Second-hand selling platform Vinted launched in Ireland this week, with the company’s chief executive Thomas Plantenga expressing confidence in the company’s ability to become a leading player in the growing market.
Speaking to the at this year’s Web Summit in Lisbon, the CEO said they looked “very carefully” at Ireland, noting the online second-hand market was “very immature at this point”.
“You see it happening in shops and a bit on the ground, but we have a lot of confidence that we can grow the market. We see a lot of the same dynamics that we see in other countries where we were able to develop very quickly.”
The global second-hand clothing industry has surged in recent years and is set to more than double to more than €3bn by 2027. However, turning a profit is notably rare, with everyone from independent retailers to online reselling giants operating on razor-thin margins.
Vinted, however, has seen its gross merchandise value grow by more than 3.5 times in the last three years, making it fully profitable.
In 2023, the Lithuanian-based company posted €596m in revenue, up more than 60% compared to the previous year, with its net profit climbing to €17.8m, up from a net loss of more than €20m in 2022.
The turnaround in the company’s success has been largely attributed to its CEO, who was brought in as a consultant in 2016 to save the struggling Vinted before assuming the top job just 18 months later.
“I saw the company had a lot of problems in becoming a viable business, so I came up with a plan to make it grow,” Mr Plantenga told the .
“At the beginning, I just hoped my advice would help to fix it and that it could survive for a bit. But when it did survive and started growing, we started thinking, maybe it can be a bigger business. Then it started to accelerate.”
Among the changes the Dutch CEO made was a new business model which slashed the cost of selling on the platform, a reduction in headcounts, re-centring the business’ operations in Lithuania and investing heavily in TV, radio and online marketing, moves that have led the company to a valuation of €5bn just last month.
Vinted’s expansion into Ireland marks its 23rd global location, with most of Europe now already conquered by the growing second-hand platform. However, its success was not won without several challenges along the way.
“Sometimes we try a new market and it doesn’t work,” Mr Plantenga said. “We tried Canada a few years ago, it didn’t work, we pulled back but we will try again.
“In the UK, we tried six times after failing five, and then it went really well. So we’ll keep on trying and we’ll keep on failing as well.”
Looking at Ireland, Mr Plantenga says he is not worried about the market, which is now dominated online by rival Depop and largely-independent brick and mortars.
“The more people that use Vinted, the lower the average order value becomes and the faster people start selling.
“We are not focused on extorting the most out of every transaction — our strategy is to have the lowest possible fee in the market and thereby get the volume up so much that we make good business.”
Looking forward, Vinted is eyeing ambitious expansion plans and is currently building its own shipping and payment company to work in tandem with the second-hand selling platform.
“Five years from now, I expect the shipping brand to be one of the biggest in Europe and I expect Vinted Pay to be a successful fintech company, and I expect that to lead people to more easily trade second-hand.”