On November 14, 2023, the Qingdao Urban Management Bureau announced the removal of 58 old clothing recycling bins across the city that were unusable and had long been unattended. Behind this number lies the decade-long rise and fall of the local old clothing recycling industry: the city once had more than 4,000 old clothing recycling bins, and is now undergoing a shift from the traditional bin model to a mix of store-based recycling, smart recycling bins, and door-to-door collection. Industry insiders reveal that Qingdao generates about 10,000 tons of waste textiles each year, of which about 7,000 tons are old clothes. About 30% (2,100 tons) can be exported. Winter clothing is mainly sold to Southeast Asia, while summer clothing goes to Africa. Export profits almost single-handedly sustain the entire industry.

Key Points

  • On November 14, 2023, the Qingdao Urban Management Bureau announced the removal of 58 old clothing recycling bins. The city's recycling bins once peaked at more than 4,000 units, and the traditional bin model is clearly shrinking.
  • Qingdao generates about 10,000 tons of waste textiles and about 7,000 tons of old clothes each year, of which about 30% (2,100 tons) is exported. Winter clothing goes to Southeast Asia and summer clothing to Africa. Export profits account for almost all of the industry's profits.
  • A sorting enterprise in Chengyang sorts about 15 tons per day, breaking items into more than 70 subcategories. The export quotation is about 5,000 yuan per ton, resold through companies in Ningbo or Guangzhou, with African distributors paying 7,000 to 8,000 yuan per ton.

From Recycling Bins to Stores and Smart Cabinets, the Front-End Model Is Changing

On Luokou Road in Qingdao, an old clothing recycling store opened in October this year is regarded as the city's first specialty store. Residents who bring old clothes to the store receive 1.2 yuan per kilogram, while door-to-door collection by staff pays 0.6 yuan per kilogram. Store operator Wang Long says the store collects about 700 kilograms per day, or 20 tons per month on average, with 95% brought in by residents themselves. He had previously sold off his company's more than 400 traditional recycling bins, plans to open branch stores next year, and has already been in contact with more than 10 potential franchisees. He recalls that in the early days of free collection, gross margins could reach 50%, but after switching to paid collection, they are about 30%.

Smart recycling bins have become a new front-end entry point. Aihuishou Aifenlei entered Qingdao in 2021 and now covers 1,870 devices across 29 subdistricts in Jimo, Chengyang, Licang, Shibei, and Shinan, with an expected 2,000 devices by the end of the year. All recyclables are priced at 0.8 yuan per kilogram, withdrawals are possible once the balance reaches 10 yuan, and daily collection volume is 130 to 160 tons, of which about 40 tons are old clothing. A smart bin on Jinmen Road Subdistrict in Shinan District collects about 60 kilograms per day on average, while nearby traditional recycling bins are rarely used.

Door-to-door collection and online mini-programs are also diverting volumes. Wang Long's staff use action cameras to record the entire door-to-door collection process. One resident in Shibei District sold 30.4 kilograms of old clothes that day for 18.2 yuan, after previously selling about 400 kilograms in two transactions. For online orders, Alipay hosts about 30 old clothing recycling mini-programs. One of the top-ranked ones quotes 0.2 yuan per kilogram, with a minimum of 3 items, and pickup by couriers from JD.com, SF Express, and Deppon. However, industry insiders report low usage and little enthusiasm from couriers, and Shandong still lacks a relatively mature local online recycling enterprise.

The Midstream Sorting Chain: 15 Tons Processed Daily, High Dependence on Exports

The old clothes from the front end ultimately converge at sorting plants. Zhu Youheng, head of a sorting enterprise in Chengyang, says the company has two sorting lines, one for winter clothing and one for summer clothing. Currently, the winter clothing line is mainly in operation, sorting about 15 tons per day, of which 3 tons come from Qingdao locally and the rest from across the country. A truck brought 9 tons of old clothes from Laoshan District. Six sorting workers first classify them into tops, pants, down jackets, summer clothing, and outerwear, then further refine them by material and style, such as jeans, nylon pants, and straight-leg pants, and grade them into A and B goods by condition, totaling more than 70 subcategories. Qualified clothing is compressed and baled at about 100 kilograms per bale, with shipments basically once a month at about 22 tons each. Items that do not meet standards go to downstream factories to be made into cotton yarn, non-woven fabric, greenhouse insulation quilts, roadbed cloth, fillers, soundproof cotton, and more.

Exports are the most profitable link in the chain. Wang Long says sorting enterprises sell old clothes to export companies in Ningbo or Guangzhou at about 5,000 yuan per ton. The export companies mark them up and resell to Africa, where local distributors pay 7,000 to 8,000 yuan per ton. Because Chinese clothing is brightly colored, it is relatively popular in Africa. Starting in October 2022, he spent three months investigating Africa, entering from Kenya's Port of Mombasa to Nairobi. His partner's stall covers about 8,000 square meters. Because Chinese nationals cannot engage in retail locally, the stall only wholesales to local distributors, who buy by the ton and sell by the piece.

Industry Winter: Supply and Demand Both Fall, Export Volume May Be Halved

Interviewed industry players generally report a decline in export volume this year. Zhang Dengyou, head of Qingdao Haishun Environmental Protection Technology Co., Ltd., says that compared with the relatively good situation in 2017, the company's old clothing export volume may fall by about half this year. Qu Ruijing, an expert with the China Industrial Energy Conservation and Cleaner Production Association, analyzes that multiple factors have combined over the past three years to sharply reduce old clothing exports, while the total volume of domestic waste textiles is also declining: previously about 26 million tons per year, with old clothes accounting for more than 20% at the highest, now the total is no more than 20 million tons.

Several paths for domestic waste textile regeneration are also blocked. Qu Ruijing says the physical method has been affected by shrinking capacity in aircraft manufacturing and construction, reducing demand for soundproof cotton and machine wiping cloth, and the production process involves dust and static electricity, with strict regulation, leading to a decline in mechanical processing volume. Chemical reduction projects cannot be implemented. The energy utilization method has lost its market because coal prices have fallen and co-incineration must bear environmental protection costs. Front-end recycling also faces problems such as insufficient guidance funds for garbage classification and difficulty in finding locations for recycling bins. He describes the relationship between the recycling system and the utilization system as interlocking: if the utilization system is not sound, the recycling system will collapse.

In 2022, the National Development and Reform Commission and other departments jointly issued the Implementation Opinions on Accelerating the Recycling of Waste Textiles, proposing that by 2025 a preliminary waste textile recycling system be established, with a recycling rate of 25% and regenerated fiber output of 2 million tons. Qu Ruijing believes that the construction of the relevant standards system is currently at a standstill and needs to be repositioned from the top-level design, following the tiered principles of recycling, comprehensive utilization, and energy utilization.

What It Means for the Industry

The Qingdao sample shows that old clothing recycling has become fully commercialized. Front-end competition is intensifying, profits are concentrating in the export link, and once the export market contracts, the entire chain will come under pressure. According to estimates by the China National Textile and Apparel Council, China generates more than 20 million tons of waste textiles each year, with a reuse rate of less than 10%. If 60% were recycled and reused, it would be equivalent to saving 18.8 million tons of crude oil annually. Under the double squeeze of a cooling export market and blocked domestic regeneration paths, who will absorb this capacity and how policy goals will be implemented will determine the next step in the survival space for recycling enterprises and sorting exporters.

Source: A Hundred-Billion Market! Old Clothing Recycling, Industry Exploration: 30% Can Be Exported, Winter Clothing Shipped to Southeast Asia, Summer Clothing Very Popular in Africa · Originally published on 2023-12-04