The second-hand market is showing resilience despite the tough trading environment, growing 10% year-on-year thanks to the impacts of Covid and slow economic growth.
Consumers are now seeking alternate shopping avenues, says Warren Pratt, industry specialist of retail at FNB Franchising.
“These businesses traded well through Covid, and indications show that they will continue to trade positively going forward. The second-hand market is unique in that it catches both parts of the economic cycle.
Read our latest Property360 digital magazine below
“The parts they catch is buying and selling of second-hand goods, the selling of new goods, and secured and unsecured lending.”
Retail shopping
The second-hand goods retail trade is often viewed incorrectly as one that caters for the lower LSM market. However, the global trend towards items such as high-quality furniture, repurposed items, gold, electronic equipment – such as cell phones, laptops and musical equipment, has seen the industry attract buyers that wouldn’t normally consider second-hand purchases, Pratt says.
Trade-in
There are stores that give good discounts when you return your product for a newer vision of the same product, especially in the technology sector. This trend has driven growth in the second-hand goods market as some consumers prefer to buy from the resellers due to the discounted price.
Credit
The sector also provides secured and unsecured lending as many in the country have irregular income and high debt levels, and so turn to second-hand good stores that offer unsecured advances. Some companies in the sector offer secured loans to consumers using personal items such as cell phones, jewellery and laptops.
“Due to the need in the market for these types of businesses, we should see a growth in new stores being set up over the next 12 months,” he says.
“In the international market, we have seen retail shops selling high-end clothing products. In the South African market, this has been slow, however, our view is that the market will also adopt this trend.”
Pratt adds: “While there has been slow but steady growth over the past 12 months up to June 2022, the last four months saw a large number of stores within the industry growth of between 5% and 10%, and this trend is set to continue.”
IOL BUSINESS