Japanese MZ Generation Also Embraces 'Danggeun' Craze... "No Aversion to Secondhand Transactions"

"Even if consumption is high, you can resell as used"
Long-term negative impact on GDP growth

A secondhand trading boom similar to South Korea's 'Carrot Craze' has emerged in Japan, centered around the MZ generation (Millennials + Generation Z). However, concerns are rising that the MZ generation, which should be the main force of consumption, is actually tightening their wallets, potentially having a long-term negative impact on domestic demand.

Used goods store Gomehyo's Osaka Umeda branch. (Photo by Gomehyo)

On the 13th, Nihon Keizai Shimbun (Nikkei) reported that secondhand trading applications (apps) such as Mercari have become widely popular, sparking a secondhand trading craze mainly among the MZ generation.

They appear unhesitant to purchase everyday items like clothes and home appliances secondhand, rather than expensive products like used cars. According to a survey by secondhand goods distribution company Gomehyo, 51.3% of Generation Z respondents said they have "no aversion to buying secondhand goods," significantly higher than the average of 43.5% across all generations. However, the Bubble Generation (ages 52-57), who enjoyed an economic boom, showed a generational perception gap with only 33.8% saying they feel no burden in trading secondhand goods.

Responses were also high for considering resale when buying new items. In the same survey, 47.5% of Generation Z males said they "often buy items thinking about reselling them secondhand." A Gomehyo marketing representative added, "Generation Z comes to check secondhand prices before buying new products."

A secondhand trading app promoted by the Japanese payment application 'PayPay'. (Photo by PayPay)

In response, secondhand stores are revising their store opening strategies targeting people in their 20s and 30s. The main customers of the secondhand market have completely shifted from middle-aged women, such as housewives trying to save living expenses, to young people. In fact, Gomehyo continues to open stores in places where many young people gather. In November last year, they opened a new store on Spain Hill in Shibuya Ward, Tokyo, a shopping district frequented by people in their 20s and 30s. This location saw twice as many visitors in their 20s compared to other stores, resulting in visitor numbers doubling the expected count. Similarly, a secondhand sneaker specialty store in Yurakucho is also popular among people in their 20s and 30s.

Nikkei sees the ongoing high inflation in Japan as the background for this trend. With inflation rising faster than wages, young people without economic power have no choice but to tighten their wallets. Nikkei analyzed, "Against the backdrop of high inflation, young people refrain from shopping, while middle-aged and older generations support high-value consumption, which is the conventional wisdom in the secondhand goods industry."

Experts worry that the secondhand trading boom will have a negative impact on the economy in the long term because it does not contribute to gross domestic product (GDP) growth. In particular, the existing market order focused on new products is likely to be reorganized. Among the MZ generation, money earned from selling secondhand goods is circulating to support the purchase of new products. According to a survey by the secondhand trading app Mercari, 63% of Generation Z said they use secondhand trading apps "to sell secondhand goods to buy desired new products." Companies have already started to respond accordingly. Fashion distribution company Zozo has newly introduced a 'replacement discount' that displays the price when selling previously purchased items as secondhand on the new product purchase screen, allowing customers to buy new products with a discount equivalent to the secondhand price.

Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute, said, "The secondhand trading boom does not affect GDP growth at all, but it brings changes that cannot be captured by GDP, such as personal satisfaction and ripple effects."

Therefore, the Japanese secondhand trading market is expected to continue its growth trend for the time being. According to Recycle Tsushin, a specialized secondhand goods media outlet, Japan's secondhand goods market, which recorded 2.09 trillion yen (18.58 trillion KRW) in 2022, is projected to grow to 4 trillion yen (35.57 trillion KRW) by 2030.

This content was produced with the assistance of AI translation services.