Could Trading be One of the Business Models of the Future?  

By Diana Verde Nieto 

The rise of viral trends on platforms like TikTok has completely transformed the industry, particularly in sectors such as fast fashion, fast jewellery, and fast beauty. These industries rely on quick production to capture the attention of the younger generation. Shein, for example, is known for its ability to bring designs from concept to production within days. It is projected that their sales will reach nearly $60 billion by 2025, highlighting the immense power of this social media-driven market (FT, Feb 2024). 

The appeal of the fast-paced world is undeniable. It has managed to mesmerise people with the notion that more and cheaper items are somehow cool. The trendy and affordable clothing, jewellery, and beauty products offered by these companies, along with frequent new arrivals, easy returns, and free shipping options, create a sense of novelty and excitement. In turn, this gives people a rush of dopamine that is hard to resist. When combined with effective social media marketing strategies, it becomes clear that this approach does not encourage mindful consumption or prioritise quality over quantity. 

Concerns about ethical and environmental practices in the “fast industry” have been raised before. The sustainability of their business model is being called into question due to these concerns. 

During a recent sustainability roundtable discussion, I couldn’t help but express my frustration and inquire about the sustainability of this fast-paced business model. I even wondered if government intervention might be necessary. The growing addiction to this type of consumption and our inability to break free from it are major concerns – especially considering that Gen Z and Zillenials are often regarded as the most mindful and environmentally conscious demographics.  

I’m coming to realise that this may be true when it comes to food choices or certain lifestyle decisions but not necessarily when it comes to fast fashion. On platforms like TikTok and some fast fashion websites, the constant stream of new arrivals coupled with a sense of scarcity can create a compulsive desire to buy out of FOMO (fear of missing out). These platforms exploit certain psychological tendencies in young consumers, and older ones too. Additionally, the easy accessibility of online shopping and frequent discounts lead to impulsive purchases that exceed both needs and budgets. 

As the negative consequences of the “buy, use, discard” cycle become increasingly apparent, is it time for businesses to explore alternative models that optimise for planetary boundaries not just the bottom line?   

There are reasons to be hopeful. Retailers like Bijenkorf and Selfridges are leading the way by setting ambitious targets for circular transactions. By 2030, they aim for 30% of all purchases to involve recycling, renting, resale, refilling, or repair. This means that in just six years, one out of every three items bought will fall into these categories. While this may seem like a daunting task, it is not impossible. 

In fact, the market for second-hand apparel is thriving. According to Statista (Statista, Nov. 2023), the global Second Hand Apparel market was valued at USD 33002.0 million in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 15.41% until 2028 when it is expected to reach USD 77981.3 million. This data proves that there is a significant demand for sustainable fashion options. 

This is where trading comes into play. Trading is the oldest form of commerce, and in a time when many people have an excess of “stuff” but limited budgets, this may be the perfect opportunity to revisit this new-old business model.  

Imagine a world where individuals can easily exchange pre-owned items – from clothes and books to electronics and collectibles – instead of constantly buying new ones. 

You don’t need to work very hard to imagine it. In the USA, trading is emerging as a scalable and viable solution to address the issue of overconsumption. People are starting to gravitate towards brands that offer better quality products that can be traded in the future. The new EU legislation on producer responsibility mandates that products should be repairable, which inherently means they need to be of better quality. 

Companies like Sibs App are at the forefront of this shift towards trading. Often referred to as the TikTok of trading, Sibs App provides a platform for individuals to trade their items and give them a second life. The app not only facilitates trading but also promotes a much-needed change in mindset by encouraging users to view their possessions as valuable resources. 

While platforms like Depop, Vinterior, Facebook Marketplace, and Nextdoor are successful destinations for buying pre-loved items, they do not focus as much on trading. 

As businesses and consumers embrace trading, it has the potential to become the business model of the future. This shift would enable companies to achieve their circular economy goals while breaking free from the cycle of fast fashion, fast beauty, and fast jewellery. Ultimately, trading promotes a more responsible and mindful way of living – one that allows for an unlimited wardrobe without the negative environmental impact of constant production. 

So while challenges persist and economic uncertainties loom large in the fashion industry, there are signs of economic prosperity ahead – but this will require new thinking and a shift in mindset towards resourcefulness and longevity.  

About the Author

Diana Verde Nieto, is an entrepreneur, author and prominent business leader. Diana has a remarkable track record of over 20 years of experience in guiding companies towards sustainable economic growth and innovation. She established one of the world’s pioneering sustainability communication consultancies in 2002, which she exited in 2010. In 2011, she co-founded Positive Luxury and spearheaded the enterprise until 2022, continuing to sit on the board. Diana serves as an advisor Sustainnovate, The British Beauty Council, La Praire and The United Nations Department of Economic and Social Affair. Diana has recently released a book- Reimagining Luxury: How to Build a Sustainable Future for Your Brand.