On December 21, CCTV exposed a second-hand clothing refurbishment supply chain: used clothes from community recycling bins and even garbage stations are simply sorted and refurbished without cleaning or disinfection, then re-enter the market through e-commerce livestreams under the guise of 'foreign trade overstock' or 'factory clearance.' The related topic has over 40 million views on Weibo, with more than 270 media outlets following up. The report states that this gray chain is highly organized, with recycling, sorting, refurbishing, and livestream sales closely linked, directly squeezing the survival space of compliant merchants and exacerbating the risk of 'bad money driving out good.'

Key Points

  • CCTV exposed on December 21: used clothes are simply sorted and refurbished, then sold in livestreams under names like 'minor-defect one-of-a-kind items' and 'factory overstock'; the topic has over 40 million views and more than 270 media outlets following up.
  • Upstream, the industry chain buys used clothes at 0.5 to 2 yuan per kilogram, some from garbage recycling stations; Changchun has become a distribution hub in Northeast China, with one sorting plant sending dozens of tons of used clothes to livestreams daily.
  • Industry insiders say a three-and-a-half-hour livestream can sell half a ton of goods and generate tens of thousands of yuan in revenue, with clothes almost never cleaned or disinfected.

How the Supply Chain Operates: A Four-Step Closed Loop

The process disclosed in the report can be broken down into four stages: community recycling, centralized sorting, simple refurbishing, and livestream sales. Upstream are recycling bins far removed from the 'public welfare' image donors have—used clothes are rarely sent to remote areas but are bought by commercial organizations at 0.5 to 2 yuan per kilogram, some even collected directly from garbage recycling stations mixed with waste.

The used clothes then enter large warehouses for sorting. According to disclosures, used clothes were once piled up in a corn storage warehouse in Tieling; better-quality items are labeled 'premium' and re-tagged, with a tagged down jacket selling for 59 yuan, better materials in the teens, and flawed 'ordinary' items like cardigans priced at only 4 yuan. Changchun is considered the core distribution center for used clothing sorting and circulation in Northeast China. The head of 'Daling Used Clothing Recycling Factory,' which CCTV visited undercover, said most of the used clothes recycled by the factory ultimately go to e-commerce livestreams, and recently demand has even exceeded supply, with the factory alone sending dozens of tons of used clothes to livestreams daily.

The 'Zero Cost, Multiple Accounts, Fast Turnover' Profit Logic

The report points out that used clothes are purchased by the ton, with quotes as low as 600 yuan per ton and 20 yuan for a down jacket, and they are almost never cleaned or disinfected before leaving the sorting plant—any additional process is seen as raising costs. After sorting and tagging, these clothes are sold in livestreams at prices ranging from a few yuan to hundreds of yuan, with astonishing profit margins; some merchants even select goods on the spot at wholesale markets and start livestreaming immediately.

The core of the sales end is using scripts and visuals to 'whitewash' the second-hand nature. According to industry insider Lao Liu, livestreams use heavy beauty filters and lighting to conceal the condition, and 'a three-and-a-half-hour livestream can sell half a ton of goods, generating tens of thousands of yuan in revenue,' with some hosts measuring weekly sales in tons. Hosts generally avoid the word 'second-hand,' replacing it with phrases like 'slightly dirty, minor defects,' 'new with tags,' or 'premium cardigan for 4 yuan.' Categories cover women's, men's, and even children's clothing, and consumers frequently complain of loose threads under the arms, yellowed collars, and pungent odors upon receiving the items.

In October this year, Ms. Huang from Sichuan bought a used piece of clothing for 88.89 yuan in a livestream, only to find it was one she had mended and donated years ago; another netizen 'bought back' a coat they had donated ten years ago for 399 yuan. These individual cases brought the used clothing refurbishment issue to public attention.

It is worth noting that refurbished used clothes entering livestreams are not scattered operations. Some merchants say an operator typically runs multiple livestream rooms, broadcasting in rolling shifts throughout the day; a single session's revenue of tens of thousands of yuan may not seem high, but stacked across multiple accounts it forms a considerable daily sales scale. Essentially it is 'zero cost, multiple accounts, fast turnover,' a model that already appeared in 2024. The end target is the price-sensitive lower-tier market: unit prices are extremely low, after-sales rights protection costs often exceed the value of the goods, and many consumers choose silence after discovering problems, reducing sellers' after-sales pressure.

Impact on the Industry: Dual Damage to Trust and Ecosystem

The report argues that the most direct consequence of this exposure is shaking consumer trust in livestream e-commerce. On social platforms, the perception that 'cheap goods are no good' has been reinforced, with some users explicitly stating they will no longer buy clothes through livestreams; even when facing qualified products, decisions are more cautious and conversion is lower.

For the industry ecosystem, the recycling of second-hand clothing is a legitimate business for efficient resource use, but once it is disguised as 'new overstock' and enters livestream channels, what is tarnished is not only the reputation of the 'second-hand economy' but also consumers' trust in the concepts of 'overstock' and 'livestream rooms' themselves. The first to suffer are small and medium-sized merchants and white-label sellers who rely on livestream channels and operate compliantly.

The article points out that compliant merchants still bear quality inspection, fulfillment, and after-sales costs, yet must compete on the same stage with refurbished used clothes purchased at near-zero cost; the cost structure is distorted, and the profit space of legitimate operators is eroded. What this exposes is not mere price competition but the systematic, large-scale injection of non-compliant goods into e-commerce circulation. Therefore, platforms and regulators are seen as key: platforms need to strengthen review of product sources, processing procedures, and sales qualifications, and establish traceable supply chain disclosure mechanisms; regulators need to quickly fill the institutional and enforcement gaps in used clothing recycling, sorting, and re-circulation to block problematic clothing from entering the consumer market at the source.

For operators engaged in legitimate used clothing recycling, sorting, and export, the collateral impact of this incident cannot be ignored: when consumers cannot distinguish 'compliant resale' from 'refurbished whitewashing,' the trust cost of the entire second-hand clothing circulation chain will rise; conversely, transparent source disclosure and processing records may become a new threshold for channel access.

Source: Another batch of merchants is about to be banned · Originally published on 2025-12-25