Used goods market flourishing as consumers feel pinch
Second-hand, pre-owned, used, resale – the sector has many names but, however you label it, it’s huge.
And, what is more says Gumtree SA director Claire Cobbledick, this plays a substantial role in the country’s economy, which no one is noticing.
Globally, says Cobbledick, analysts are calling out second-hand buying as one of the biggest retail trends of the next decade but, locally, there’s little attention paid to this under-the-radar economic phenomenon.
Just how big is the category?
She says one Gumtree survey extrapolated that it could be worth more than R1-trillion in terms of available stock i.e. items in SA households that are not being used and the owners would happily sell.
A very rough calculation shows potentially R1bn in the value of unused, good condition cellphones alone in South African homes.
It’s also worth noting the extraordinary volumes on online classifieds websites.
“One way of measuring the growth of the sector is to compare the old school with the new one.
“Thirty years ago, newspapers in South Africa would have carried approximately 150,000 classified ads (for goods and services) between them every day.
“In 2019, Gumtree alone has close to a million listings.”
It’s also under-appreciated that two second-hand cars are sold in SA for every new one.
The used car market is twice the volume of fresh metal.
“So, we already have a booming resale economy which is set to see rocketing growth in the next five years, thanks to a perfect storm of imperatives,” Cobbledick says, listing the following:
• It’s a tough economy and unlikely to get significantly better anytime soon, so money is tight and there’s a dual win in second-hand trading – making money on unwanted items and paying less for their replacements.
The potential upside for cash-strapped consumers is immense.
• Environmental considerations are driving a major re-think around fast, disposable fashion in particular – recycling is not a just a buzzword for plastic and glass, it very much applies to clothing as well.
• Thrift has gone mainstream– one-in-three adult women in the UK bought a second-hand clothing item from a bricks-and-mortar resale store and reported that approximately 25% of their closet was second-hand items.
• It has become trendy to downscale as Marie Kondo urges everyone to strip back to basics and to get rid of everything they don’t need.
• Most importantly, online access in SA still has considerable “headroom” or space for spectacular growth.
Only around half the population has internet access and much the same number have smart phones.
As those numbers propel upwards, and data costs finally move downwards, there will be an uplift in online second-hand trading.
“We hear a lot about retail statistics, trading volumes and a constant barrage of other data that reflects the ‘new product’ economy, but there’s a massive amount of money moving around the country for second-hand goods with all kinds of unreported implications.
“In many instances, this traffic displaces retail sales.
“The money that some retailers are losing is not vanishing from the economy, it’s simply being spent in other ways in a smart search for value by consumers in the tough economic climate.”