Trends in luxury re-sale demand in India

Abstract

Over the past decade there has been a steep increase in the purchase of second-hand luxury goods across the globe, with the emergence of ‘pre-loved’ stores like The RealReal and Vestiaire Collective growing rapidly and partnering with major luxury conglomerates such as Kering and LVMH. According to a study by BCG, the market is worth really 21 billion euros worldwide and is growing at a rate of 8% per year (faster than the luxury industry overall). Secondary research shows that, at a global level, factors such as social validation, growth of Gen-Z consumers, and the effect of the pandemic play a major role in the growth of this market. While literature exists for firsthand luxury purchase behaviour in an emerging market like India, and for second-hand luxury demand globally, studies on consumer behaviour and purchase drivers for second-hand luxury is scarce. In this study, we focused on one-subset of the second-hand luxury market i.e clothes and apparel. From the qualitative interviews and quantitative surveys, we identified five practical drivers of second-hand luxury purchase of which three - social media/influencer driven purchase, online availability and similarity in appearance and quality of the second-hand to the first-hand as statistically significant drivers of second-hand luxury purchase. Though, sustainability was not a statistically significant driver, nevertheless, second-hand luxury was seen by a majority of our respondents (60%) to be sustainable compared to first-hand luxury. Further, sustainability was seen more as a useful attribute rather than a driver of purchase. Based on our findings, we identified four strategies for second-hand retailers to increase sales in India.