Secondhand clothing expected to hit $289 billion in 2025 with help from artificial intelligence
Secondhand clothing is no longer a passing trend — it has become one of the fastest-growing markets in the world. In 2025, global sales are expected to reach a staggering $289 billion (roughly £217 billion), a 12% jump from the previous year, and artificial intelligence is sitting right at the center of this transformation. 🚀
Sound like a lot? It does, but it makes total sense when you look at the numbers. In 2021, this market was worth $141 billion — less than half of what it is projected to generate now. And it doesn’t stop there: the sector is forecasted to reach $393 billion within the next five years, growing at an average rate of 9% per year, which is roughly double the pace of the traditional clothing market.
Platforms like ThredUp, Vinted, Depop, and Vestiaire Collective are driving this growth, while AI is starting to solve one of the industry’s biggest challenges: helping people find exactly what they are looking for within a massive catalog of pre-owned items. In this article, you will learn how this market got to where it is now, who is buying, who is actually profiting, and what technology has to do with all of it. 👇
How the secondhand clothing market got here
For years, buying secondhand clothes carried a social stigma. It was seen as something driven by financial necessity, not a conscious choice. But that picture changed quickly and profoundly over the past decade. What was once limited to neighborhood thrift stores and flea markets went global with the arrival of digital resale platforms, which completely transformed the dynamics of buying and selling pre-owned pieces. Suddenly, anyone could list a jacket they stopped wearing and sell it to someone on the other side of the world in a matter of days.
This shift was fueled by a combination of factors that reinforce each other. Environmental awareness grew among younger consumers, who began questioning the impact of fast fashion on the planet. At the same time, inflation and the rising cost of living across many parts of the world turned secondhand clothing into a financially smart alternative, not just a last resort. Buying used stopped being synonymous with sacrificing quality or style and started being seen as a way to find unique pieces with personality.
Data from ThredUp’s annual report, produced in partnership with market analysts at GlobalData, confirms this trajectory of accelerated growth. The secondhand clothing market doubled in size between 2021 and 2025, and projections for the next five years remain quite optimistic. Part of that optimism comes from the fact that consumer behavior among younger generations increasingly points toward reuse and circularity — something traditional fashion brands have started to notice as well.
Brands like Dr. Martens, Zara, and Mulberry have already started selling their own secondhand items or investing in repair and refurbishment programs for pre-owned pieces, riding the wave of demand for this type of consumption. It is a clear sign that resale has moved beyond niche territory and is now competing for meaningful slices of the overall fashion market.
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Resale now accounts for 10% of the global clothing market
One data point that really stands out in the report is that resale now represents one-tenth of all global clothing sales. That is pretty significant when you think about the size of the worldwide fashion market. James Reinhart, co-founder and CEO of ThredUp, was straightforward when commenting on the results.
Resale is not just growing — it is taking market share directly from traditional brands. In the United States, the secondhand market grew nearly four times faster than the clothing market as a whole in 2025, according to Reinhart.
Reinhart also noted that macroeconomic factors could accelerate this shift even further. Potential inflation driven by geopolitical conflicts, which raise energy and fuel costs for clothing manufacturers and retailers, could push more consumers toward secondhand options as a way to keep accessing the brands they want at more affordable prices.
Neil Saunders, managing director at GlobalData, added to this analysis by pointing out that people between 14 and 45 years old — that is, Gen Z and millennials — are expected to account for 70% of the market’s growth in the coming years. He emphasized that the product discovery infrastructure needs to evolve into the social feeds where these consumers spend their time. In other words, if you want to sell secondhand clothing to this audience, you need to be where they already are: on Instagram, TikTok, YouTube, and whatever other platform is commanding their attention.
The role of artificial intelligence in sales
If the growth of the secondhand clothing market would already be impressive on its own, the arrival of artificial intelligence in this ecosystem is pouring extra fuel on the fire. The main problem that always held back sales in this segment was product discovery. In a traditional store selling new clothes, catalogs are organized, descriptions are standardized, and filters work predictably. In the secondhand market, every piece is unique, descriptions vary wildly from seller to seller, and finding exactly what you want across millions of listings was, in practice, a frustrating task.
AI is changing that in very tangible ways. Visual search tools let users snap a photo of a piece they spotted on the street or on social media and find similar items available on secondhand platforms. Recommendation algorithms learn from each user’s browsing and purchasing behavior to suggest pieces with a high likelihood of conversion. Dynamic pricing systems analyze sales histories of similar items to help sellers set competitive prices without sacrificing margins. All of this reduces friction in the buying journey and, as a result, drives sales in a very direct way.
