China's Secondhand Luxury Market Catches on with Price-Conscious Fashionistas

A Gucci handbag that is up to 70 percent off its original price easily draws suspicion in China. With a prevalent daigou culture in the industry and e-commerce sites like Tmall riddled with fakes, shoppers after legitimate luxury products are likely to be more at ease sourcing their fashion from brick and mortar stores or through a the brand's own e-commerce shop. However, there is at least one Chinese shop owner not affiliated with high-end brands who is willing to provide a 100 percent guarantee that her customers will get the real deal on luxury goods. Fang Fang of Beijing secondhand boutique Psycho Recycle is an avid secondhand shopper herself. Her trips to New York City are often accompanied by splurging at Buffalo Exchange or hunting for treasures at flea markets, and when she first opened her shop in Shuangjing district three years ago, bringing this more commercial exchange culture to China was her focus. It wasn't long before she changed course, mostly due to one simple reason: “Luxury sells better. Especially when you have a piece that is a luxury brand with a Zara price.” The style-minded boutique owner stresses that the designer clothing for sale at Psycho Recycle should not be confused with vintage. While the vintage scene is indeed growing in Beijing, Fang Fang says her store is for everyone, and not limited to those who prefer to assemble their outfits according to specific decades. Instead, it's filled with a mix of clothing, shoes and accessories from trendy brands ranging from fast-fashion finds to independently designed, exclusive collections from the likes of Opening Ceremony, as well as garments by top luxury brands from collections as recent as Spring/Summer 2016. The owner turns to WeChat to send a message to Psycho Recycle's followers every time they get new high-end clothing in the store. The secondhand luxury industry in China has been steadily growing in the past few years, and the process behind it is fairly straightforward. Sellers often get the clothing from fashion-conscious friends and acquaintances who receive the items as gifts or simply tire of what they own. Buyers, meanwhile, are increasingly aspiring consumers who make around $2,500 a month, according to Fang Fang. “They can't afford to buy a 220,000 RMB handbag, but they still really want big brands,” she said. “Some of our customers have never even owned a Gucci item before and they want to fill the gap, so they buy really small things.” These items vary from a small clutch to a key ring, or in more extreme cases, a branded flash drive. While the scene has existed for a few years, it has moved at a snail's pace compared to the West, especially in terms of physical stores. The stores that do exist seem to favor the luxe handbag industry—Hong Kong's Milan Station offers bargains on gently used designer bags, while Christie's auction house started selling secondhand bags in Hong Kong in 2014. Several secondhand e-commerce platforms have emerged in recent years as well, but maintaining quality control is still a battle. One of the most popular Taobao apps for secondhand, “Idle Fish” or Xianyu, sells just about every category of secondhand goods eBay-style, but on Taobao, even luxury claiming it's guaranteed to be real isn't always so. Aiming to remedy this are platforms like Secoo or the upcoming online secondhand boutique founded by Yen Kuok, the daughter of Malaysian Chinese billionaire Robert Kuok, called Guiltless International Limited, which has a showroom in Hong Kong. Yen Kuok told The Wall Street Journal in an interview exactly what Birkin bag stitching is supposed to look like, in case anyone questioned her knowledge on authenticity. At Psycho Recycle, Fang Fang encourages her customers to visit her shop because they can see the quality and authenticity of the products for themselves. And if that isn't convincing enough, then her buying policy might be. “Most of our customers who sell their stuff are VIPs, so we know their names, we know where they work, and we know their ID number,” she said. Thus, if there ever is a complaint, “we can always find the person and deal with it.”

China's Secondhand Luxury Market Catches on with Price-Conscious Fashionistas

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Published June 10, 2016

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China's Secondhand Luxury Market Catches on with Price-Conscious Fashionistas