The “cool factor” that drives second-hand luxury sales in China

The following is an excerpt from Jing Daily’s latest market report, Capitalizing on China’s luxury online resale boom. Filled with case studies, revenue-generating best practices, interviews with the spotlight, and detailed profiles of domestic Chinese resale platforms, the 68-page report is crucial for anyone looking to understand the huge demand potential. second-hand luxury goods in China.

The rise of social media, short videos, and dedicated interest-based platforms has given second-hand luxury a millennial and mouth-watering shine for Gen Z, enabling connections and the formation of communities among enthusiasts. The fashion-focused social platform Xiaohongshu (also known as Little Red Book or RED) is a top destination for young consumers to show off their personal style and for independent stores to promote themselves to a grassroots. young users who want to spend money. Launched in 2013, Xiaohongshu has 100 million monthly active users, mostly women, over 70% of whom were born after 1990.

And while Xiaohongshu initially developed as an Instagram-like app for users to display their lifestyle, more recent social trends and official disapproval of ostentatious wealth exhibits have spurred the creation of more content around the vintage shopping and micro-trends like MIY (make-it-yourself).

In April 2021, Xiaohongshu released new community guidelines to prohibit excessive promotion of luxury among users and to require disclosure of advertisements and sponsored content. In August 2021, Xiaohongshu announced that he would remove links on content leading to e-commerce sites, including Tmall, Taobao, WeChat mini-programs and even his own online store. The only exception is links that appear during live broadcasts.

Xiaohongshu did not give details of the decision, other than saying it aims to “improve the user experience.” Xiaohongshu already requires that all sponsored content be registered on the platform and clearly labeled as such, which has prompted some influencers to adopt more subtle promotional strategies to circumvent the rules. So removing all commercial links from Xiaohongshu’s posts creates another hurdle and will, in theory, lead to more authentic and objective influential content.

While the new policy risks alienating users who are used to being able to shop as they parade, the move reflects Xiaohongshu’s greater ambition to strengthen its own e-commerce ecosystem (as Douyin has done). ), and accompanies another set of new measures aimed at getting brands and merchants to open stores on the platform. Xiaohongshu has everything to gain by attracting its 300 million users to watch live ecommerce broadcasts, where external commercial links are still allowed and the platform’s own stores take priority.

What is emerging in China is an environment in which resellers and content creators must be increasingly creative, as platforms change their e-commerce policies as government pressure intensifies on businesses. technological. These trends are unlikely to completely dry up interest in luxury or fashion influencers. Rather, it means that users have to take different approaches, perhaps mixing and matching looks that combine new designer pieces with vintage finds and promoting sustainability in the process.

It also creates an opportunity for influencers focused on second-hand fashion and luxury, as well as resale platforms. Even TV shows known to promote an upscale lifestyle like the summer 2020 hit Just thirty, incorporated a reference to the second-hand luxury boom with Shanghai-based Vintage Musevie boutique making an appearance.