As a pioneer in online marketplaces brokering peer-to-peer transactions across every consumer product category imaginable, Ebay has quietly participated in the luxury fashion resale market for years, yet it isn’t the first name that comes to mind. More prominent in that space are The RealReal, Vestiarie Collective and Thredup to a lesser extent where luxury’s concerned.
Now Ebay wants a bigger piece of the secondhand luxury fashion market that reached $49 billion (€45 billion) globally in 2023 and is growing twice as fast as the primary personal luxury market, according to Bain.
Ebay is expanding its authenticity-guaranteed consignment service to fashion apparel from luxury handbags which started last year. As with handbags, it restricts the consignment listings to specific brands, such as Gucci, Balenciaga, Fendi, Dior, Burberry, Louis Vuitton, Prada and other respected names.
Luxury items for consignment are shipped to one of Ebay’s eight authentication centers for validation, photography, pricing and listing, rather than being listed by the seller and shipped directly from the seller to the buyer. That gives buyers confidence they are getting the real thing and sellers get a helping hand through the listing process.
Consignment sellers also earn larger commissions, ranging from 60% for items under $1,000 up to 80% for things over $5,000. For example, under the new consignment and authentication program, a quilted Chanel 19 flip bag exceeded the average sale price for a similar bag by more than 45% last year.
Ebay may be a late comer in the luxury fashion resale business – Vestiarie Collective and Thredup were founded in 2009 and The RealReal in 2011 – but it’s got size and scale on its side.
Dwarfing The Competition
Based on any measure, Ebay dwarfs the competition. The value of gross merchandise (GMV) sales it powered totaled $73.2 billion in 2023, generating $10.8 billion in revenues, including $5.1 billion in the U.S. Globally, it counts 132 million active buyers and approximately two billion listings across 190 markets.
It doesn’t report GMV or revenues on a product category basis, but it revealed that a majority of its GMV value in 2023 was derived in “motor parts & accessories, collectibles, fashion, electronics, and home & garden,” suggesting fashion is its third most active category.
And the company provided additional context in a statement saying, “Last year, 22 pre-loved shirts, six pairs of pre-loved jeans and eight pre-loved coats were sold every minute on eBay
EBAY
By comparison, The RealReal, with its exclusive focus on the luxury end of fashion, reported $1.7 billion in GMV and $549 million in revenues last year with just under one million active buyers and 3.6 million orders processed.
Thredup, which competes more broadly across the fashion resale business, generated less revenue – $322 million – but on about double The RealReal’s active buyers and orders – 1.8 million buyers and 6.9 million orders. It doesn’t report GMV. Vestiarie Collective is private.
Competitive Advantages
The luxury fashion resale market is a supply constrained business and Ebay’s international reach gives it a leg up in the global luxury market – 50% of its GMV is generated internationally. While The RealReal ships across the globe, it accepts consignments only from the U.S. Thredup limits its business to U.S. and Canada.
Late last year, Ebay opened its first global authentication center in Tokyo, giving its global customers access “to tap into a wealth of inventory from the world’s most exclusive brands with complete confidence,” CEO Jamie Iannone said in the earnings call.
It also has expanded the consignment and authentication guarantee program to fine jewelry, a high ticket category. Though the market for secondhand jewelry is much smaller than for luxury fashion, only about $861 million in 2023, it nearly tripled in size from 2019 and is projected to reach $1.3 billion by 2028, according to Statista. The Gemological Institute of America (GIA), the most trusted name in jewels, provides authentificant for Ebay jewelry.
And while The RealReal and Thredup are destination sites – customers have to be thinking about secondhand fashion before going there – Ebay is a place of serendipitous discovery for the millions of shoppers that browse the site daily.
“So, when you look at someone coming into a single focus category, they end up shopping across categories on the site, usually more than they buy in other categories from that one initial acquisition,” Iannone said. “So our ability to manage the CAC (customer acquisition cost) and the CLTV (customer lifetime value), is much different than others. And that’s just based on the scale of what we have.”
She added: “This is where eBay has a unique advantage. So first, the vast, vast majority of our traffic is organic. The second is our ability to monetize users that we acquire across multiple categories. It’s is a huge win for us.”
And she capped the promising opportunity in resale luxury remarking, “We’ve seen the fourth straight quarter now of growth in our luxury business.”
So Ebay may have been late to the luxury fashion resale party, but it is likely to party heartier and longer than anyone else.
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