New store is cheap and chic

By Shen Jingting (China Daily)
Updated: 2009-09-29 09:22

Foreign investor taps into local second-hand goods industry

The city's first foreign-owned consignment store has opened in Chaoyang district, offering luxury handbags and accessories at a fraction of the cost.

Rain-Wow Consignment Co opened near the Fourth Ring road on Sept 21, as is yet another indication of a developing second-hand goods industry in China.

The store offers high-end jewelry, watches, handbags and other luxury goods. Their prices are much less than you would pay at a department store, but don't expect to fork out less than about 10,000 yuan($1,463) per item.

Unlike pawn stores that pay money to sellers when they accept the goods, a consignment shop gives sellers money only when their goods are sold.

Joanna Lui, 39, from Hong Kong, and CEO of Beijing Rain-Wow Consignment Co, told METRO that the desire for luxury goods was still very strong, despite pressure from the global financial crisis.

"Customers do not mind whether these luxury goods are second-hand, as long as they are cheaper," she said.

With a joint capital investment of $20 million from Swiss Siberwalt Investment and Hong Kong Jarl's Group, Lui wants to set up 30 consignment shops in Beijing in half a year.

The second store is expected to open in downtown Wangfujing street on Oct 18.

In the Chaoyang store, the most expensive item is jade made in Myanmar and costing 45 million yuan ($6.5 million).

"For a consignment shop like us, we often charge 15 percent to 20 percent of the dealing price as commission," Lui said.

A 1.07 carat diamond which sells at 120,000 yuan in a department store, will be evaluated at about 3,500 yuan in a pawnshop, but can be sold at a price of 68,000 yuan in the consignment store, which makes companies like Rain-Wow attractive, she said.

"We only accept items from top-level brands, and with a price higher than 10,000 yuan," Lui said.

She said that customers had been responsive to the new store and that it was already making money.

"I would like to have a try of the new store, since I have so many brand bags in my wardrobe," said Lin Qiao, a college student at Beijing Normal University.

"I want to sell some of them and buy other newer fashion goods."

Figures from the China Resalegoods Trade Association indicate that unused second-hand goods valued at more than 5 trillion yuan are in circulation every year, and that figure is expected to grow 5 percent annually.