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Vinted's £3bn valuation shows demand for second-hand goods is thriving

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Shoppers are also opting for rentals - Selfridges
Shoppers are also opting for rentals - Selfridges

For Jake Harris, rooting through car boot sales with his grandfather started as nothing more than a hobby. It wasn’t until he came across a rusty John Grey vintage snare drum for £10 that he began to take it more seriously.

Just 18 at the time, Harris sold the snare drum for £200 on eBay. “I remember thinking all my Christmases had come at once,” he says.

Today, he is the founder Into Music, a re-seller on eBay which specialises in repairing old instruments and selling them at a profit. Harris says there is “huge demand” and “few sellers seemingly fulfil this niche”.

But he is far from alone in his pursuit of capitalising on second hand goods. Two thirds of UK sellers on eBay have started offering used products in the last year and just over 81pc say they’ve bought pre-owned goods as they try to cut back on spending during lockdown.

Vintage fashion, in particular, has become one of the fast-growing markets for resellers. More than two thirds of consumers now say they are willing to buy pre-owned fashion, according to a report from ThredUp. That demand could mean the resale clothing market will more than double to $64bn (£45bn) in the next five years.

“Even before the pandemic second hand clothing has been massively outperforming the total apparel market in the UK,” says Pippa Stephens, a retail analyst at GlobalData.

Last year, the resale market grew 25 times faster than the wider retail market, with 64m shoppers making a second hand purchase.

A mix of factors including concerns around sustainability and the impact of fast-fashion on the environment, affordability, especially in a recession, and the shift to online shopping, have all contributed to its popularity.

“People have also been using the pandemic as an opportunity to clear out their own wardrobes,” Stephens adds. With charity shops being forced to shut during lockdowns, consumers have turned to websites and apps such as Depop, eBay and Vinted to upload wares and declutter their homes, potentially spelling trouble for physical outlets.

The latest £214m cash injection into Vinted, the second hand marketplace, highlights investors’ appetite for the sector.

“There has been an increasing importance of sustainability in consumers’ minds, which we had seen shifting even before Covid. Now, it is even more front of mind,” says Carolina Brochado, partner and investment advisor to EQT, the cornerstone backer in Vinted’s fundraise.

“We could also see that particularly for younger generations, they’re much less concerned about newness than they are with things like waste, being smart with their money, and also style and functionality. They don’t really care whether it’s new or not, and they actually find that first hand can be wasteful.

She adds: “I think the most interesting part for us is we think that this market is growing over 40pc year over year and we think it will continue to grow this much for years to come.”

The reselling phenomenon stretches beyond fashion. Earlier this month Ikea said it would buy-back old furniture and allow new customers to buy it back for half of the original price.

Made.com launched a similar scheme offering shoppers 10pc off their next purchase if they donate tables, desks and sofas to their neighbourhood communities or schools in need.

Philippe Chainieux, the boss of Made, says that he has plans to increase the firms’ warehouse space in the years ahead to collect the unwanted furniture themselves.

Meanwhile, Music Magpie, a British business that sells second hand books, DVDs and CDs as well as refurbished smartphones, floated on the Alternative investment market in London in April with a £208m valuation.

“There used to be something a bit niche about second-hand, and almost a bit snobby about it,” Steve Oliver, Music Magpie’s co-founder told The Telegraph ahead of the float. “But now it’s very mainstream and very accepted as a smart way to shop.”

Ikea's circular hub -  PA
Ikea's circular hub - PA

Shoppers who aren’t fussed about ownership are also opting for rentals at a fraction of the cost. John Lewis introduced a furniture rental service last summer and was overwhelmed by demand.

UK fashion rental start-ups such as Hurr, My Wardrobe HQ and By Rotation, have entered the scene in recent years vying for a share of the profits.

Moreover, traditional retailers have now tapped them up to help them launch their own rental platforms and complement their traditional offering.

Victoria Prew, chief executive and co-founder of Hurr, has recently sold her white-label technology to firms including Selfridges and luxury brand Vampire’s Wife. She is adamant that such a move will not cannibalise sales, on the contrary.

“It opens up new opportunities for retailers and it’s a revenue driver,” she says. “Gen Z and millennial shoppers do not necessarily have the money to buy a £500 item, but they can rent it for £50,” she adds. “They will go on to invest in quality rather than buying knockoffs.”

Prew, who was previously a chartered surveyor for Knight Frank, launched the firm four years ago. She says last month was her busiest yet as shoppers book outfits for summer weddings and events.

“We have proved that rental is not mere box-ticking.”

Do you buy second-hand goods online? Tell us about your experience in the comments section below
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