How online second-hand marketplaces are promoting a circular economy and replacing the fashion industry’s throwaway culture
By: George Zisa
The fashion industry has received strong criticism from consumers and investors for promoting fast fashion in the last few years. The fashion industry is responsible for 20% of global wastewater and 10% of global greenhouse gas emissions. In 2020 alone, an estimated 18.6 million tonnes of clothing products were discarded by consumers, ending up in colossal landfills, costing countries billions in waste management costs.
However, solutions are starting to gradually come into the mainstream market to resolve the problems of fast fashion, overconsumption, excess waste, and an increase in GHG emissions. Consumers are becoming more aware of climate change issues, causing a turn away from what is a monopolised fast fashion industry.
As a result, with ideas of sustainability gaining a foothold in consumers' shopping habits, the market is starting to adjust to these new forms of demand, becoming a key driver of a circular economy. New companies are coming into play by implementing sustainable policies to move away from a throwaway culture and transition to a circular way of managing clothing products. In an interview with Emerging Europe, Amelie Gregory of Save On Energy says, “The rising popularity of online resale platforms such as Depop, StockX, and Vinted, points to one of the biggest trends of 2020 being vintage fashion and thrifting.”
Vinted is a peer-to-peer online marketplace that allows users to purchase, sell or exchange personal clothing items and other used products. Milda Mitkute and Justas Janauskas from Lithuania founded the company in 2008 and introduced an online prototype without any specific marketing strategies or efforts. The startup began to grow organically attracting users thanks to the development of a forum-style community. In 2017, the company came under new management and by 2020, it saw a massive boost in revenue, which could be attributed to the pandemic and increase in online shopping. As of May 2021, the company is valued at 4.5 billion USD.
This business model shows another way of consuming, giving clothes and other products a longer life without having to throw them away and therefore, “contributing to a seismic shift in the second-hand fashion market, enabling more sustainable and socially-responsible shopping habits.” as stated by Vinted CEO, Thomas Plantenga.
Today, second-hand fashion has boosted its market revenue by 250$ million, making it one of the leading sectors in the fashion industry, allowing consumers to be more eco-conscious and promoting a more circular-oriented economy. Vinted is encouraging this new form of sustainable purchasing and is promoting it through its marketing strategy. As Sigita Žvirblytė, the app's sustainability manager states: “Vinted has a strong potential to drive change in the fashion industry, and to alter consumer habits to more sustainable ones. This change encourages people to focus on reusability, and the multi-ownership of goods will become natural.”
The company mainly targets a client base of users concerned with clothing waste who want to give a second life to clothes and consumers looking for clothing at low prices. Vinted, alongside other apps of this kind, is encouraging a transition in the fashion market towards sustainability.
However, like many fashion companies and delivery businesses, other issues compromise sustainability principles, like emissions produced by shipping and logistics. Vinted board member, Carolina Brochadohas, stated that the transportation piece is something that needs to be solved. Second-hand marketplace apps are looking for more ESG-friendly ways to ship their products to buyers. Some of the solutions that are currently being implemented include the use of PUDO lockers. The lockers will be allocated in densely populated areas, so consumers can collect or drop off their items instead of having them directly shipped to their homes. Another solution is the use of electric vehicles (EVs) to limit emissions produced by shipping transportation and logistics, which accounts for more than half of all environmental shipping costs. In addition, projects for common storage warehouses are being revised to create hubs for used products.
Consumer knowledge and awareness on issues regarding climate change, overconsumption, and excess waste production are increasingly growing, influencing the market and giving rise in popularity with these eco-friendly clothing apps. With sustainability as an integrating part of their brand identity and more investments in forms of circular economy, the fashion industry itself is starting to respond to these stimuli.
Using Vinted and other types of eco-friendly apps is not a complete solution when it comes to resolving overconsumption and the emission debt caused by the fashion industry. Nonetheless, it’s a step forward toward a greener, more circular economy and a more eco-conscious mindset.
By turning consumers and the market to a more eco-conscious way of purchasing products, the fashion industry is likely to transition from a throwaway culture to a more circular economy-oriented way of purchasing clothing items, prompting new and old companies to reassess their production and supply chain strategy allowing them to make changes more sustainably.