Here's why the UAE's pre-owned market is booming

Rising digital adoption and a greater focus on the environment are driving the market

Pre-owned McLaren cars at the Al Habtoor Motors workshop in Dubai Industrial City. Automobiles are the most popular second-hand items in the UAE, findings by RedSeer Consultancy show. Pawan Singh / The NationalShow less

The market for pre-owned items is growing in the UAE, with a quarter of consumers having bought or rented such goods in the past six months, a study found.

Interest in goods that are pre-owned – also known as second-hand or pre-loved – is accelerating thanks to growing digital adoption, an increasing focus on the environment and the chance to snap up significant discounts, consultancy RedSeer said in its findings.

Vehicles emerged as the most popular segment in the pre-owned market, followed by electronics, homes and fashion – which includes jewellery and designer items.

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"An active pre-owned industry can be a critical driver for the circular economy as it increases the life of products. Consumers are also becoming more conscious of their environmental footprint and seek newer alternatives in their daily life," the report said.

The growth of the pre-owned market is aligned with the UAE's sustainability initiatives. Last October, the Dubai Supreme Council of Energy launched the Circular Economy Committee to focus on reducing the extraction of natural resources, minimising waste and regenerating natural systems.

In January, Abu Dhabi also announced that it may ban single-use plastic bags by the end of the year, while Dubai said early this month that it will introduce a charge of Dh0.25 for all single-use plastic bags from July 1 before they are banned in two years.

Shopping for a second-hand item reduces its carbon footprint by up to 86 per cent, said Amanda Rushforth, board director at Dubai-based marine conservation non-profit Azraq.

"A circular economy is one of the key ways in which we will be able to stem 21 billion tonnes of clothing from being burned or discarded in landfills every year," she told The National.

In the global second-hand market, the apparel segment rose 4.8 per cent to hit $32 billion in 2021, and is projected to grow at a compound annual rate of 11.2 per cent until 2031, a recent report from Future Market Insights said.

Pre-loved luxury goods grew 18 per cent to $37.3bn in 2021 from $31.6bn in 2020, according to Statista. In February last year, North Ladder, a UAE-based platform selling pre-owned luxury goods, raised $5 million in a series A round to scale up its business and fuel its expansion across the Middle East.

The used-car market – popular in the UAE – is projected to reach $403bn globally by 2026 from $250bn in 2020, Mordor Intelligence said.

Amazon, the world's largest online marketplace, has also recognised the trend and sells "like-new refurbished products" through its Amazon Renewed section. In May last year, it launched the Amazon Warehouse online shopping platform in the UAE, which offers pre-owned and open-box products at discounted prices.

An active pre-owned industry can be a critical driver for the circular economy as it increases the life of products. Consumers are also becoming more conscious of their environmental footprint and seek newer alternatives in their daily life

RedSeer

Online platforms remain the most popular source for pre-owned items, with 85 per cent of consumers preferring to shop in these channels as they specialise in used luxury fashion items such as handbags and watches, RedSeer said.

While 70 per cent of consumers prefer social commerce, a rapidly-growing retail model which includes platforms such as Facebook, Instagram and TikTok, 61 per cent opt to buy pre-owned products at physical outlets such as garage sales, night markets and pop-up stores.

However, consumers across the board continue to show a preference for buying as opposed to renting pre-owned items, the report said.

"Buying is seen as a better value-added option, especially for the home and electronics sectors, where the estimated duration of use can be higher," it added.