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Ikea plans to expand its peer-to-peer marketplace for second-hand furniture across Europe following successful pilots in Madrid and Oslo, as the Swedish home furnishings retailer steps up competition with the likes of eBay and Depop.
Jesper Brodin, chief executive of Ingka, the main operator of Ikea stores, told the Financial Times the testing of the Ikea Preowned service had now been expanded to all of Spain and Norway and would run until August.
“It works — people like it,” he said. “We have decided to expand it from Madrid to Spain, and from Oslo to Norway. In a couple of years, we want to scale it up to all markets in Europe.”
Interest in the second-hand economy is booming, with specialist sites such as Vinted and Depop competing with some of the world’s biggest brands such as Shein, Zara, H&M and Lego to provide options for customers to buy and sell their used products.
But there is concern about the business model for second-hand retail, with few specialist sites able to turn a profit apart from Vinted, a Lithuanian start-up most recently valued at €5bn that is moving beyond used clothes into books, electronics and toys.
Ikea’s pilot in Madrid and Oslo led to about 200,000 customers visiting the Ikea Preowned website, and a “couple of thousand engaging”, according to Brodin.
Ikea provides sellers with measurements, photos, manuals, a recommended price and access to spare parts when they list some furniture, as well as an option to be paid in store vouchers worth 15 per cent more than the sale price.
Brodin conceded that the Preowned service was about something other than boosting its results at present, and said he was “positively surprised” by the high interest including the large numbers opting to take payment in Ikea vouchers.
While he “couldn’t say” what the service’s financial contribution was, he said “the customer engagement side is strong enough. Sometimes you have to go with the gut. This is a market and a movement in society, and if we would stay outside we couldn’t take part in it”.
Ikea has tried to take a leading role in sustainability, not just in its own operations but by pushing its customers to greener products, for example by taking early decisions to sell only more energy-efficient LED lightbulbs and offering cheap solar panels.
Brodin said that since 2016 the Ikea business had increased its revenues by 24 per cent while cutting its carbon emissions by 30 per cent.
He conceded there was “a bit of hype right now around second-hand” but insisted it was here to stay “because it’s smarter”. He added that Ikea still needed to define “what good looks like” both in terms of “business impact and for the climate”.
“We started working with this quite many years ago,” he said. “But it’s only with Preowned that we found the value to compete with eBay or Depop.”
Preowned is a peer-to-peer marketplace so Ikea is not involved in the shipping of goods or the actual transactions. But Brodin stressed: “The challenge is the scale. It’s the next-step challenge.”
