Luxury goods get a second life online

Luxury goods get a second life online

The Fifth Collection is looking for more opportunities in Southeast Asia. PHoto: The Fifth Collection
The Fifth Collection is looking for more opportunities in Southeast Asia. PHoto: The Fifth Collection

In the constantly changing world of fashion, what's new can quickly become old and get shuffled to the back of the closet and forgotten. But some styles endure forever, and that is fuelling the growth of the second-hand vintage fashion business online.

"There is a pretty famous statistic that says 70% of a woman's wardrobe is never used, so despite the fact that there is an original owner, most of the things are brand-new and a lot of women know that," Nejla Matam-Finn, CEO of The Fifth Collection, an online provider of world-class vintage fashion in Singapore, told Asia Focus.

Her luxury vintage fashion platform last year raised US$1.4 million in seed funding from investors from Asia and Europe. It sees its customers as collectors who are serious about style and continually curating their wardrobes.

Mrs Matam-Finn said most of her collection themes reflected what customers want, and many customers in Singapore do not want super-high-end pieces. There are even products with entry-level prices as low as S$20, so for S$100 a customer can still get a whole outfit and can still "look the part".

Michael Finn, her husband and the site's co-founder, said the company was trying to "re-inject the luxury into second-hand luxury". Traditionally, the image people have of a second-hand luxury store is "not necessarily very glamorous", but they are trying to change that.

Trust is very important to the second-hand e-commerce business, said Mr Finn, and not only in terms of customers getting the product they expect. A growing problem is authentication and the company has taken the extra step to invest in authentication technology.

"What we do is we curate all the items on our website so that we can always make sure that the description and the picture are accurate. We do not hide anything; on the contrary we show every little flaw the product has," Mrs Matam-Finn said.

"We have very hands-on customer service. You can chat with it us, you can WhatsApp us, you can send us e-mail and generally we will make sure that we answer it within 10 minutes to a maximum of 24 hours. But it is pretty rare [in the industry] and this creates this whole trust in our second-hand products."

In terms of expansion, Mrs Matam-Finn said the company was looking at a few cities including locations in Southeast Asia, based on a philosophy of "start small and build strong". Mr Finn said the company had a very good network in Thailand but there was "no active plan right now" for a dedicated Thai operation.

"In Bangkok there are already customers who understand vintage, and even in the Thai style itself there are a lot of old things that are mixed in with new things," Mrs Matam-Finn said.

"Our business does not speak to every woman, so it is about approaching different kinds of cities."

A common mistake that e-commerce players make in Asia, in her view, is that the region is one big country which it is "clearly not". Therefore the challenge is to get to know the cultural differences.

"This is something we managed to do in Singapore where 99% of our customers are local people, which helps shape our understanding when it comes to how they consume vintage and 'preloved' fashion, where the preloved side is a very new concept, so it's more about understanding the cultural differences along the way," she said.

Mrs Matam-Finn said growing interest in sustainability was also helping create more interest in good second-hand products.

"We have seen that in the US after the recession and we have seen that in France as well, and once you have tried it once you will get hooked," she said. "I don't know any woman who does not want a good deal on a Chanel bag.

"Women are now actually more proud of shopping this way and the consumer in this region is evolving with a way of buying that is different."

"The value proposition is very clear," added Mr Finn. "The biggest hurdle has been cultural and I think that the global economic slowdown is actually encouraging people to look for more value and spend their money better, while environmental awareness is driving that a little bit."

Benoit Lavaud, group digital director of Bluebell (Asia), a luxury and lifestyle brand distributor of more than 150 brands including Jimmy Choo, Davidoff, Dior and Burt's Bees, told Asia Focus that the growth of the middle class was a big contributor to the growth of e-commerce in Southeast Asia.

"E-commerce is linked with middle-class growth and that's why e-commerce in China has boomed in the past five years while the middle class in Japan is settling," he said. "The growth, especially for fashionable products, is going to be in Southeast Asia where the middle class is evolving the most.

"People who have lots of money do not buy here because they would go to Europe or the US to buy their luxury items, and they do not buy online, but people who do not have that much money, they buy around the corner where they can negotiate, so e-commerce is about the middle class."

Mr Lavaud said Bluebell was currently running the Asian operations of Collector Square, a France-based specialist in second-hand luxury products with annual turnover of around US$15 million. He believes second-hand vintage e-commerce does not compete directly with the luxury industry but is more of a supplemental service to meet unique customer needs.

"Second-hand e-commerce is one of the ways to acquire your vintage and luxury items faster because first of all, if you want to buy a Hermes bag you know that you would have to wait for six months, so this is a way to acquire some bags faster than expected," he said.

"Some women are also looking for a specific colour and material and it is only available in vintage because it does not exist anymore in the store, so vintage is just another kind of shopping behaviour."

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