James Reinhart made an interesting comparison to illustrate the magnitude of this change. According to him, platforms like Netflix and Spotify spent 15 to 20 years building databases and algorithms to deliver personalized recommendations to their users. With generative AI and today’s large language models, that same type of personalization can be achieved almost instantly for resale platforms. That is a pretty big deal for a market dealing with massive and extremely varied inventories.
The technology is also reducing what Reinhart called friction points between seeing an item on social media and actually buying it. Imagine you see an influencer wearing a vintage bag on TikTok. With the right AI tools, the journey from that moment of discovery to completing the purchase on a secondhand platform can be shortened dramatically. That is the kind of seamless user experience that turns curiosity into a sale. 🤖
AI is also helping sellers
It is not just on the buyer’s side that artificial intelligence is making a difference. For sellers, the technology is streamlining the process of listing and cataloging pre-owned pieces, which has always been one of the biggest barriers to entry in this market. Platforms like Vestiaire Collective and Depop already use computer vision models to automate parts of this process, identifying brand, category, condition, and even fashion trends based on photos uploaded by sellers.
When AI helps standardize descriptions and correctly categorize products, the buying experience improves significantly, which translates into more trust and more completed transactions. Neil Saunders from GlobalData reinforced this point by stating that technology will be necessary to make the act of selling easier, ensuring there is enough inventory to meet growing demand.
Reinhart was even more emphatic when projecting the future of the sector. According to him, the next phase of this market will be defined by whoever can best unlock product supply and use AI to connect that inventory with the next generation of buyers.
Who is actually profiting from resale
If the market growth numbers are encouraging, the financial reality of resale platforms tells a slightly more complex story. ThredUp posted sales of $310.8 million last year, a 20% increase. Depop saw its sales jump 42%, reaching £101 million according to Companies House filings. Vinted grew 36%, hitting €813.4 million (roughly £710 million) in revenue in 2024.
However, turning revenue growth into profit remains a considerable challenge for most of these platforms. ThredUp reported a pre-tax loss of $20 million, and Depop accumulated a £42 million loss over their respective periods. Only Vinted managed to be profitable, recording a profit of €76.7 million in 2024. This mixed picture shows that while the market is growing fast, competition is fierce and operational costs — especially in logistics and technology — still weigh heavily on the bottom line.
Depop, notably, went through a significant ownership change recently, being sold by Etsy to eBay. This move is another sign that the resale market is entering a consolidation phase, where scale and operational efficiency are becoming decisive factors for long-term survival and success.
Major brands are getting in the game
One of the most interesting developments in recent years is major fashion brands entering the resale market themselves. Companies like Dr. Martens, Zara, and Mulberry have started selling secondhand items directly or investing in repair and refurbishment programs for pre-owned pieces. This is not altruism — it is a business strategy. By participating in the resale of their own products, these brands maintain control over the consumer experience, reinforce sustainability perceptions, and capture a slice of revenue that previously went entirely to third-party platforms.
Artificial intelligence enters the picture here as a tool for inventory management and demand forecasting, helping these companies understand which pieces have the most resale potential and how to price them fairly for consumers while keeping the business profitable. It is a practical application of AI that goes well beyond the hype and has a direct impact on the revenue of these operations.
What is next for this market
With the market heading toward nearly $400 billion in the coming years, bets for the future involve an even deeper integration between artificial intelligence and the secondhand shopping experience. The trend is for recommendation systems to become increasingly precise — almost like a digital personal stylist that knows your taste and your size. Virtual try-on technologies, which let you visualize how a piece would look on you without physically trying it on, are also expected to gain traction on the leading platforms in the sector.
Neil Saunders from GlobalData was clear in stating that the global secondhand market is entering a more competitive and structurally complex phase. That means the platforms that will stand out are those that can combine cutting-edge technology with a truly seamless user experience — for both buyers and sellers.
Another factor that could accelerate the sector’s growth is global inflationary pressure. With energy and fuel costs squeezing the fashion supply chain, prices for new clothing are likely to rise, which naturally pushes more consumers toward secondhand options. It is a self-reinforcing cycle that positions the resale market in a very favorable spot for the years ahead.
What becomes clear when looking at this landscape is that the growth of the secondhand clothing market is neither a bubble nor a passing fad. It is a structural shift in how people relate to fashion and consumption. And artificial intelligence is not just a supporting tool in this story — it is becoming a central piece in helping this market continue to scale efficiently, reliably, and accessibly for more and more people around the world. 🌍
