Alibaba Helps Brands Get a Piece of the $20 Billion Resale Market

Sneakerheads have known for a while that there is a lot of money in the reselling of apparel, with the secondary sneaker industry estimated between $1 billion and $2 billion, a fragment of the $20 billion resale market. The key players have mostly been independent sellers and a small yet mighty number of resale companies like Stadium Goods and GOAT. Now e-commerce giant Alibaba is launching a new channel that will allow brands to operate their own online stores for idle assets.

Part of the used-goods platform Idle Fish, the channel will first be piloted with electronics brands before expanding into apparel and other categories. These online stores will differ from traditional e-commerce by only selling overstock, samples and recycled or used goods, while still offering the verification of shopping directly from a brand.

“We’re bringing the secondary and idle-goods market from the C2C market to the B2C market,” said Shi Jian, head of the channel. “By expanding the market beyond individuals to businesses, we want to help more firms and brands to maximize the value of their idle assets and refunded products.”

The RealReal Los Angeles store
The RealReal opened its second store in Los Angeles in 2018, a sign of the resale industry’s continued growth.
CREDIT: Courtesy

The resale market has boomed in the past two years due to both an increase in sustainability consciousness and frustration with fast fashion. The desire for an individual look without the negative environmental impact has allowed companies like ThredUp, The RealReal and Depop to thrive; The RealReal has partnered with Stella McCartney this year, while ThredUp launched its “Upcycle” project with Reformation and Cuyana.

Unlike previous services of this kind, which allowed for a greater degree of unreliability and individual error, the new wave of platforms are strict about quality control and return policies. This legitimacy has earned the attention of big brands, which want to find out the resale value of their own products and participate in this new market; if an item is known to have a high resale value, a customer might be more willing to purchase it.

Following the success of these partnerships, small brands looking to capitalize on the market will have an avenue through new channels like Alibaba’s launch at Idle Fish. The resale industry is forecast to double in value to $41 billion by 2022 and account for 11 percent of total retail sales, according to a 2018 report by ThredUp. As customers increasingly look at a company’s sustainable practices before buying, brand participation in resale programs is only expected to grow.

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