You might call this a modern Cinderella story. But in our story, the glass sneakers don't find one pair of feet to wear them happily ever after. Instead they become assets which retain their value over time.
This modern retelling is all about reselling. There's no prince in this story, but there are some very handsome profits. Vestiaire Collective is a luxury resale company whose story began in 2009, when a group of chic Parisians decided to clean out their closets and sell on what they weren't wearing anymore. Now the fashion resale market is booming. And earlier this year, Vestiaire collective achieved a valuation of $1.7 billion
in its latest round of funding. But this is not the only resale success story. Resale companies on both sides of the Atlantic are attracting investors with a promise of new growth from old clothes. And between Vestiaire's buyers and sellers is this the authentication center, and it's never been busier. The whole year of 2020, we've seen a hundred percent growth on items being listed. Just thinking about the sheer scale of unused inventory is just enormous.
It's time to examine the unstoppable rise of fashion resale. What we wear says a lot about who we are, yet fashion is also a $2.5 trillion global industry that touches everyone on earth. I'm Imran Amed. I first started trying to make sense of the fashion business 15 years ago, as it was being transformed by technology, globalization and shifting consumer values.
Now I'm on a journey to see how fashion is recalibrating amid the pandemic, to balance profit with purpose. This is the Business of Fashion show. Join me to discover how fashion shapes business, culture, and identity, and to meet the people forging fashion's future. Old is the new new. While style setters have long embraced the chicest vintage clothes, and savvy shoppers search thrift and secondhand stores on the promise of originality and self-expression, online resale platforms are facilitating a bonafide buy, sell, buy, sell boom.
Luxury brands thrive on strict control of distribution, price and perception. Yet some are now embracing resale to recruit new customers and deepen engagement with existing ones. Right across the resale market, the simplicity of transactions combined with shifting customer values means secondhand is taking up more space in fashion closets now and in the future, as more and more of what we love to wear is pre-loved. And the sellers? In the US alone, it is estimated that 9 billion items of clothing are left unworn.
According to BOF Insights, secondhand fashion sales in the United States could top $67 billion by 2025. Buyers are first and foremost seeking value for items for which they would not be prepared to pay full price. While sustainability ranks only third as a reason to purchase resale.
Sellers and investors cite support of circularity and the eco cred of reducing emissions, energy and water use. But should we really be celebrating this as slow fashion or is it just another quick fix? Could reselling unwanted items actually be accelerating more first-hand consumption? Drops in limited edition products create urgency and scarcity, with some resell prices more than six times higher than retail prices. And how to be sure of real versus fake? In the buzzy youth segment, how to protect peer-to-peer teenage traders in exposed online communities? Resale platforms must be vigilant, on authenticity and safety, while customers on both sides of the transaction should keep age old mottoes in mind: 'Caveat Emptor, Caveat Venditor', let the buyer and the seller beware. I'm on a train headed to Lille, a few hours north of Paris. It's here that Vestiaire Collective, the luxury resale company, has set up its authentication center to verify that the products it sells are real.
CEO Max Bittner showed me around. This whole area in Tourcoing was a massive part of the garment industry, which then obviously got hit very hard with the whole outsourcing. Right. So the people here are super passionate, but they also really love fashion. It's really a fashion industry, so we can actually attract good authenticators, people who've been in the industry. In 2019, Max joined Vestiaire Collective as CEO from Lazada, a Southeast Asian online shopping portal acquired by Alibaba.
I mean, the huge difference here with us is the senior authenticators and all the authenticators get three months training, which is very long. And what's the training that's provided? We have the experts who've come here, whether they're from auction houses or the like, and you're speaking to one of them in a second. Right.
They basically go by brand, by category, all the learnings that we've acquired over the last 12 years. And with a lot of the brands, we've received also training from them. I'm in charge of the authentication. This is my seventh year at Vestiaire Collective. I come from fashion auctions.
A counterfeiter will always do a mistake. And our job is to detect the mistake. If there is a mistake, of course, it's a counterfeit.
What's the most expensive item ever sold on Vestiaire Collective? The most expensive item ever sold was an €85,000 Himalayan Birkin, which was sold from a Hong Kong seller to a New York buyer. We actually had an incident two weeks ago where someone bought a 250,000 golden Patek Philippe, but the seller then didn't ship it, so we were very sad about that. But there have been items close to €100,000, bought and sold on the platform.
The lower price point, the minimum basket size you can sell is €15. So you can't sell anything which is below €15. If you think about the average basket size of some of these peer to peer platforms, I think that is the average basket size. So we clearly differentiate there. And we try to limit what I would call broadly fast fashion. We don't really want to have fast fashion and encourage fast fashion on the platform.
Why not? We have a positioning of more higher end fashion, real luxury, real designer, something that people want to buy and sell for a much longer period. One of the key things in the roles that we play, as a secondhand platform, is that we want to educate people that what they buy and sell is not consumables, just fashion. It's really an asset. And if you think about the way we, as a consumer class, need to change the way we think about consumption, is that we need to take much better care and appreciate the value of the items that we have because there is a residual value. How do you respond to that kind of criticism, that the resell market actually propagates consumption as opposed to manages it or minimizes it? I think that's probably the question that concerns us the most because I think as part of our core mission, we want to change consumer behavior to the better.
