It’s been six weeks since Poshmark ($POSH) went public, earning the secondhand clothing marketplace a $7.4 billion valuation, and causing its share price to surge 140%, nearly breaking $100 on its first day on Nasdaq. The blockbuster IPO spotlighted Poshmark as one of the biggest beneficiaries of 2020’s “recommerce” retail revolution.
Last year, e-commerce sales soared 44% and secondhand sales captured 7% of the total apparel, footwear and accessories markets (a number set to double by 2024), while social commerce rose by 37.9%. In 2019, online consignment clothing sales grew 21 times faster than conventional apparel, and pandemic era retail trends only accelerated the market’s growth.
At this point, Poshmark, founded in 2011, is an old guard online thrift store. Thanks to its broad appeal and flexible business model, Poshmark has grown into a giant amidst the crowded landscape of online resale clothing marketplaces. With 70 million users spending 27 minutes a day on the site, Poshmark’s revenue grew by 28% in 2020, while the fashion industry at large dropped by over a third. Poshmark’s share price has stabilized around $60, but it’s quickly moving on to new markets. Last month, Poshmark debuted a petcare category and launched in Australia.
As competing companies launch and race to scale, who’s keeping up with Poshmark?
A race to the stock market
Two weeks after Poshmark’s IPO, its Massachusetts-based competitor ThredUp, which was most recently valued at $990 million in 2019, confidentially made its own public filing. Detroit-based sneaker marketplace StockX is preparing to IPO this year after hitting $2.8 billion in a new funding round, as is the luxury resale website Tradesy.
Two of the biggest players in the luxury online resale, London’s Farfetch and San Francisco-based TheRealReal have already gone public— FarFetch in 2018 at $6.2 billion and RealReal in 2019 at $1.7 billion. Of the marketplaces already on the market, Farfetch is currently trading the highest, at $65, compared to Poshmark’s $62 mark and the RealReal’s $28 price tag.
According to our data, Farfetch currently counts 79,600 Apple App Store ratings, a 74% increase from this time last year.
The reason Farfetch is out-pricing Poshmark’s post-IPO figure — and why its share price has surged 500% over the last 12 months — is a landmark deal with Chinese conglomerate Alibaba, the world’s largest e-commerce platform in the world, and Swiss luxury goods seller Richemont. For the fashion and e-commerce worlds, the deal cements Farfetch as the leading luxury marketplace. It includes $300 million investments from both Alibaba and Richemont as well as launch of Farfetch luxury shopping channels on Alibaba’s platforms. When the deal was announced in early November, Farfetch stock jumped 14%, and has been climbing ever since.
Fashion giants are investing in resale upstarts
Meanwhile, fashion giants have become very interested in resale upstarts. Earlier this week, fashion conglomerate Kering purchased a 5% stake in Paris-based consignment site Vestiaire Collective for $215 million, pushing their value to $1 billion. Kering is investing in re-sale across the board. Los Angeles-based sneaker marketplace GOAT secured a “strategic investment” from Kering’s parent company Groupe Artémis. Plus, two of Kering’s biggest house brands Alexander Wang and Gucci hosted partnerships with Vestiaire and The RealReal, respectively, last year. Last year, the RealReal scored $38.5 million in Series B funding from Neiman Marcus. (Notably, while Kering embeds itself in resale, LMVH has yet to make any serious investments or partnerships in the space.)
Money is flowing into resale marketplaces. Rebag, a designer handbag marketplace based in New York City, scored $15 million in a funding round in May, bringing its valuation up to $68 million. Levi’s entered a partnership with menswear marketplace Grailed to sell and promote their pre-worn jeans on the site. Lately, people have been asking if Lithuania-founded Vinted, which hit the $1 billion dollar mark after $141 million last year, is the new Depop.
B2B, C2C, or B2C?
There’s no question that online fashion marketplaces are thriving, but a few different business models are catching wind of the resale boom. Depop is the classic consumer to consumer (C2C) online marketplace. All users are created equal — the app has only one kind of profile that users can use to buy one day and sell the next. While small brands set up profiles that act as de facto shop fronts on sites like Depop, it’s generally used by people buying other people’s closet purges or DIY designs. Vinted, Grailed, The RealReal, Tradesy, ThredUp, and Poshmark all do most of their business as C2C marketplaces. They make money by taking a commission of of all peer-to-peer sales, anywhere from a 10-50% cut.
