A rapidly growing appetite for luxury goods has made China the world’s biggest market in this niche area. The recent Bain Luxury Study predicts that China will account for half of all luxury sales by 2025. Derek Xue, vice general manager of Beijing Huaxia Komehyo commercial and trading company, said the trading volume of second-hand luxury goods in China is also rapidly increasing. 

“For us,” Xue said, “the size of the second-hand luxury goods market is just as big as that for new luxury goods.” 

Two years ago, when the Huaxia pawnshop started working with Japanese vintage retail giant Komehyo, they saw only a limited amount of high-end goods flowing into the second-hand market. Today, their jointly-owned shop in central Beijing is feeding the needs of a considerable number of people, thanks to the changing consumer attitudes from showing off to actually using pre-owned luxury goods.

Gao Xin, a typical millennial customer at the shop, believes that there's a market among the younger generation. 

“We like buying luxury accessories but don't really use them every day," she said. "We all want to trade in the old for new styles after a while. And it can also be a kind of investment and financing for some people.” 

But compared with the mature second-hand luxury markets of the United States and Japan, the manager admitted that they still have much to do in consumer education to encourage more in China to sell and buy used luxury goods of all varieties in the interests of sustainability.

Concerns over knock-offs is another challenge that the expanding Chinese second-hand luxury market needs to overcome. A small miscalculation means both the company and consumer will pay a heavy price. Only experienced examiners can tell whether a pre-owned item is authentic or not, how much it's been used and how much it's worth. With a gap in evaluation and legal protection, minimizing fraud will not be easy. 

Derek Xue said that the top priority and core competence of the business was the capacity to identify counterfeit goods and take great care of a used product.

Dealers have different advantages in pricing and after-sale services. The burgeoning industry has already attracted a wide variety of participants, ranging from individual boutiques to well-known online trading platforms. 

Facing the same obstacle in the infant industry, they are trying to find different ways out. While some businesses attempt to connect with flourishing overseas markets to bring in more high-quality products and successful experience to Chinese consumers, some have extended their footprints to second-tier cities. 

Advancement in social media technologies also gives the second-hand luxury business in China a digital boost in terms of sales channels and online authentication.