Recommerce Reads - The Resale Revolution: key legal watch-outs for the rise of recommerce

United Kingdom

Pre-loved, circular, second-hand: however you describe it, the resale industry has experienced huge growth in recent years, with opportunities for businesses and consumers alike. Particular growth has been witnessed for the fashion industry, with the global second-hand fashion market expected to grow three times faster on average than the global apparel market overall, and sales forecast to reach $350bn by 2027 (ThredUp, Resale Report 2023). Reselling is, of course, not a new concept, but the proliferation of second-hand sales online has pushed it closer towards the mainstream.

At CMS, our lawyers in the recommerce group are not just legal experts on the resale sector but are also deeply embedded within it too. Spearheading this campaign is one of our associates, Jessica Wilkinson, who is a passionate consumer, advocate, and promoter of pre-loved fashion. On the consumer side, Jessica has witnessed friends and colleagues increasingly shopping “second-hand first” for apparel, jewellery, and homewares, and she has seen businesses capitalising on this growth.

Peer-to-peer platforms are central to the expansion of this sector, but mainstream retailers are getting involved too, integrating resale into their models, and facilitating consumer-to-consumer marketplaces on their websites. Luxury brands are also keen to embrace pre-loved sales. People of all generations are shopping second-hand, for different reasons. The increased cost of living is one driver, as is growing eco-consciousness among consumers. Outside of retail space, we are seeing operators building profile by sponsoring TV shows, partnering with influencers, and appearing in magazine edits.

There are also opportunities for service providers to this industry. For example, to integrate authentication services, enabling platforms to offer a trustworthy space for luxury goods, and provide payments, logistics, and other solutions to drive the recommerce sector forward.

The growth of this sector is exciting, but not without its legal complexities. In our upcoming series of “Recommerce Reads”, we will be exploring the key legal watch-outs for the rise of recommerce. Our experts will discuss topics from greenwashing to intellectual property and authentication, sponsorships and endorsements, tax, logistics, and deal deliberations for recommerce operators. Consumer protection is a particularly hot topic in the UK (and EU), and in our first article Second-hand doesn’t mean second best: consumer rights in pre-loved goods”, we discuss the regulatory challenges that consumer-facing recommerce businesses need to navigate. You can also visit our Recommerce webpage, where we will be publishing more in-depth material on these topics and more.

If you are an operator, or prospective entrant, in the recommerce sector and you would like to discuss this further, please do contact one of our specialists.