Among C2C markets, there’s a divide between “true” peer-to-peer companies, where buyers ship directly to sellers, and those holding inventory in warehouses. Poshmark is among the former and experts say this is one of its key advantages. While ThredUp, Rebag, and The RealReal process orders through distribution centers (the norm for luxury platforms that require brand authentication), Poshmark’s seller-to-buyer shipping means the company doesn't have to pay for rent or warehouse workers while still moving hundreds of millions of items. Tradesy and Grailed also use a “true” peer-to-peer model with no distribution centers.
C2C marketplaces have begun to move to a hybrid model that also facilitates business to business (B2B) sales. Poshmark has opened a portal where brands can sell wholesale orders to retailers that run “boutiques” on the platform. The RealReal and ThredUp have also started letting brands sell used inventory or discounted products, albeit with higher fees. B2B resale has become especially popular during the pandemic, as brands tried to move inventory with their stores closed. In mid-April, RealReal saw 10 times the number of brands applying to join its B2B program, compared to an average two-week period. StockX and GOAT also use a B2B-C2C model that allows individuals, retailers, and boutiques to list products (Adidas and Nike have even taken to launching new products directly on their marketplaces).
Meanwhile, Farfetch operates as a traditional luxury e-commerce platform, comparable to stalwarts like Net-a-Porter, which sells a curated array of third-party brands. However, Farfetch jumped into resale earlier this year with its “Second Life” program, likely an attempt to scoop some of the RealReal and Tradesy’s customers.
Sneakers steal the show
These companies are mainly competing among specific demographics, subcultures, and categories. Poshmark and ThredUp serve mainstream middle-market customers. 90% of Depop’s users are under 26, overlapping with GOAT and StockX’s hypebeast scene. Meanwhile, Farfetch, RealReal, Vestiaire Collective, and Tradesy market in high-end luxury goods.
Some niches are growing faster than others, specifically sneakers. With 672,000 ratings on the App Store, GOAT has nearly double and triple the ratings of its most popular competitors. Depop has 347,000 ratings, while Poshmark counts 244,000. However, StockX’s ratings count is growing the fastest of its competitors, up nearly 30% since September. Vestiaire Collective has seen the second fastest momentum, with reviews up 23%. GOAT and Depop’s growth rates follow at 22% and 20.5%.
GOAT and StockX are battling for dominance in the used sneaker market, which is predicted to hit $6 billion by 2025. But while GOAT sticks to sneakers and apparel, StockX’s revenue reached $400 million last year, given an edge by its expansion into electronics, comic books, and rare collectibles. The sneaker industry is so lucrative that Farfetch acquired Stadium Goods for $250 million back in 2018.
Shoe and accessory marketplaces are also in the lead when it comes to social media popularity. StockX, GOAT, and Rebag are all outpacing Farfetch, ThredUp, and Poshmark’s Facebook followings. StockX and GOAT’s Facebook audiences have grown by 86% and 51% since July, while Rebag’s likes have increased by 84%.
User growth matters
Online sneaker and accessory resale platforms have serious online momentum, but scale matters too. Online juggernauts like StockX and Rebag are still smaller than many of their resale competitors.
Poshmark counts the most users, while Vinted and Depop follow closest behind. But while Farfetch’s luxury marketplace naturally has a smaller audience, analysts predict its user base could hit 30 million within five years of its launch on Alibaba, which has 779 million customers.
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Company |
# of users |
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Poshmark |
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Vinted |
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Depop |
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The RealReal |
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StockX |
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GOAT |
|
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Vestiaire Collective |
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Tradesy |
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Farfetch |
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Grailed |
Based on latest available numbers; data unavailable for ThredUp.
Farfetch might have the deal of the decade with Alibaba, and StockX and Depop may have the fastest growing customer bases. But Poshmark could be on its way to becoming the next eBay as it adds category after category and seamlessly scales up.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
