianyu working with brands to create official secondhand hubs on its platform. 

China's shared economy boom in the past few years has led to a dozen ‘shared fashion’ apps in the style of fashion rental service Rent the Runway, attracting $130 million in funding between 2014 and 2017, according to Jing Daily, a digital publication on luxury trends. But the closure in July of one of the biggest – Alibaba-backed YCloset – was seen as an indicator that optimism in the sector has now evaporated. 

Still, with the Chinese government having announced its intention to make the country carbon neutral by 2060, it's clear that fast fashion and other wasteful consumption models will need to change. And while the influencer crowd back on Anfu Road may be just as concerned with picking out a unique item to enhance their wardrobe as they are with the sustainability of their outfits, if an economy as big and as resource-intensive as China's can properly embrace secondhand and upcycling, it should be good news for us all, with new business opportunities looking strong. 

This article was first published in Courier issue 44, December 2021/January 2022. To purchase the issue or become a subscriber, head to our webshop.

You might like these, too