As traditional retail reels from the effects of slow consumer demand and increasing dependency on e-commerce, the resale or recommerce industry is basking in the glory of unparalleled growth, taking the world of retail by storm. The budding prospects of something that is not only a lucrative opportunity but also helps create a more sustainable platform for consumption, have caught the eye of many. With new ventures mushrooming throughout the world, their success is inspirational to many retail conglomerates looking to turn more eco-friendly.
Recommerce, although previously an obscure concept, is being looked at with a vastly different perspective now that the world has clamoured enough about the disastrous impact of the fashion industry on the environment.
Both millennials and Generation Z are embracing the concept of purchasing secondhand goods. This segment is twice more likely to engage with recommerce than older demographic, according to GlobalData, an independent retail analytics firm that performed research for the 2019 Annual Resale Report for recommerce apparel merchant thredUP.
Recommerce retailers are growing 20 times faster than the conventional retail businesses and 5 times faster than discount retailers, according to Coresight Research. The company forecasts that the total US apparel recommerce market will grow at a CAGR of 13 per cent, reaching US $ 33 billion in 2021. Clothing, shoes, and accessories currently make up almost 49 per cent of the total recommerce market in the US, and according to estimates by GlobalData, the total worldwide apparel market (resale and donation) will climb to US $ 51 billion in 2023.
THE RISE OF A BURGEONING OPPORTUNITY
The fashion industry is thriving on the millions of dollars consumers spend each year on products that accumulate in their wardrobes. Unfortunately, a fraction of these articles see the daylight while others lay forgotten at the back of their closets, hence giving rise to an opportunity for resale.
Fast fashion has found footing rapidly in India. The brands that are famous overseas enjoy the same limelight here. However, the faster they have gained momentum, the faster the consumer has realised the disadvantages and detrimental effects of these conglomerates. Recommerce, on the other hand, encourages circularity and therefore reduces the strain on the environment and the precious resources that go behind it. People nowadays have become more mindful and are looking to find alternatives to fast fashion. Pre-owned branded fashion being available at a fraction of the original prices provides an ideal solution.
Nohar Nath, Founder & CEO, Kiabza, says, “The country’s young population, the burgeoning middle-class and widespread access to Internet have propelled online retail sales. We, therefore, set up Kiabza to take advantage of the changing scenario and mindset of the general population, especially the youth of our country. The website aims to benefit from the increasing growth of price-sensitive and brand-conscious online shoppers in India. Resale is a big business abroad and global fashion recommerce companies like ThredUP, The RealReal, Poshmark, Vinted etc. have been operating successfully since the last few years with hundreds of million dollars in funding proving that this concept is one of the fastest growing businesses and here to stay.”
The recommerce industry itself is at a very nascent stage in India. However, it is positioned to benefit from various favourable market and consumer trends, including the accelerating shift of retail to digital channels, the increasing acceptance of pre-owned fashion, value-consciousness and the desire to embrace sustainability. The concept has grown in leaps and bounds in the last few years, thanks to companies like OLX, Quikr, Cars 24, among others, and is now well accepted in this market for almost all product categories.
KIABZA – THE BRAND AT THE HELM OF RECOMMERCE IN INDIA
The recommerce industry has started blooming in India and one homegrown solution to fast fashion is Kiabza. Launched in 2017, the platform deals in buying and selling of pre-owned branded apparel. Nath indulged in the business having had an in-depth knowledge of the textile world. With this wealth of practical experience in textile recycling and fashion, he saw an opportunity for Kiabza in India.
Kiabza has an inventory-based recommerce model where every item of clothing consigned is checked by an experienced quality control team. No product can be listed on Kiabza’s website until it passes the authenticity, hygiene and quality tests. The company follows a channel of C2B2C (Consumer to Business to Consumer), i.e. the products come from the consignor/seller, are bought by Kiabza and sold back to consumers.
Kiabza unlocks and recirculates underutilised branded fashion to address the demand of consumers. Kiabza’s products are therefore procured from brand-conscious consumers, basically anyone who loves buying branded clothes, has worn them sparingly which means they are in good condition for resale. The brand offers the sellers the opportunity to sell their fashion as research shows that women only use 35 per cent of what’s in their wardrobe and for men that percentage is 50 per cent.
Kiabza has an approved list of over 1,500 national and international brands and an inventory from over 300 brands which includes a wide mix from fast fashion, high street, premium and luxury brand categories such as Forever 21, Old Navy, Zara, Nike, American Eagle, Banana Republic, Hollister, Abercrombie & Fitch, Ralph Lauren, Armani and Burberry to name a few.
Speaking on key areas for revenue generation, Nath says, “40 per cent of our customers are from the metropolitan & Tier-1 cities and balance 60 per cent are from the Tier-2 and Tier -3 regions. We are getting steady orders from the North & Western region of the country including Punjab, Haryana, Delhi and NCR regions. Along with this, Maharashtra and Karnataka including Mumbai, Pune and Bangalore have contributed significantly to our revenue generation.”
The brand has also found a noble solution for the leftover stock in their warehouses. Kiabza presently donates its unapproved or unsold products to its NGO charity partners Teach for India and Vidya. By 2021, they intend to create their own NGO, ‘The Kiabza Foundation’.
Although the brand is currently only in apparel, it has plans of introducing other pre-owned branded products like ethnic clothing, footwear, bags and other fashion accessories like belts, wallets, sunglasses, etc. for resale on its website from the year 2021. Prices of the products range anywhere between Rs. 300 and Rs. 3,000, and the average ticket size is currently around Rs. 700.
The venture has gained widespread acceptance due to its innovative ideas and marketing strategies. “Our particular focus is currently on social media to reach our target consumers since our TG is 18-35 years old, whose source of information is online platforms. We also believe collaborating with celebrities and influencers will be beneficial for creating brand awareness, so we recently partnered with the stars from the movie Pati Patni Aur Woh and have original clothes of Ananya Pandey, Kartik Aryan and Bhumi Pednekar live on our website,” says Nath, on the company’s attempt at capturing the younger gene of consumers by integrating Bollywood culture into the mix.
“We are a young company, learning at every step we take. Our marketing strategy will integrate a number of targeted online marketing channels, such as associates program, sponsored search, social and online advertising, and user generated content in future,” Nohar Nath, Founder & CEO, Kiabza.