Selling Old Fashion Brands Becoming Big Business In India
Dellhi-based designer Onika Oberoi had set her heart on a particular Gucci bag only to realize, after spending a few minutes on Google, that it had been discontinued — but to her joy, she discovered a way to lay her hands on it. A second hand luxury website was selling a used one at half the price.
Selling old clothes to fund new purchases or buying little-used designer wear are no longer done furtively. Re-commerce sites, which sell pre-owned luxury and high-street apparel, footwear and accessories, are slowly catching on among fashionistas who want the best brands without burning a hole in their pockets.
As the desire to flaunt that Chanel or Burberry is curing Indians of their queasiness about wearing cast-offs, more than a dozen startups are tailoring businesses to suit a growing clientele.
Indian reselling sites and apps such as Confidential Couture, Elanic, Spoyl, Envoged, Zapyle and Refashion have drawn inspiration from international luxury second-hand marketplaces like Rebagg, Poshmark and Tradesy, and are challenging regular e-tailers such as Myntra, Flipkart, Amazon and Jabong.
“The market is as large as $2 billion a year and we have seen a surge in the user base as well as transaction rate,” says Aditi Rohan, co-founder of Elanic, an app-based platform to re-sell “gently-worn” apparel, which was started this September. She says they have 30,000 users and get about 300 to 400 listings of items a day.
Elanic received seed funding from Rebright Partners, Traxcn Labs and angel investor Aneesh Reddy. “We are looking at extending our product line-up from just fashion to accessories for women and products for men,” said Rohan, who is aiming to clock 2,000 listings a day by next month.
It’s a fairly simple system: A seller posts clothes or shoes that she no longer wants online, the re-seller picks up the products, checks, cleans, re-packs and prices the items — often at as little as 50% of the original cost (imagine a Burberry with a boutique price of Rs 85,000 going for under Rs 20,000) and puts it up for sale, where a buyer can negotiate further on the price. The site gets a commission of 15% to 20% on every transaction.
The challenge, though, is ensuring authenticity, quality and cleanliness, and making sure the clothes look as good as new. “Ensuring authenticity and quality is a big driver to sustain growth in the long term for us. We have 1 lakh registered users with average transaction size of Rs 5,000 to Rs 6,000, but logistics is a challenge as we have to pick up products from sellers, make sure they are in good shape and ensure smooth delivery,” says IIT Kharagpur alumnus Anandita Singh, co-founder of Envoged, which sells pre-owned luxury fashion.
To the surprise of most founders, a significant number of sellers and buyers are from tier II and tier III towns, which is why many of them are planning to expand operations to cities like Ahmedabad, Ludhiana and Chandigarh.
The entrepreneurs, however, agree that the current user base is inclined towards sellers. “There is more supply than demand at present but that will change over time,” says Singh. Some sellers are creating a whole range of products online and waiting for buyers.
Shubha V, 24, an IT professional in Bengaluru, for instance, has created a closet of 44 clothes on Elanic, and sold eight. She saw an ad on Facebook, downloaded the app and posted a photograph of a top she wanted to get rid of. Within 24 hours, it was approved by Elanic’s fashion expert and her potential customers responded with questions. Shubha has since sold several other pieces of clothing at a 30-40% discount on the MRP.
Though she’s made money off clothes sitting unused in her closet, Shubha says she’s not likely to buy pre-owned clothes. “So many e-commerce platforms are selling branded clothes at discounts, so I don’t see why I should buy pre-owned products. I guess some people don’t have apprehensions about buying used clothes but I do.”
Most startups in the space say this attitude will change. “The aim at present is to build the market and make consumers aware of it. Transactions will pick up as a normal consequence,” said Bhargav Errangi, founder of reseller site Spoyl, which is considering adding renting options on its platform.
Alok Mittal, an investor in Envoged, says younger people have no inhibitions about pre-owned products. “A 20-something can’t afford a Gucci on her own salary,” he explains. “Once they have a good experience and as the inventory on these sites improves, buyers will return. It is a natural process of evolution.”
Abhishek Goyal, founder of Tracxn and an angel investor in Elanic, says the market has potential to scale. “It could be even 10% of the overall retail market,” he says. Both Goyal and Mittal say the companies need to generate users’ trust by ensuring quality, especially since the model is in the nascent stage and is unproven.