Japan's Used Goods Market Set to Hit 4 Trillion Yen by 2030

Article source: JIJI.COM

Japan’s secondhand market for clothing, accessories, and other goods is experiencing rapid growth. This expansion is driven by the rising popularity of flea market apps, a growing environmental consciousness inspired by the "mottainai" (or "not to waste") mindset, and a broader trend towards frugality amid recent price increases.

Over the past decade, the market size—excluding used cars—has grown to nearly 3 trillion yen. As young consumers, dubbed "reuse natives," increasingly embrace secondhand shopping, it’s estimated that the market could reach 4 trillion yen by 2030.

Impact on GDP and Consumption Trends

In June, the Cabinet Office included a graph titled "Sales of Second-hand Goods and Consumption of Durable and Semi-durable Goods" in materials submitted to a ministerial meeting for the "Monthly Economic Report."

The report notes that while secondhand goods transactions are not recorded in Japan’s gross domestic product (GDP)—since they merely represent a transfer of ownership rather than the creation of new value—the expansion of this market remains significant. As a result, the growth of secondhand goods sales, which do not boost GDP, must be considered when analyzing future consumption trends.

According to the report, Japan’s domestic market for secondhand goods has nearly doubled, from 3.2 trillion yen in 2010 to 6.2 trillion yen in 2022. Notably, the secondhand market for clothing and home appliances—excluding automobiles—has tripled, growing from 1.1 trillion yen in 2010 to 2.9 trillion yen in 2022.

The proportion of secondhand goods in Japanese households' total purchases of durable and semi-durable goods has also increased, from 8.6% in 2010 to 14.3% in 2022. A Cabinet Office official emphasized that this trend reflects a combination of cost-saving motives and environmental awareness, signaling the need for continued observation.

Insights from Industry Experts

Atsushi Yamauchi, chief of the editorial department at the Reuse Economic Newspaper, which provided secondhand market data to the Cabinet Office, attributes this market expansion to several factors. "In addition to the popularity of flea market apps like Mercari, the COVID-19 pandemic led more people to spend time at home, prompting them to sell unwanted items," Yamauchi explains.

He also highlights that younger generations—who are accustomed to smartphones and flea market apps—are driving the market. These "reuse natives" tend to be more financially conscious and less resistant to purchasing secondhand goods compared to older generations.

Yamauchi notes that this demographic is savvy in how they allocate their spending, often opting to buy new items for long-term use and secondhand goods for items they expect to replace frequently. As a result, the secondhand goods market, excluding automobiles, is projected to expand to 4 trillion yen by 2030.

The Bicycle Market's Shift to Reuse

The secondhand market has expanded to include bicycles, with retailers like Cycle Base Asahi leading the charge. This bicycle retail chain, which operates around 450 stores nationwide, now purchases and sells used bicycles, including electrically assisted and sports bikes, through both physical stores and online platforms. In June, Cycle Base Asahi expanded its offerings to include regular city bicycles, further diversifying its range.

To ensure quality and safety, the company’s reused bicycles undergo maintenance by qualified specialists, and city bicycles are subject to a standard of having been purchased within the last four years. A public relations representative from Asahi remarked, "We want to spread awareness that city bicycles, which are widely distributed, can be sold secondhand like cars, and to revitalize the shrinking bicycle market."

Asahi’s reused bicycles, which vary in condition and type, can generally be purchased for 50% to 80% of the cost of new bikes. In the year leading up to March 2024, the number of purchased bicycles increased by over 50%, while sales grew by more than 70%. The company plans to continue enhancing logistics and expanding sales, with e-commerce at the core of its strategy.

A Growing Force in Childcare Products

AVANCE, a Tokyo-based company, operates "Ecolife Coco," a secondhand shop that specializes in childcare products and children’s clothing. Since opening its first store in 2018, the company has expanded to 18 locations, with sales at each store increasing by about 20% annually. Two more stores are set to open by the end of August 2024.

Kaori Kasai, CEO of AVANCE, notes that when they first launched, there were concerns about the acceptability of secondhand goods. However, with the rise of flea market apps, many people have become more comfortable buying used items. Kasai explains, "We’re also feeling the impact of rising prices," which has contributed to the growing demand for secondhand products.

Ecolife Coco sells items like children's clothes, strollers, and toys for around 70% less than new products. The store places a strong emphasis on hygiene and maintaining a consistent stock of goods in convenient locations, leading to a loyal customer base.

Kasai also emphasizes a unique advantage of buying secondhand items: "At the same price, you can purchase high-quality second-hand items that may last longer than inexpensive new items." She adds, "Once you use it, many mothers become addicted."

The Future of Secondhand Consumption

The growth of the secondhand goods market, driven by Reuse Natives, is both environmentally friendly and beneficial to consumers’ wallets. However, it raises an economic challenge: if the savings from buying secondhand goods are not reinvested into other forms of consumption, it could lead to a contraction in overall personal consumption.

The key question is whether a new economic structure can be developed to link the expansion of the secondhand market with broader economic growth. Both businesses and the government are being called upon to adapt to this evolving landscape.

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