What: There are benefits for luxury goods in the secondary market both for sellers and for consumers.

Why it is important: While the luxury resale market holds significant promise for sellers and consumers, there are challenges related to authenticity, profitability, and the lack of commitment from brands and luxury clients that still need to be addressed.

The benefits of the luxury resale market include providing sellers with cash and offering a wider segment of consumers the opportunity to buy luxury brands they may not be able to afford. It allows consumers to give their unused luxury goods a new life. Additionally, the resale market has the potential to become more structured and mature over time, similar to the car market.

However, there are several challenges in the luxury resale market. One major challenge is ensuring the authenticity of secondhand luxury goods, as it is labor-intensive and prone to errors. At present, no secondhand player can offer a 100% guarantee of authenticity. Managing secondhand inventory is also costly and requires a critical mass of sellers and buyers for a significant "network effect". There is a lack of commitment from brands to participate in the secondary market, with some brands using it to offload unsold products or limit demand spillover to competitors. The emergence of a small secondhand market can reinforce the consolidation of mega-brands and push middle-class consumers towards more established brands.

Technology, such as blockchain and RFID, has the potential to address the authenticity issue in resale. However, the adoption of these technologies is still in its early stages.

The state of luxury resale