Resale platforms are getting aggressive | PYMNTS.com
The second-hand market continues to thrive, as resale platforms Poshmark and thredUP announced their results in separate announcements on Tuesday (August 10), with the two companies doubling their investments in their platforms in an attempt to gain the upper hand.
Poshmark, for example, has added a myriad of new features over the past few months to retain buyers, including notifications when another buyer is interested in a certain item and recommendations when an item of interest is sold. For sellers, the platform introduced a price suggestion tool to help them list items more efficiently, which has improved sale rates.
As part of an extension of its social commerce functionality, Poshmark also launched a store within the Snapchat photo-sharing app last month, which allows consumers to browse and buy without leaving the platform. form of social media. Almost 80% of the daily active users using Poshmark Mini on Snapchat are Gen Z shoppers.
For thredUP, the focus is on partnering through its Resale as a Service (RaaS) platform, which is currently used by LG, Fabletics, Farfetch and others. CEO James reinhart said the RaaS partnerships “only worsen our sourcing advantage in this industry.”
“If you think of the markets, they’re all supply driven,” he told investors. “It doesn’t matter whether it’s Airbnb, Doordash or Uber, all of these markets are ultimately aimed at capturing the supply.”
thredUP is also trying to increase its capacity to process incoming goods. Unlike Poshmark, which has no inventory, thredUP receives bags of discarded clothing from sellers and processes them for sale on its platform. The company has increased its processing capacity by more than 40% this year, but processing times still reach up to 12 weeks, which the company is trying to fix by investing in automation.
In June, thredUP released its ninth annual second-hand market report, predicting it will reach $ 77 billion by 2025, up from a current value of $ 36 billion. About $ 47 billion are expected to be on resale, which thredUP defines as the second hand sector which includes “more organized assortments”. The report also found that 86 percent of consumers have bought or are ready to buy second-hand clothing.
“When you combine that with the number of new sellers coming into the market, I think you have the ingredients for an industry that will continue to grow fairly quickly – not over the next few years but over the next 10, 15, 20. years. years, ”Reinhart told investors and analysts on a conference call. He added: “Now is the time to be more aggressive.”
Officially, Poshmark said its second-quarter gross value of goods (GMV) increased 25% to $ 450 million, and revenue rose 22% to $ 82 million. Meanwhile, thredUP saw a 27% increase in its total revenue to $ 60 million.
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Poshmark and thredUP profits come just days after luxury consignment competitor The RealReal said it hit a record GMV of $ 350 million in the second quarter, up 91% year on year and 53 % from 2019. Still, The RealReal struggles to turn a profit. , and executives told investors it would be unwise to provide a break-even timeline amid COVID-19 uncertainty.
Both Poshmark and thredUP are focused on expanding their horizons internationally, with thredUP last month announcing its imminent acquisition of the Bulgaria-based remix resale platform.
While executives are wary of Remix’s specific plans as the deal has yet to close, Reinhart said thredUP plans to invest in the company’s product offerings and processing infrastructure to speed up growth in a region of Europe that has been neglected.
“We can invest in this as a stepping stone to Europe, both central and eastern, and then as we think about relocating to western Europe,” Reinhart said.
To see: Acquisition of thredUP makes Europe the next resale battleground
Poshmark is also seeking opportunities overseas, launching earlier this year in Australia and currently gearing up for a launch in India in the coming months. The company has already hired a Managing Director for India and is in the process of building a team in the field.
“India is one of the fastest growing e-commerce markets in the world and has a vibrant culture of reselling, saving and buying pre-loved,” CEO Manish chandra told investors to explain the move.
Poshmark had previously hoped to expand to the UK later this year, and although Chandra said he couldn’t comment on specific plans, the CEO said he intended to continue walking towards d ‘other countries, “continuing with English-speaking countries, then moving beyond that.” Poshmark has also been present in Canada for two years.