And we've actually spent quite a lot of time with external agencies to challenge ourselves. And our goal is to be carbon neutral by '25, without any offsetting. And we've looked through all our emission, whether it's our transport or the way that we reduce consumption and we think that target of being carbon neutral without offsetting is possible. The fact of the matter is, we do reduce the amount people consume because what we help them to do is to trade up. Instead of buying Zara firsthand, they buy Sézane secondhand, if buying Sézane firsthand, they buy Yves Saint Laurent secondhand, instead buying firsthand Chanel, they buy secondhand Hermès. So you basically go up the food chain and we want to help and educate every consumer that they should maybe pay a bit more upfront for an item that they're going to wear longer and where they're more likely to take care of it and then resell it in the future.
You didn't come from this world. You probably didn't even know what a Himalaya Birkin was. I used to climb the Himalayas, maybe, but I didn't find any Birkins there. No, I have to admit I'm a brute.
I think there would be many people in the industry who would probably still roll their eyes at me. And that's fine. I made my career selling $6 dresses or $70 mobile phones across Indonesia and Malaysia. It's a very different business. But in the end, what we do is use technology to connect buyers and sellers.
It's about customer service, it's about user experience. But the beautiful thing about the products that we sell now, and I've really gained massive appreciation to it, is there's real craftsmanship. They're real pieces of art and trying to educate people of that underlying intrinsic value of these items and therefore making people change towards, what I think, is better consumption.
I mean is probably the most fulfilling thing there is. How has your customer behavior, both in terms of sellers and buyers, shifted over this period of disruption that we've all been living through? It's really allowed people to be quite self-reflective and to start asking themselves, okay, what can I do myself to be different? And secondhand is one of these very few things where people can do something today. How do you manage that tension around authenticity? Because without authenticity, this luxury focused operation starts to teeter a bit. If you step back on the actual topic of fakes, at the moment, one in 1000 products is fake. So the chances of buying something on Vestiaire and it not being authentic is one in 1000. Is that perfect? No, it's not perfect.
And we're by no means nearly done on what we can do to improve it. Coming back to the customers, we have this incredibly engaged community. And the beauty about secondhand is that people really define their own style.
They can shop back decades to find what they're looking for. They can find products that they might not be able to look for. I mean, we often think the world is Paris, the world is London, the world is New York, but we have access to people, to products, that would never get access to anywhere in the world. So it's really about this global digital wardrobe, which gives access to products that people might not have access to because they're too expensive or because they just don't have a store anywhere near them. So I just get really excited about it. And I look at technology and what it can provide.
It's endless opportunity. The rise of resale now is akin to that of e-commerce 20 years ago. The field is wide open. The front runner has yet to emerge. No wonder it is attracting billions of dollars of investment.
It's a similar story of upswing over in London. So we went to Lille, we visited with Vestiaire Collective to learn about the luxury part of the resell market. Now we're here in the heart of east London to learn about the mass end of the market.
We're here to meet with Depop. They are a technology company here, and they've had their own journey during the pandemic. And we're here to meet with their CEO Maria Raga.
Depop is skewed towards lower price products exchanged between younger traders, almost all of them 26 and under, and who are attracted to the community aspect that a peer to peer platform can offer. What makes a community focused platform like Depop different from typical fashion e-commerce? From the very beginning, when you think about the way the app has been designed, it has been designed with that in mind. It's not just a place where you come to find an item that you want. It's a place where you come to discover other people doing other things.
Where you can actually interact with the users, and then you can also engage with them in real life. And so for us, having this community-first appeal was extremely, extremely important from the very beginning and it has translated into how we build the product and also how we do marketing. There's a huge overlap of buyers and sellers in the platform. And that really creates that sense of community, it's not like a B-to-C model, it's really a peer-to-peer where people start as a seller and then also become a buyer and it basically fosters the sense of community. But what about the brands in your world? Do you have engagement with those brands? Yeah. So we've been quite lucky actually, because we didn't have to go out there and talk to them.
They actually came to us, initially because they wanted to get access to our community. They see, as we see, that Gen Z acts and behaves in a completely different way. And so, they wanted to collaborate with us to understand that movement a bit better.
They also want to get more involved in resell. Especially now that has become much more prominent. They're trying to see what's their place there. And so for us, we were super welcoming because we know that alone, we're not going to change the world for better. So we need to work together. How did the pandemic impact supply on the platform? And are there lessons you can learn about how to get more and more people aware that actually they have assets in their wardrobes? The pandemic made people realize that they had a lot of things in their closets.
Marie Kondo was also quite good on showing people that you've got too much. I think it was a moment in time that made people realize, wow, this is an issue. On the back of that, there's obviously a lot more social consumption. So people are realizing that there's far too much out there. If you think about the amount of items being produced on a yearly basis. 100 billion.
It's crazy. That's like, what more than 250 million items a day. So I think people are starting to realize, maybe a pandemic had to happen for people to notice that. Supply drove the demands because people were listing all these items, they were talking about it in social media and then people were coming to, oh, let's see.
