Rethinking business models for a thriving fashion industry
Circular business models for fashion, which are designed to make revenue without making new...
“We want to be able to work within a fashion ecosystem, rather than as competitors, where there is strength, synergy and unity throughout the industry.”
Sigita Žvirblytė, Head of Sustainability
Vinted is a peer-to-peer marketplace and community for second-hand fashion. It was launched in 2008 by two Lithuanian entrepreneurs, Milda Mitkuté and Justas Janauskas, to enable Milda to get rid of some clothes before moving house. They created a website to sell and swap items, enabling people to monetise their wardrobes. Vinted now operates in 15 markets across Europe and North America and was valued at EUR 3.5bn upon a Series F funding round of EUR 250 million, in 2021. In 2020, Vinted merged with Dutch second-hand clothing platform United Wardrobe to strengthen its position as the largest online C2C platform dedicated to second-hand fashion in Europe, with 45 million members globally. While Vinted caters to anyone over 18, women aged 18-45 are the biggest segment today.
Vinted is an app-based platform that uses a peer-to-peer model in which sellers upload their own photos and descriptions of items and ship directly to buyers. This increases the number of owners per item by allowing people to sell and swap items they no longer wear, extending their lifetime. Vinted caters for the resale of all items, from high street fashion to vintage to high end, across womenswear, menswear, kids and home. By charging fees to buyers instead of sellers, users can list items at lower price points and still make money, which facilitates the resale of items that could otherwise become waste. The ease of listing items makes reselling clothes a popular choice for users to recapture value from their clothes and the large number of users, in turn, creates a wide assortment of items on the app.
Vinted has created an ecosystem where users are empowered to unlock value from their clothes by getting money back for items which instead would have been thrown away. Shifting users' mindsets means they are more likely to take better care of their items as they hope to get a higher resale value in the future.
Customers can access different styles at affordable prices while having the ‘newness factor’ in a more guilt-free way by purchasing second hand items.
Vinted prioritises member trust by mitigating potential issues like fraud . Members are encouraged to engage with each other and become part of the Vinted community through forums and direct messages.
Vinted can have wider social benefits as the product value stays with the users in the communities in which products are being traded, helping to normalise second hand fashion. Social responsibility and environmental awareness are ingrained in its core values, which is reflected throughout its operations. The biggest positive impact the company has is through the circularity of its business, as extending the life of clothing by an extra nine months of active use would reduce carbon, waste and water footprints by around 20-30% each and cut resource costs by 20%.
Listing a product for sale is free on Vinted; members upload photos, add a description of the item and list their price. It is possible to order individual items or bundles from a single seller. Sellers can choose to apply bundle discounts to encourage sales or simply offer combined packaging. They get to keep 100% of the price of the item they sell.
Buyers search the app, like, save and purchase items.
Before buying, members are encouraged to message each other for extra information on an item, for example measurements, fit, or recommendations about how the items fit and can be styled.
Items are shipped directly between users, and the buyer covers the cost. Vinted works closely with shipping companies to get the best prices.
Once an item is received, users confirm that they are happy with the order and leave feedback. The payment is then transferred to the sellers’ Vinted balance and can be withdrawn or held on the app for future purchases.
For each transaction made on Vinted, the company charges a fee called Buyer Protection (5% of the price of the item + EUR 0.70), part of which enables safe payment between two members, avoiding the need for personal information and bank details to be exchanged between them.
As part of this system, Vinted holds the buyers’ money with an external payment provider. The buyer then has two days from when the item arrives to confirm if everything is okay with their purchase or to suspend it if an issue occurs. This is so the company can provide support via its dedicated community support team if needed, before the money is transferred to the seller. Vinted can issue a refund if the item received is substantially not as described in the seller’s listing or if it gets lost/damaged during shipping.
Vinted has successfully created a platform which empowers users within a diverse, expressive community. The platform’s widespread success can be attributed to its simplicity, which effectively engages users by delivering a convenient and personalised experience, allowing them to meet their needs through second hand clothes and incentivising them to both buy and sell through the platform. Vinted’s latest category, ‘home’ (home products, such as plates, books, and utensils), further showcases the relevance of the resale market.
Vinted’s mission is to make second-hand the first choice worldwide by establishing a sustainable circular model and taking it global. The company focuses on improving the user experience by making search, discovery and purchase as easy as possible.
Initially, Vinted operated with a different cost structure, but by shifting away from seller fees was able to create strong growth in the customer base. Vinted demonstrated resilience through the pandemic as people looked for alternative sources of income and ways to recapture the value of their clothes. The peer-to-peer structure makes it easy to scale and Vinted has been able to learn from its European expansion to understand the needs of its customers and stakeholders even further.
Looking to the future, Vinted's focus is on its mission to “make second-hand first choice worldwide”, supporting a sustainable shift in consumption and purchasing decisions.
Published 23 November 2021
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