Secondhand garments rarely set pulses racing, unless you're a canny Gen Z-er with great fashion sense and a keen eye for a bargain. But for companies like Depop, pre-worn garments are big business—and the online apparel marketplace was acquired for US$1.625 billion by Etsy earlier this month.
It's estimated that the second-hand clothing market is valued somewhere between US$30 billion and US$40 billion, with a projected growth rate of 15-20% per year over the coming decade, according to Boston Consulting Group.
And we’re not talking about bargain bins, flea markets, car boot sales or even vintage clothing stores—digital natives these days prefer to scroll their way to their next find. This shift in consumer habits saw Depop's average annual sales growth reach 80% for each of the past three years.
By the numbers
Others hope to repeat the success of the company’s billion-dollar sale. Vinted, a Lithuanian second-hand clothes marketplace, recently secured a €250 million series F round led by EQT Partners and an IPO may be up its sleeve for 2022.
There have also been eight acquisitions of European independent fashion platforms so far this year, up from five apiece in the whole of 2019 and 2020. Deals worth a total of US$2.13 billion have already been booked so far in 2021, which is on track to surpass prior highs.
Much more than clothes
It is not just clothes that have investors on a shopping spree. Across consumer categories, there have been 143 European online marketplace deals so far in 2021 worth a combined US$26.2 billion—well over double the value booked last year. The largest of these saw UK used car platform Cazoo acquired by NYSE-listed SPAC Ajax I for US$7 billion.
Others are sure to follow. Dutch housing platform Housing Anywhere is reportedly looking to make between four to six bolt-on acquisitions, while the CEO of Swedish online fashion marketplace Ytrade Group, David Knape, told Mergermarket he has his sights set on e-commerce and software firms.
Meanwhile, having bolstered its real estate offering with the acquisition of online property management platform Vermietet.de in May, Scout24 may soon snap up other platforms to expand its proposition.
Jeff Bezos may be hanging up his hat to pursue a new hobby in spaceflight 25 years after founding Amazon, but online marketplaces are only just getting started.
