Will ThredUP ($TDUP) dominate the second hand distribution infrastructure for big retail brands?
Clothing companies are becoming aware of the shift in consumer demand in the clothing industry as consumers look for ethical and environmental ways to purchase their clothes. While the second hand market is expected to grow from $36B to $77B in the next five years, companies are already making moves to position themselves accordingly.
While all the companies in the space have focused on building a platform for consumers to buy and sell directly between them (Poshmarck, Depop, Mercari, etc….) ThredUP has focused on building an infrastructure with a set of distribution centers able to process millions of clothing pieces.
Just yesterday, Madewell clothing company signed a partnership with ThredUP after a pilot program that lasted for a year, creating a resale program called " Madewell Forever".
"Madewell Forever is powered by ThredUp’s Resale-as-a-Service technology and logistics platform, enabling circular fashion experiences for brands and retailers. Madewell is the first brand to utilize the service."
Other RaaS ThredUP partners are Wallmart, Gap, Rebook, Abercrombie & Fitch, etc…
The question is: If ThredUP is able to handle the distribution side from big retail companies in a market expected to double in 5 years to $77B (just in the US), what kind of premium should investors pay for it, considering the huge market opportunity while virtually being the only player in the space?
Furthermore, if ThredUP is successful in the US what’s stopping them from exporting their model to Europe?
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July 22, 2021 at 11:18AM