Japan’s luxury secondhand sector gains popularity as tourism booms

While Japan has long been established as a premier hotspot for vintage luxury products, particularly designer bags and accessories in pristine condition, the country has recently experienced an unprecedented surge in demand for these meticulously maintained secondhand treasures.

Attractive market

Geo Holding, the parent company of secondhand clothing retailer 2nd Street, reported strong sales performance in its latest financial statement. Both domestic and international sales of 2nd Street stores showed robust growth, particularly in luxury secondhand merchandise, amid rising consumer inflation and expansion of the resale market.

The company aims to strengthen its market position by expanding e-commerce services and opening new 2nd Street locations in Japan and overseas, focusing on achieving sustainable growth and improved profitability.

The Reuse Economic Journal estimated sales of used clothing and luxury goods reached 818.1 billion yen (US$5.4 billion) and accounted for 28.2 per cent of Japan’s total secondhand industry in 2022.

The domestic market exhibits robust engagement, with prominent retailers such as Beams and United Arrows implementing sophisticated luxury resale operations through initiatives like “Beams Re:Style” and their specialised refurbishment program.

Earlier this year, luxury resale wholesaler LePrix, which sources inventory directly from brands, opened its first Japanese office in April.

Market drivers

“While nothing definitive can be said, several factors likely contribute: economic instability leading to increased secondhand sales in Japan, growing secondhand demand in other countries, a weakening Japanese yen, and high quality expectations,” Kei Ogasawara, founder of The Knockoutism, told Inside Retail.

In April, the Japanese yen sank to a 34-year low against the dollar. Paris-based consulting agency Luxurynsight said price differences for luxury goods between Mainland China and Japan almost reached the highest level in 18 months.

With travel to Japan becoming more affordable, international tourists are flocking to the country. According to the Japan National Tourism Organization, foreign visitors to Japan hit a record 17.8 million from January to June this year.

As other Asian countries reduce their purchases of new luxury goods, interest in high-quality pre-owned items has surged. Japan’s reputation for pristine, well-maintained luxury items has established it as the premier destination for second-hand shoppers across the region.

Chinese social media platforms, particularly Douyin and Xiaohongshu, along with live streaming, have been crucial in driving Japan’s secondhand luxury boom among Chinese consumers. On Xiaohongshu, the hashtag #JapanVintage has garnered more than 8.5 million impressions.

“Japan houses a treasure trove of well-preserved second-hand luxury goods and collector’s items, making thrift shopping a novel touristic venture. The unique Japanese practice of reconditioning and reselling used items has not only captivated foreign tourists but also exported its business model to affluent regions like China, Hong Kong, and Singapore,” Takuya Takeyama, founder and CEO of Isea, said.

Ogasawara added: “Contemporary products tend to be popular across luxury secondhand markets”.

Global expansion

Japanese secondhand retailers are not content with just domestic success – they are actively pursuing international expansion to tap into growing global demand for pre-owned luxury items. Several major players are making strategic moves to establish their presence in key overseas markets.

Geo Holding, the parent company of secondhand clothing retailer 2nd Street, is now looking to more than double its store count in the US to 100 by 2028, according to Nikkei Asia. Entering the US in 2018, 2nd Street had 43 stores in the country at the end of November. Besides the US, the company currently operates stores in Taiwan, Malaysia and Thailand.

Meanwhile, Japanese thrift store operator Komehyo Holdings is aiming to triple its overseas sales in four years from around 10 billion yen ($63 million) at present, boosting them to 150 billion yen in the future, according to The Japan Times. 

Opening its first overseas outlet in China in September 2018, the company now operates 21 stores across Taiwan, Singapore, and Thailand. In April, Komehyo established a Hong Kong unit to oversee its Asian operations.

Bookoff is also planning to increase its footprint in the US.

Further reading:Japanese label Descente taps into Southeast Asia’s high-end sportswear industry 

The post Japan’s luxury secondhand sector gains popularity as tourism booms appeared first on Inside Retail Australia.