E-COMMERCE | Staff Reporter, China

Weekly News Wrap: Luxury buyers turn to second-hand goods; Restaurant spending decline drags China's economic growth

And Tata Group looks to buy Indian online retailers.

From Reuters:

China’s love for luxury is spilling over into the once shunned second-hand goods sector, with online stores surfing a wave of pent-up demand from shoppers, led by Millennials, who have been forced into belt-tightening by the coronavirus pandemic.

The rapid proliferation over recent years of second-hand luxury sales online platforms have helped fuel an expansion of the market, similar to those of U.S. online luxury reseller The RealReal Inc or Europe’s Vestiaire Collective.

“Our income recorded a surge this year during the pandemic as offline stores are mostly closed,” said Xu Wei, founder of Plum, a second-hand luxury products company in Beijing which is especially popular with Millennial women from China’s lower tier cities.

Chinese consumers have traditionally shunned second-hand goods, though that has undergone a shift over the past decade or so led by younger, more environmentally conscious consumers looking for affordable high-end goods.

“Compared to completely new products, second-hand products are more economical for them,” Xu said. Sales growth at Plum have averaged over 25% month-on-month in the first half.

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From Bloomberg:

China’s hotels and restaurants, one of the hardest-hit sectors of the economy during the coronavirus pandemic, remained a significant drag on growth in the third quarter even as the recovery gained momentum.

Output in the sector fell 5.1% from a year ago, the statistics bureau said Tuesday in a supplemental report on GDP. That was smaller than the 18% decline in the second quarter. For the first nine months of the year, the sector’s output was down 19.1% compared with the same period in 2019.

Spending has not yet returned to pre-Covid levels, with retail sales in the first nine months of the year down about 7% compared with the same period last year.

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From Bloomberg:

Tata Group, India’s conglomerate that sells almost everything from cars to apparel and steel, is seeking to buy Indian online retailers to beef up its presence in e-commerce, people familiar with the matter said.

The group has reached out to IndiaMart InterMesh, a business-to-business marketplace, for a potential stake purchase, the people said, asking not to be identified as the plans are confidential. IndiaMart’s shares have surged 142% in Mumbai this year, giving it a market value of about $2 billion. Supermarket Grocery Supplies, commonly known as BigBasket, is also amongst Tata’s potential investment targets, one of the people said.

Deliberations are at an early stage and there’s no certainty Tata’s pursuit of the assets will result in transactions, the people said.

Read more here.

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