Unpacking Carousell’s next big move: recommerce

When Carousell raised another US$100 million and became a unicorn last month, co-founder and CEO Siu Rui Quek wrote in a Linkedin post that the startup would double down on its “recommerce efforts” to make “secondhand the first choice.”

He noted that the work was “truly less than 1% done.” Last week, Carousell announced it had snapped up Ox Street, a Singapore-based marketplace for buying and selling sneakers.

The deal, which saw the classifieds unicorn picking up Ox Street shares worth about US$2 million, makes sense for two reasons.

Like Carousell, Ox Street has been targeting young millennials and Gen Z consumers, who often splurge on rare sneakers to advertise their status.

Also, Carousell’s consumer-to-consumer (C2C) model means that it acts as an intermediary between buyers and sellers. Ox Street, which follows the sneaker resale model of major US players like StokeX and Goat Group authenticates and ships the sneakers to buyers, isn’t just a middleman. In some cases, Ox Street even holds inventory.

The sneaker resale startup might be the missing puzzle in Carousell’s push to go beyond online classifieds and more into recommerce.

But does Carousell have what it takes to lead the region’s secondhand goods movement?

Forget the flea markets

Recommerce, or reverse commerce, is booming across the globe. ThredUP, the US-based secondhand fashion marketplace that went public in March, now commands a market capitalization of more than US$2.2 billion. In its 2021 resale report, ThredUP estimates that the global resale economy in fashion would grow to US$77 billion by 2025.

To be fair, that figure trails far behind Amazon’s ecommerce sales alone. That said, it’s worth asking: Why is the resale trend gaining momentum?

The Covid-19 pandemic has made consumers more price-sensitive and environmentally conscious. The State of Fashion 2021 report notes that it has invigorated a “pre-existing critique of consumerism.”

In July, Etsy, the US marketplace that strives to become the “Amazon for artisans,” completed its US$1.63 billion acquisition of Depop, a Gen Z-focused fashion resale marketplace from the UK.

Are classifieds enough?

The power of sneakers

Can other ESG-business models take a slice?

Not for the faint of heart