Canada’s second-hand economy worth $28 billion: report

Posted by: privatefinancetips in BLOG, Mortgage Loans Mar 27, 2016

Canada’s so-called “second-hand economy,” typified by sales of goods on consumer websites for example Kijiji and Craigslist, may be worth $28 billion, according to a new report.

“Canadians granted a second life to 24.9 million more products this year over this past year, for a total of just one.85 billion objects,” according to the annual Kijiji Second-Hand Economy Index published Tuesday.

The report, according to data from a web-based consumer panel, looked at the acquisitions, rentals and disposals of recent and used products which have had a number of owners.

It discovered that close to 70 percent of Canadians bought or sold second-hand goods within the last year, and said each Canadian spent typically $960 on used products and earned typically $883 with the sale of merchandise in 2015.

Clothing, shoes and accessories were the most popular product categories among consumers in the second-hand market, with 32.5 per cent of transactions involving those categories. Entertainment-related items for example books, DVDs and CDs came in second place at 18.5 per cent, followed by baby goods and accessories, at 9.9 per cent.

The report suggests the second-hand market gives a clear benefit to the Canadian economy, with about $19 billion from the roughly $28 billion in transactions representing economic activity that would not have otherwise occurred, as the remaining $9 billion represents economic activity that is shifted in the new to the used market.

About 90 per cent of the items that could have been purchased new are imported, the report says, so “the purchase of used goods in lieu of new goods represents an internet increase of nearly $8.1 billion in Canadian economic activity.”

The Kijiji report said 77 percent of the people who have fun playing the second-hand economy do so for the prospect of saving money, while 70 percent see it in an effort to get rid of household items they no more use.

The consumers surveyed said they believed the products they’re buying on classifieds websites are 48 per cent cheaper on average than they would be if purchased through another channel.

Canadians acquired 34 second-hand products during the last year, down from 35 last year. Of these, 17 were purchases and nine were donations. Canadians disposed of 43 products, up from 41 a year earlier. Of those, 27 were donated and 10 were resold.

Financial Post

hshaw@nationalpost.com

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