Used clothing recycling is no small business in China. According to the 'White Paper on Environmental Benefit Assessment of Used Clothing Recycling and Resource Utilization' released by the Environmental Resources Committee of the China National Textile and Apparel Council in March 2021, China generates about 6 million tons of waste textiles annually from production and consumption (excluding existing stock), growing at over 10% per year. Qingdao currently has 5 used clothing recycling companies, with over 3,000 collection bins citywide, collecting about 4,000 tons annually.

Key Points

  • China exports over 10 million tons of used clothing annually, accounting for only 20% to 30% of total recycled volume but contributing about 70% of industry profits.
  • Qingdao's 5 used clothing recycling companies have deployed over 3,000 bins, collecting 4,000 tons annually; internet-based door-to-door recycling is free, while scrap shops pay 0.1 to 0.15 yuan per kilogram, and smart bins pay 0.8 to 1 yuan per kilogram.
  • In January 2022, Rizhao implemented the 'Rizhao City Used Textile Recycling and Utilization Management Measures (Trial)'; in 2018, Shenzhen released China's first urban standardized technical guidance document for used textile recycling and comprehensive utilization.

Multiple Channels Compete for Supply, Price Differences Sustain the Industry

Recycling channels are becoming more diverse. Searching 'recycle old clothes' on Alipay yields over 20 corporate mini-programs, generally using online booking and door-to-door pickup. Among them, 'Fei Ma Yi Old Clothes Recycling' shows over 2 million users, 'Bai Jing Yu Old Clothes Recycling' over 1 million, and 'Ai Guo Old Clothes Recycling' showed over 8,200 cumulative participants as of February 24. Douyin livestreaming has also become a new customer acquisition channel, attracting many to enter the industry.

Prices vary by channel. Internet door-to-door recycling is basically free; individual operators and scrap shops pay 0.1 to 0.15 yuan per kilogram; smart waste sorting bins pay 0.8 to 1 yuan per kilogram. Regardless of the method, old clothes ultimately go through sorting and baling to enter the downstream, with the price difference driving the industry.

Zhu Youheng, head of Qingdao Yizaisheng Environmental Protection Technology Co., Ltd., has been engaged in used clothing sorting and export for over 10 years, exporting 200,000 tons annually. He cited the price differences: 1 ton of mixed goods (all types of old clothes from bins) is about 1,200 to 1,500 yuan; after sorting, 1 ton of summer clothes is about 4,000 to 5,000 yuan; 1 ton of old down jackets can exceed 10,000 yuan. Sorting first categorizes into summer clothes, winter clothes, sweaters, down, big white (pure white sweaters), second white (light-colored sweaters), and floral cotton-wool (dark-colored). To meet export standards, further subdivision is required, such as children's tops, children's bottoms, and jeans packed separately, shipped to African countries.

Exports Are the Main Profit Point, but Repeated Pandemic Disruptions

Exports are seen as the industry's most important profit source: China exports over 10 million tons of used clothing annually, only 20% to 30% of total recycled volume, yet profits account for about 70% of the industry. Zhu Youheng said that after the COVID-19 pandemic emerged, export business basically stopped, with factories under pressure from piled-up goods and cash flow, leading to lower purchase prices; exports briefly recovered at the end of 2020 with surging demand for backlogged goods, but in the second half of 2021, the Omicron outbreak in multiple African countries paused exports again.

'Free-Range' and Qualification Dilemmas

Industry pain points center on lack of regulation. An insider said the threshold for used clothing recycling is low: 'a car, a scale, and one person' can do door-to-door recycling. Wang Long, head of Qingdao Haicang Environmental Technology Development Co., Ltd., believes that although the industry has formed a relatively mature supply chain, it lacks standardization and norms. Unqualified companies 'fishing in troubled waters' also trouble city management—randomly placed bins in communities, once abandoned, become ownerless street waste furniture. Insiders point out that the industry is in a 'free-range' state and policy gray area, with imperfect daily supervision, lacking sound market mechanisms and certification standards, and some unqualified companies recycling under the guise of 'public welfare' and reselling for profit.

Breakthrough Directions: Rules, Institutions, and Technology

Wang Kai, secretary-general of the Waste Textile Comprehensive Utilization Alliance Special Committee of the Shandong Circular Economy Association, suggests improving laws and policies on used textile recycling and reuse, establishing qualification requirements and entry thresholds for recycling entities, and calls for Qingdao to quickly introduce similar norms or management measures, setting standards for personnel, factories, environment, and tracking the flow of old clothes. He cited references: in 2018, Shenzhen released China's first urban standardized technical guidance document for used textile recycling and comprehensive utilization, the 'Specification for Recycling and Comprehensive Utilization of Used Textiles'; in January 2022, Rizhao implemented the 'Rizhao City Used Textile Recycling and Utilization Management Measures (Trial)'.

Qu Lijun, a professor at the Textile and Clothing College of Qingdao University, suggests that the government lead the establishment of a specialized used clothing recycling agency to bridge residents, manufacturers, and sellers, allowing better-quality clothes to enter the second-hand clothing market after strict disinfection and refurbishment, with standards, supervision, and traceability in each step of recycling, sorting, disinfection, and refurbishment. She also proposes encouraging research on regeneration and utilization: waste textiles are mostly blended, and high-value reuse requires classification and grading by composition, and developing sorting technology and equipment to accurately separate wool, cotton fibers, and chemical fibers and other effective components to produce high-value-added textiles from recycled fibers.

Source: Old Clothes 'Hide' a Big Market! Qingdao Currently Has 5 Used Clothing Recycling Companies, Deploying Over 3,000 Bins · Originally published on 2022-03-14