About 60 per cent of Finns have bought second-hand products during the past year. As recently as last year, Finnish consumers were the world’s most diligent buyers of second-hand products. This year, the British and Swiss have slightly overtaken the Finns, and the Americans and Indians have come close.
In a recent study, the Finnish Commerce Federation estimated the total market size of the so-called circular trade to be at about EUR 895 million, one fifth of which consists of traditional flea market sales, another fifth of the sales of stores and online stores, and about 60 per cent of C2C online sales between consumers through online platforms.
“The majority of circular trade is second-hand shopping, but the growing share is outlet or secondary sales of stores, where the products sold – for example, returned, slightly defective or unsold – could otherwise have to be disposed of,” says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation, clarifying the content of the circular trade.
Fashion has become the largest category in C2C e-commerce
C2C e-commerce has almost doubled since 2015, when the Finnish Commerce Federation investigated its size for the first time in a cooperation project with the University of Tampere*. At that time, the largest product group in C2C e-commerce was household technology.
Now, fashion has become the largest product group, growing by as much as 144 per cent in eight years. The growth of fashion has been fuelled by increased competition in the entire second-hand market.
“In addition to traditional platforms, such as tori.fi or eBay, which also trade fashion, there are new exclusively fashion-focused domestic and international platforms, as well as second-hand stores and online stores in C2C e-commerce,” says Kurjenoja about the development of the market.
Fashion-focused platforms, Norwegian tise.com and Swedish sellpy.fi, and the Finnish second-hand store relove.fi, have, in fact, increased the number of visits to their websites by three-digit percentages at the beginning of the year.
Saving money is the strongest motive for buying in a C2C online store
The main reason for C2C shopping is to save money, and more than 80 per cent of shoppers feel they have made low-cost, value-for-money purchases from other consumers. However, for sellers, earning money is not the leading driver of C2C e-commerce. Above all, they want to get rid of unnecessary stuff, and throwing things away doesn’t feel right.
“Yet, most of the salespeople felt that they had benefited financially. Thus, the economic benefit naturally supports the sales decision, rather than just donating or taking the goods for recycling. Future economic benefits may encourage purchasing sustainable products as new,” says Kurjenoja.
While both, buyers and sellers, perceive peer trading as positive, they also have concerns. More than half of both, buyers and sellers, are afraid of potential scams and even fraud. Buyers are also afraid that the products will not meet their expectations. Sellers, in turn, are concerned that potential buyers are not as desired.
“Concerns and fears about C2C e-commerce among consumers are, in fact, a great opportunity and advantage for commerce businesses in the second-hand market. Unlike peer trading, business’ operations are regulated by, for example, regulations related to consumer protection and payments,” Kurjenoja says.
Second-hand shoppers return clothing purchases more often than others
Although the desire to act responsibly is often a motive for second-hand shopping, it is not always visible in the purchasing behaviour of second-hand fashion customers.
“The second-hand fashion buyers’ way of buying clothes sometimes resembles the fast fashion customer journey,” says Kurjenoja summing up the study’s observations.
Second hand fashion buyers are more offer-seeking and spontaneous impulse buyers than others. Up to a fifth of them admit to frequently buying clothes – new or used – that they never even wear. They also return digital clothing purchases more frequently than others: while about a quarter of all digital shoppers of clothes return their online purchases, up to 36 per cent of second-hand shoppers return online clothing purchases.
Commerce businesses play a key role in accelerating the green transition
The new ecosystems and partnerships of commerce that are formed along with the circular economy create innovations, sustainable growth and a unique selection of services, but this does not happen by itself.
“RDI funding for commerce businesses would develop the circular economy and accelerate the green transition even further,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.
Understanding and guiding customers plays an important role in accelerating the green transition. Commerce businesses have the best information about consumers’ purchasing behaviour and the broadest contact surface with various operators in society.
“In practice, businesses in the commerce sector enable the green transition with their range of goods and services, as well as their ability to listen and help the customer,” says Kiviniemi.
Changing ways of trading and buying are topical academic research topics also internationally. The growth of consumer-to-consumer trade and the business opportunities it brings to businesses is an important topic for the development of domestic trade.
“It is very valuable that the Finnish Commerce Federation and the University of Tampere are able to jointly build research projects that will benefit both businesses and academic research and teaching,” says Mika Yrjölä, University Lecturer at the University of Tampere.
Attachment (Only in Finnish): Circular trade as a phenomenon and the circular trade market in Finland
Kiertokauppa ilmiönä ja kiertokaupan markkina Suomessa
For further information, please contact:
Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, email@example.com
Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, firstname.lastname@example.org
*The joint project of the Finnish Commerce Federation and the Tampere University’s customer-oriented marketing research group concerns C2C e-commerce. University Lecturer Mika Yrjölä and Chief Economist Jaana Kurjenoja designed a consumer survey that goes deeper into C2C e-commerce, the data collection of which was carried out by Kantar TNS in June 2023. The consumer survey sample consisted of 3,095 adults from mainland Finland.