Key Points

  • Old clothes sorting factories wholesale "mixed batches" of second-hand clothing at 600 to 3,000 yuan per ton. Livestreamers pick out the better-condition items, iron them, remove pilling, attach tags costing a few cents, and sell them as "one-of-a-kind sweaters" for 9.9 to 29.9 yuan each.
  • A second-hand sweater costing about 3 yuan to acquire still turns a profit after deducting 3 yuan for shipping and 1 yuan for the host's commission. Some livestream rooms run two sessions daily, each lasting 2 to 4 hours, selling at least 200 items per day with daily revenue reaching 10,000 yuan.
  • Yang Yinghong, Secretary-General of the Clothing Extension Working Committee of the China Second-Hand Goods Industry Association, stated that approximately 35% of collected clothing can be resold, with an economic value of about 15 to 18 billion yuan.

According to an investigative report by Red Star News, some livestream rooms on short-video platforms that advertise "factory overstock" and "clearance one-of-a-kind items" are actually selling second-hand clothing from old clothes recycling and sorting factories. These livestreams typically start in the afternoon or early morning, with online viewer counts ranging from dozens to a few hundred. A garment goes from being shown on camera to being claimed by a buyer in as little as 10 seconds.

The rules across these livestream rooms are highly similar: they label items as "one-of-a-kind," "9.9 yuan free shipping," and "minor flaws by default," while declaring "no returns or exchanges" and "order abandonment gets you blacklisted." Even if consumers want to return items, they often give up because the price is only 6.9 yuan to a dozen or so yuan while return shipping starts at 10 yuan. Buyers who successfully force a return may be blacklisted by the seller. Some buyers reported receiving clothing with odors, stains, rusted zippers, or even visible mending. Others opened packages to find cockroaches.

The supply chain begins at the recycling end. Xiao Wang (pseudonym), a former employee at a "one-of-a-kind" livestream room, said she only discovered the clothing had wear, pilling, and smells of laundry detergent, perfume, or bleach when she was attaching tags to items about to be listed. A colleague told her the clothes came from a sorting factory in Huizhou, Guangdong, that does old clothes recycling. Qin (pseudonym), a practitioner in southwestern China, explained that the old clothes recycling and resale industry chain first emerged in Guangzhou, and during the pandemic the "collection-sorting-livestreaming" chain developed rapidly in many regions. Door-to-door collectors initially bought clothes by weight at 0.3 to 0.8 yuan per jin (500g), then bundled and sold them to sorting factories at several hundred yuan per ton. Later, discovering that direct sales were more profitable, they began sorting themselves and pricing items at a dozen to several dozen yuan based on condition, season, and style before selling to livestream merchants. Some well-positioned merchants even specifically collect from upscale residential compounds because "a lot of branded goods get thrown out."

Wholesale pricing is more systematic. On platforms like Alibaba and Douyin, factories in Guangdong, Zhejiang, and Henan openly solicit customers for one-of-a-kind livestream supply: goods at 600 yuan per ton work out to less than one yuan per item; the 3,000 yuan per ton tier is higher quality; and some items like windbreakers and fleece jackets are priced at 20 yuan per piece. A factory salesperson admitted the goods are "a mix of second-hand, new, and overstock items." A Guangzhou sorting factory that does both export and domestic business said they only accept orders of "dozens of tons" and do not take clothing in too poor condition because "disinfection costs would be too high."

The profit margin drives these livestream rooms. Qin said a second-hand wool coat purchased for 30 yuan can sell for 300 yuan in a livestream. A friend of hers who sources from recycling stations showed daily revenue of 10,000 yuan on the Douyin livestream backend. Xiao Wang calculated differently: a sweater costs 3 yuan, shipping 3 yuan, host commission 1 yuan, and after deducting other costs, selling at 19.9 or 29.9 yuan still yields profit, and even the 9.9 yuan "promotional price" does not lose money. Her livestream room ran two sessions daily, selling at least 200 items per day. She also mentioned that when stains were found after orders were placed, colleagues typically just had them treated with laundry detergent, fabric spray, or rinsed with water and air-dried before shipping, with no disinfection step. When she saw severely damaged clothing, she would privately call customers to advise returns, and ultimately resigned because she "couldn't get past her conscience."

Passing off second-hand clothing as "one-of-a-kind" also involves compliance issues. According to industry insiders, qualified surplus goods remaining after a factory completes an order are called "original stock" or "overstock"; items made with remaining fabric combined with other materials are called "follow-up production"; and items accumulated due to poor sales or seasonal changes are called "inventory." These typically come in quantities of more than one piece. Second-hand recycled clothing, however, is mostly single pieces with signs of wear. China currently lists old clothing and other waste textile materials and products in its catalog of solid waste prohibited from import. Old clothing must be declared to health quarantine authorities and undergo quarantine before export, and many African countries require test reports and VOC certification for customs clearance.

Yang Yinghong, Secretary-General of the Clothing Extension Working Committee of the China Second-Hand Goods Industry Association, said the association has noticed the complex situation of second-hand clothing recycling and resale, and attributes the industry's "chaotic practices and vicious competition" to numerous problems in the circulation chain: difficulty tracing second-hand clothing origins, lack of transparency in processing, difficulty assigning after-sales responsibility, and regulators lacking a basis for oversight. The "Technical Specification for the Circulation of Second-Hand Textile and Apparel" published by the China Second-Hand Goods Industry Association in 2021 sets requirements for sorting, quality and hygiene, labeling and tagging, and sales, but the document's full text has not been made public, and as a group standard it has no mandatory binding force on market participants.

Yang also mentioned policy-level goals: according to the "Implementation Opinions on Accelerating the Recycling of Waste Textiles" issued by the National Development and Reform Commission and the Ministry of Commerce, by 2025 a preliminary waste textile recycling system should be established, with a recycling rate of 25% and regenerated fiber output of 2 million tons; by 2030 the recycling rate should reach 30%, regenerated fiber output should reach 3 million tons, and a relatively complete recycling system should be built. Fu Jian, director of Henan Zejin Law Firm, said that if second-hand clothing is sold to consumers as one-of-a-kind items, it may constitute fraud, and consumers can claim compensation. Interviewed experts suggest regulating the industry through industry self-discipline and standard-setting, improved regulatory mechanisms, and consumer awareness guidance.

For the old clothes recycling and second-hand clothing industry, this investigation reveals a gray channel that uses the guise of "overstock one-of-a-kind items" to move recycled old clothing: at one end it suppresses the pricing system at the recycling stage, and at the other end it rapidly converts sales in livestream rooms through the scarcity of "only one piece" and low prices, objectively squeezing out the traffic space of legitimate overstock sellers. In Qin's words, "people who honestly and properly sell overstock can't compete with these second-hand sellers." At a stage where standards and regulation still need to catch up, whether source grading, hygiene processing, and sales labeling can be made transparent will determine whether these recycled clothes flow to compliant domestic resale or export channels, or remain in the rhetorical gaps of livestream rooms.

Source: "One-of-a-Kind" Livestream Gray Industry Investigation: Overstock or Second-Hand Clothing, Can Be Wholesaled at 600 Yuan per Ton_Paper Quality Watch_Paper News · Originally published on 2024-02-20