Japan's Second-Hand Market Redefines Retail and Sustainability. | Kadence

The second-hand goods market in Japan has seen extraordinary growth over the past decade, more than doubling in value since 2010. This surge reflects a shift in consumer behaviour toward more sustainable and economic choices, driven by the rising popularity of second-hand goods platforms and a cultural focus on quality and reuse.

Our sister company, Cross Marketing Inc., recently conducted a study exploring the purchase behaviours, benefits, and concerns of Japanese consumers regarding second-hand goods. This research highlights key trends shaping the second-hand market and provides valuable insights for brands looking to tap into this growing sector.

Understanding Japan’s Second-Hand Ecosystem

The second-hand market in Japan has evolved into a dynamic and thriving sector driven by affordability, sustainability, and a cultural appreciation for quality. According to our latest study, books and manga are the top choices for second-hand purchases, with almost half of respondents identifying these as their top choices. Games, CDs, and DVDs follow closely at 38%, and cars, bikes, and bicycles at 27%. 

Japan’s focus on meticulous product preservation and high-quality standards plays a crucial role in the popularity of reused goods. Unlike in some Western markets, where thrift shopping often involves bargain hunting, Japanese consumers seek items that retain their original value, emphasising condition and authenticity.

Generational differences further highlight the diverse appeal of second-hand goods. Younger consumers in their 20s favour clothing and accessories, reflecting a growing trend toward sustainable fashion. Meanwhile, respondents in their 30s preferred entertainment products like games and DVDs, often driven by nostalgia or affordability. 

These preferences underline a broader cultural shift toward sustainable consumption, with second-hand shopping becoming a practical and socially conscious choice. As Japan’s second-hand market grows, brands have a unique opportunity to align with these values while addressing consumer concerns about product authenticity and condition. 

Comparing Japan’s Second-Hand Market to the US and UK

While Japan’s second-hand market is rooted in quality and sustainability, its Western counterparts offer a contrasting yet complementary picture, particularly in the US and UK. In the US, thrift shopping has long been associated with affordability and individuality, with platforms like Goodwill and Poshmark. Meanwhile, the UK has seen a rise in sustainability-focused resale platforms such as Depop and Vinted, driven by a younger audience concerned about environmental impact.

Key Differences in Consumer Behavior

• In Japan, second-hand goods are often valued for their pristine condition and longevity, reflecting a cultural emphasis on care and maintenance. By contrast, in the US, the “thrill of the hunt” for unique or vintage finds plays a larger role in consumer motivation.
• Western markets, particularly in the UK, see a stronger emphasis on sustainability as a driver for second-hand purchases, aligning with broader environmental movements.

Retail Strategies Across Markets

• In the US and UK, the second-hand ecosystem thrives on a mix of traditional thrift stores and digital marketplaces. The convenience of online platforms has expanded their reach significantly, mirroring Japan’s growing reliance on e-commerce for second-hand goods.
• Japanese brands can integrate Western best practices, such as authenticity certifications and user-friendly online interfaces, to address domestic consumer concerns about quality and transparency.

Lessons for Global Brands

Understanding cultural nuances is key for brands operating across these regions. Western markets offer insights into leveraging sustainability and community-driven marketing, while Japan provides lessons in quality assurance and brand trust. Together, these approaches highlight the global potential of the second-hand market, which continues to grow as consumers increasingly prioritize affordability and environmental impact.

Opportunities and Challenges for Brands in the Second-Hand Market

The second-hand market in Japan presents a unique opportunity for brands to tap into shifting consumer behaviours and the growing demand for sustainable solutions. However, with these opportunities come challenges that require strategic navigation.

Opportunities for Brands

1. Incorporating Resale Initiatives:
   Brands can embrace resale programs to strengthen their sustainability credentials. Companies like Patagonia and Uniqlo have successfully introduced programs for reselling used items, building trust and fostering customer loyalty.
2. Meeting Demand for Affordability and Quality:
   By offering second-hand options at competitive prices, brands can attract cost-conscious consumers while maintaining quality assurance, a key expectation in Japan.
3. Leveraging Digital Platforms:
   As e-commerce dominates second-hand transactions, brands can partner with online platforms or build resale marketplaces, offering enhanced transparency, authenticity guarantees, and user-friendly experiences.

Challenges for Brands

1. Addressing Consumer Concerns:
   Trust remains a significant hurdle, with concerns about product condition, authenticity, and hygiene topping the list. To alleviate these fears, brands must invest in clear product descriptions, certifications, and return policies.
2. Balancing Resale and New Product Sales:
   Expanding resale operations without cannibalising new product sales requires careful pricing strategies and consumer education about the benefits of new and used offerings.
3. Navigating Cultural Nuances:
   Focusing on pristine condition and authenticity in Japan is critical, whereas Western consumers may be more accepting of minor imperfections. Tailoring marketing strategies to these expectations is essential for success.