And so in terms of what we can learn from that, it's about, not mimicking what happened because you don't want people to be at home, right? So it's about reducing the frictions that they found out on the way. So like, how do we make sure that we connect with buyers and sellers in a better way so that they don't have to be looking at multiple items? So one of our core areas of work right now is personalizing the app and really making a big difference between the browsing experience and the search experience. Okay, so while all of this craziness of a pandemic is going on, you announce that you've been acquired by Etsy.
What was it? For $1.62 billion? So basically two years ago, we met them and it was very much like a knowledge sharing session. And some of the things that we ended up doing was, on the back of some of the conversations that we had with them, I realized that first, there's a lot of similarities in Etsy and Depop, in terms of values, if you will.
So they really, really foster entrepreneurship and creativity. And they also really believe in consumers that are community led. More than 2 million users joined the Depop community in 2020, proving the rapid trajectory of the fashion resale market.
I met with Fiona Short and Youth, two long time Depop sellers. Nice to meet you. How are you? I've heard all about you. Both have built their own businesses to capitalize on this opportunity. Now you're both in this market that they're calling the fashion resale market, and you guys are Depop sellers, how do you define the market? Within the community, we don't tend to use the word resellers for ourselves because what we do is much more than reselling.
It's curating, sometimes you're fixing pieces. In fact, some of the pieces that we buy are dead stock pieces, and haven't even been sold to a consumer before. The term resellers, we use more for the drop culture. So we just tend to call ourselves vintage sellers or vintage dealers. Yeah, there's so much to this industry or whatever you want to call it, this community. I feel like you can have so many different interests and whatever you do day to day, whether it be photography or styling, or whether you like hiking, they always come through in your vintage curation.
So even though we do resell, and that is a big part of it and it keeps us going and it allows us to carry on. I think the main core part of it is who we really are day to day and what inspires us and our experiences, where we come from and what we really stand for. Okay. So I have a little challenge for you.
Okay. I bought this t-shirt, it's the first thing I ever bought on the internet. Wow. Okay. Like the first piece of clothing I ever bought on the internet. I think I bought it in 1999 or 2000.
Would this have any value? If this was from like a concert or a tour or something like this, the price of this would be a lot higher. So this is double stitching, which means it's made after 1992. But if it's single stitch, then it's before 1992, which means it's going to be worth a lot more money.
Can you show me the kind of stuff that you guys sell? Yes, of course. Absolutely. On Depop, and explain to us why it's valuable. This is actually the very first piece that I picked up from the markets in Italy. €1, €1 everybody.
€1. €1. It's a John Galliano top, right? It's just a top.
Is it a bathing suit? It's a bathing suit. Beach wear, I believe it's from the early 2000s, newspaper print, iconic John Galliano. And how much could that sell for? I mean, you know more about John Galliano, but, I believe £110, maybe £90. Maybe, yeah, yeah.
All right, Youth. What about you? I bought this at a market and it's a Betty Boop Versace print, which is one of Gianni Versace really iconic prints. What year do you think this is from? This is like late 90s. It's got double stitching.
There was one that was like early 90s, which was single stitching, but this is a later version, but this has come back into pop culture through, I think Cardi B wore an all in one Versace with this print. And it's Betty Boop and a guest, Madonna. So where does this market go from here? How do you see the resell market developing and how might that impact the way you manage and run your own businesses? Personally, I see this already expanding. There's people who are starting in their bedroom, selling that own clothes. And gradually now going into wholesaling.
As the industry does get more saturated and people do want to get involved in different ways, there are obviously windows that are opening and doors that are opening. Yeah. I think one of the things that I like so much about this industry, is that it's based on independent sellers, individuals that are in their bedroom. The new thing isn't now to get a paper round, it's to get your clothes on Depop.
And I think that we're going to see so many young, young, young people are starting their businesses and growing really fast. I think that it's just going to become even more of a social norm because remember like 10 years ago when secondhand clothes wasn't cool. It was counter-culture. But now, as the coin's flipped and it's became mainstream, Fiona sold to Bella Hadid before.
You have? Yeah. What did she buy? She bought two really beautiful 90s vintage tops. They were really reasonably priced. They were beautiful. They were just on the Depop, available to everybody. And I didn't even know it was actually to Bella. And then I saw it on her Instagram.
She was wearing it. Yeah. She could get anything she wanted and she actually sought products out that she couldn't get anywhere else.
Yeah. That's really cool. Yeah.
Well, the most interesting thing for me is that people are building real businesses and livelihoods on these platforms. They've created these whole new models of interacting with customers. In the next 10, 15, 20 years, as consumers become more comfortable, and these platforms grow in visibility, I think it's really going to transform the way a lot of customers engage with the fashion business. It's not going away.
The market is going to grow massively over the next 10 years. There's huge amounts of inventory sitting in all of our closets. It's just about getting that inventory and circulation, getting brands to accept that this is a permanent fixture of the market going forward and increasing the visibility of these platforms amongst customers.
2021-11-27