Secondhand Retail at Risk Despite Bargain Hunting

Key Takeaways:

• Germany, France and the UK, the largest Western European economies, saw the weakest trends, with average monthly retail sales down 4%, 3% and 3% in France, Germany and the UK, respectively, 2023, according to EuroStat

  • The European consumer remains weakened and is likely to be searching for value when shopping for discretionary items, potentially a positive for second hand and budget retailers

• While certain secondhand retailers in the cohort are seeing positive momentum in their mobile app performances in Western Europe, many are struggling, potentially due to competition from value oriented Chinese retailers, in particular Shein and Temu

  • In 2023, Tradera, The RealReal and Vinted saw downloads rise, up 37%, 17% and 8% YoY, respectively, while downloads at Vestiaire, DePop and eBay fell 16%, 13% and 6%, respectively, marking the second consecutive year of declines

• In order to see continued growth, secondhand retailers need to have enough buyers and sellers (and merchandise) to maintain an ecosystem that drives repeat visits, which can be upended by service fees. Without that critical mass, it's difficult to gain traction and could be why certain apps are faltering

  • DePop, eBay and Vestiaire have seen MAU growth decline in 2023, down 12%, 6% and 5% YoY, respectively, while Vinted’s MAUs rose 24% YoY, on top of 50%, 42% and 21% YoY in 2020, 2021 and 2022, respectively

• In 2023, the average churn rate for the cohort was 29%, up 1ppt from the prior year, potentially driven by a surge in the churn rate at Temu - from 31% in 2022 to 40% in 2023

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