Case Study: Mercari – Transforming Japan’s Second-Hand Marketplace

Image Credit: Forward2Me

Background

Established in 2013, Mercari has rapidly become Japan’s leading community-powered marketplace. It enables individuals to buy and sell various items directly from their smartphones. The platform boasts over 23 million monthly active users (MAUs) in Japan.

Approach

Mercari’s success can be attributed to several strategic initiatives:

1. User-Friendly Platform
   Mercari’s intuitive interface simplifies buying and selling, making it accessible to a broad demographic. Users can list items by simply uploading photos and adding descriptions, while buyers can easily search and filter listings to find desired products.
2. Trust and Safety Measures
   Mercari has implemented an escrow-based payment system to foster trust among users. This system ensures funds are securely held until the buyer confirms receipt of the item in satisfactory condition. This approach minimises the risk of fraud and enhances user confidence in transactions.
3. Promotion of the Circular Economy
   Mercari’s mission emphasises creating value in a global marketplace where anyone can buy and sell, promoting the reuse of goods and contributing to environmental sustainability. Mercari supports the reduction of waste and efficiently uses resources.

Results

Mercari’s innovative approach has solidified its position as Japan’s largest C2C marketplace. The platform’s extensive user base and diverse listings have made it a go-to destination for consumers seeking common and unique items. Mercari’s efforts have also contributed to normalising second-hand shopping in Japan, aligning with global trends toward sustainable consumption.

Takeaway for Brands

Mercari’s model demonstrates the potential of combining user-centric design with robust safety features to build a thriving online marketplace. Brands looking to enter or expand within the second-hand market can draw valuable insights from Mercari’s strategies, particularly in fostering trust, promoting sustainability, and leveraging technology to enhance user experience.

Patagonia’s Worn Wear program is another example of how brands can integrate sustainability and second-hand initiatives into their core operations, enhancing their environmental impact and consumer loyalty.

Strategic Insights: Leveraging the Second-Hand Trend for Brand Success

As the second-hand market expands in Japan, brands have a significant opportunity to align with shifting consumer values while addressing key challenges. Below are actionable strategies for brands to capitalise on this growing trend.

1. Build Trust Through Transparency

Consumer trust is paramount in the second-hand ecosystem, especially in Japan, where authenticity and quality are critical. Brands can:

• Implement product certifications to verify authenticity.
• Provide detailed product descriptions and high-resolution images for online listings.
• Offer buyer protection programs, including inspection guarantees and hassle-free return policies.

2. Embrace Digital Innovation

E-commerce drives the second-hand revolution, and brands must prioritise digital platforms to stay competitive. Strategies include:

• Creating dedicated second-hand sections on official websites.
• Partnering with popular resale platforms like Mercari or Rakuma to reach existing audiences.
• Leveraging AI and data analytics to personalise recommendations and identify resale demand trends.

3. Integrate Sustainability Into Marketing

Highlighting the environmental benefits of second-hand shopping can resonate with eco-conscious consumers. Brands should:

• Promote circular economy initiatives, such as buy-back or trade-in programs.
• Use storytelling to emphasise the sustainability impact of choosing reused goods over new items.
• Collaborate with sustainability influencers to amplify their message.

4. Balance Resale with New Product Strategies

Second-hand sales should complement, not cannibalise, new product sales. Brands can achieve this by:

• Pricing second-hand goods strategically to differentiate them from new products.
• Using resale platforms to attract new customers who may transition to buying new items.
• Introducing exclusive collections or limited-edition items for resale to maintain product desirability.

5. Draw Inspiration from Global Markets

Western markets like the US and UK offer valuable lessons on branding and consumer engagement in the second-hand space:

• Adopt the community-driven marketing tactics popular on platforms like Depop.
• Explore partnerships with thrift-focused organisations to enhance brand visibility and credibility.

The Second-Hand Market as a Long-Term Strategy for Brands

The rise of Japan’s second-hand market signals more than just a shift in consumer preferences – it reflects a broader evolution in how value, sustainability, and quality are perceived. From books and clothing to cars and collectables, Japanese consumers are embracing reused goods for their affordability, unique appeal, and contribution to a circular economy.

This presents a compelling opportunity for brands to innovate and connect with consumers on deeper levels. Companies can build trust by addressing key concerns like product authenticity, quality, and transparency while carving a niche in this growing sector. Initiatives like resale platforms, trade-in programs, and partnerships with second-hand marketplaces are no longer optional – they are critical strategies for staying relevant.

The success of platforms like Mercari demonstrates the immense potential of this market, while global examples from Western markets show the scalability of second-hand strategies. As the reuse economy grows, brands that adapt quickly and strategically will thrive and lead toward a more sustainable and consumer-centric future.

The second-hand market is here to stay. For brands ready to align with this transformative trend, the time to act is now.

Contact us today for in-depth insights and strategic recommendations tailored to your brand’s needs. Let’s explore how your business can tap into Japan’s second-hand market and drive sustainable growth.