We have all heard about e-commerce. Not many people have heard about recommerce. According to Wikipedia, recommerce or reverse commerce, refers to the process of selling previously owned, new or used products, through physical or online distribution channels to companies or consumers willing to repair, if necessary, and reuse, recycle or resell them afterwards.
If you are looking to start, or invest in a business in 2022, you need to understand what businesses are going to thrive in the current world of reduced consumption and demand. We are entering into an age of thrift and austerity. Below is a list of five second hand (or recommerce) businesses that are going to thrive in 2022.
1) Second-hand Clothing
By 2028, 13 percent of the clothes in women's closets are likely to be secondhand, up from 6 percent in 2018 according to ThredUp. The secondhand market, which includes resale, thrift, and donations, has grown 21 times faster than the retail apparel market between 2016 and 2018, to a $28 billion industry in 2018, and it is projected to be $51 billion by 2023. The main growth driver there is the resale market, which is expected to quadruple between 2018 and 2023. Sales in the apparel rental market have also surged, becoming a $1 billion industry in 2018 that could reach $4.4 billion by 2028, according to GlobalData.
This trend in second hand clothing started before COVID-19. The pandemic is going to accelerate its growth because the younger generations are also concerned about the environment. Clothing manufacturers pollute the environment big time. Secondhand apparel is on track to become bigger than fast fashion within a decade.
2) Used Cars
Sales of new automobiles are declining faster than a Korean midsize down a mine shaft. According to information from Statista, new vehicles sales peaked in 2018 at 78.9 million units. In 2019, 75 million new cars were sold. In 2020, 64 million units were sold.
In addition to the rise of shared mobility services such as Uber and Lyft, people are starting to question the wisdom of buying new cars. People are starting to the understand the total cost of car ownership: when one factors in finance, maintenance, insurance, parking, fines, taxes, fuel and the stress of having to share your lane with millions of psychopaths unless you are doing big mileage it may work out cheaper to ride-hail than to buy.
3) Pre-Loved Watches
In November 2019, the New York Times ran an article “Secondhand Is Moving Up in the Watch World” (https://nyti.ms/2WNWLAA). The article quotes the following stats. The Luxury Goods Worldwide Market Study by the management consultants Bain & Company calculated that the personal luxury goods secondhand market would be worth 22 billion euros ($24.2 billion) by the end of 2018, and has grown by an average of 9 percent every year since 2015.
The pre-owned watch market already is worth $16 billion annually, according to an estimate by Jon Cox, an analyst at the financial services company Kepler Cheuvreux. Mr. Cox said pre-owned represents almost a quarter of the overall watch market. Yet its retailers say their market segment is still in its infancy.
4) Used Capital Equipment
The global response to COVID-19 was impressive: closed borders, travel bans, paralyzed supply chains, and export restrictions. Given that the virus started in China, and given that China has been at the centre of the world’s globalization in the past 20 years, some have questioned whether this could be the end of globalization.
In April 2020, Forbes issued a piece questioning whether the post coronavirus world may be the end of globalization. (https://www.forbes.com/sites/kenrapoza/2020/04/03/the-post-coronavirus-world-may-be-the-end-of-globalization/#496d092e7e66). Foreignpolicy.com speaks of a world with a different and more limited version of global integration (https://foreignpolicy.com/2020/04/17/globalization-trade-war-after-coronavirus-pandemic/). How will this new version of globalization affect access to new capital equipment? You need to identify those markets most likely to be affected and find ways in which you can source used capital and equipment in order to fill the gaps.
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