Market players move to formulate standard for luxury industry

With prices of luxury products rising and the popularity of livestreaming e-commerce blossoming in the country, secondhand luxury products are seeing strong growth in China.

China has emerged as a major market for new and secondhand luxury products with significant growth potential, but a sound industry standard has not been established yet.

To this end, a professional committee for luxury products was established last Friday to better meet market demand by the China Entry-Exit Inspection and Quarantine Association－a voluntary nonprofit nationwide social organization composed of market players related to the entry-exit inspection and quarantine sectors of the country.

The committee aims to formulate industry standards and institutionalized communication mechanisms. By gathering experts, appraisal agencies and retailers together, the committee hopes to unify appraisal standards and assess the range of valuation of certain products.

"The rise of livestreaming sessions on e-commerce platforms has enabled more consumers to know about the huge secondhand luxury market, and increasing demand has prompted the sector to jointly formulate industry standards," said Zhang Chen, director of the luxury products professional committee of CIQA.

"There is a growing demand for luxury goods appraisals from consumers and companies, while appraisal fees are falling. Industry players should reach a consensus to avoid vicious price competition and enlarge the talent pool to promote the appraisal ability of different agencies," Zhang said.

China has become the largest luxury consumption market globally. In 2021, sales of personal luxury products in China reached 471 billion yuan ($74 billion), up 36 percent year-on-year, a report by consultancy Bain& Co said.

Unlike some Western markets, young Chinese consumers have become the main demographic for luxury spending in China, and the trend has been prominent in the secondhand luxury market as well, said a report by market research firm iResearch.

"With continuous expansion of the middle-income group in China and the ongoing consumption upgrade trend, Chinese consumers have been paying more attention to brands and the quality of products. Still, there is no perfect industry standard, and counterfeit products have interfered with the operation and good development of the market," said Wang Xin, chairman of CIQA.

For secondhand luxury goods, its business scale accounts for 5 percent of the total luxury market in China, which is 20 percent to 30 percent lower than figures seen in some developed markets, according to a report by the University of International Business and Economics and Youshe Yipai, a platform for secondhand luxury deals.

Despite the fact that spending on luxury goods has grown rapidly in China compared with developed markets such as Europe, the United States and Japan, the nation has insufficient talent and experience in the luxury market.

"Secondhand luxury goods identification would be an important business with a remarkable room for future growth. The professional committee should do more industry analysis, provide guidance to the sector and strengthen the fostering of more talents," said Wang Qinhua, a former senior official with the Ministry of Commerce.

China Certification and Inspection Group, a major third-party luxury identification agency in the country, now provides identification and training services for enterprises and individuals. It identifies tens of thousands of luxury products annually, and those products include bags, jewelry and watches.

Meanwhile, Hongbulin, a secondhand luxury products trading platform in China, said it has received six rounds of funding from investors and the company has established a standardized process to value nonstandard goods.

Hongbulin said it has accumulatively identified more than 10 million pieces of luxury goods, and identified about 100,000 units of luxury goods monthly. With about 100 appraisers and technologies such as big data, the company has formed a standardized service system to give ratings of products while identifying logos, textures of materials, and hardware of luxury products.