Second-hand economy in Canada worth $30 billion annually, report finds

Inaugural Kijiji Second-Hand Economy Index Measures Impact on GDP, Jobs and Money in Your Pocket

TORONTO, Feb. 24, 2015 /CNW/ - Canadians spend close to $30 billion each year on used cars, hockey equipment and baby furniture, among other items, according to the inaugural Kijiji Second-Hand Economy Index, released today.  The study, undertaken for Kijiji on its 10^th anniversary in Canada by researchers from the University of Toronto and Montreal's Observatoire de la Consommation Responsable, also reveals that second-hand goods spending by Canadians contributes close to $34 billion to the country's gross domestic product (GDP) in Canada by diverting dollars away from items that would otherwise be imported.  Other benefits of the second-hand economy include job creation and a reduction in environmentally harmful waste, the study shows.

"Kijiji has been enabling Canadian consumers to save and earn millions of dollars through the second-hand economy for a decade, and as we reached this important milestone we felt it was time to take a closer look at this alternative economic force," said Scott Neil, Director of Vertical Business, Kijiji Canada.  "What the research revealed is that the second-hand economy creates a significant win-win-win situation by helping families, the country and the environment."

According to the Kijiji Second-Hand Economy Index:

• Annual sales of second-hand durable and semi-durable goods in Canada are now estimated to be $30 billion, or about 15 per cent of the value of new goods purchased.
• More than 80 per cent of the durable and semi-durable goods bought by Canadian consumers are imported rather than made in Canada. Spending in the second-hand goods market contributes approximately $34 billion to Canada's GDP that would otherwise flow out of the country. This means that extending the useful life of these goods is actually good for the local economy.
• On average, each Canadian grants a second life to 76 products each year, across 22 product categories through buying, selling, trading and donating via peer-to-peer channels such as online classifieds, donations, local thrift shops and more.
• The average family of four in Canada saves approximately $1,150 per year by buying second-hand goods.
• Each $1 billion of second-hand sales contributes about $340 million to government revenue, through the taxation of the income increases related to the diversion of spending away from imported durable and semi-durable goods.
• At the current rate of spending, with the total contribution to GDP, the second-hand market can be said to support approximately 300,000 jobs in the Canadian economy.

Beyond dollars saved and earned, the report highlights the environmental virtues of extending the life of products through the second-hand economy, in terms of reducing harmful impacts associated with manufacturing and distributing new things, and discarding old items well before their time.  According to Statistics Canada, every year, Canadian consumers spend close to $200 billion on new durable and semi-durable consumer goods, with the cost of depreciation pegged at $100 billion, a signal that one of the study's authors says points to goods being discarded prematurely. 

"By making products last longer, and getting more out of them, consumers can maintain a high standard of living while staying within the bounds of environmental sustainability," says Peter Spiro, Executive Fellow of the Mowat Centre for Policy Innovation at the University of Toronto and one of the report's authors.  "The Second-Hand Economy is a remarkably simple, and essentially painless, way to reduce Canada's carbon footprint."

The full report can be found at secondhandeconomy.kijiji.ca – a landing page dedicated to sharing stories of the second-hand economy in Canada. Canadians can share how they participate in the second-hand economy through social media by using #SecondHandEcon.

Additional key findings from the report:

The Number 76

• Out of the 76 items to which the average Canadian grants a second life, 35 were acquired (the majority via purchases, but also through trading and receiving free) and 41 were recirculated (the majority were donated)
• The top three most used channels for second-hand practices are:
  • Kijiji.ca (17%)
  • Family, friends or acquaintances other than through social channels (15%)
  • Family, friends or acquaintances through social channels (15%)
• The Prairies (115) and Alberta (106) appear significantly more engaged in second-hand practices compared with Quebec (50), which registered the lowest score

Motivations

• Saving money is the most commonly cited reason Canadians acquire second-hand products (mentioned by 75% of survey respondents), followed by ecological benefits (65%) and the thrill of treasure-hunting (58%)
• When it comes to recirculating products, the most common motivation was ease of disposal, or pragmatism (mentioned by 73% of survey respondents), followed by doing good for others and society, or altruism (65%) and ecological benefits (62%), trailed by making money (57%)
• The most commonly exchanged goods through second-hand practices are:
  • Clothing, shoes and fashion accessories
  • Entertainment equipment, such as books and DVDs
  • Baby clothing and accessories

Kijiji Second-hand Economy Index Report Methodology

Primary data was collected using a sample of 2003 total respondents representative of the Canadian population. The survey was conducted online in partnership with MBA Recherche. Respondents were selected from a pan-Canadian Web panel according to pre-specified retention criteria such as gender, age and place of residence. Given that responses were obtained from a panel, the computation of the margin of error does not apply. This research was conducted by the Observatoire de la Consommation Responsible, under the supervision of Fabien Durif.

From an economics perspective, the methodology used was within the framework of input-output modeling and multiplier analysis that is widely used in macroeconomics. The aim was to answer the question of whether second-hand spending is likely to provide a positive economic benefit, or detract from economic growth by reducing purchases of new goods. This research was conducted by Peter Spiro from the University of Toronto.

About Kijiji Canada
Kijiji, which means "village" in Swahili, is the number one classifieds website in Canada, connecting twelve million buyers and sellers each month.  Kijiji offers Canadians a free, easy and local way to buy, sell and trade goods and services in their community. With local sites for more than 100 cities and towns across the country, Kijiji makes it easy for Canadians to find exactly what they're looking for in their own community.

Note to editors:  Regional data is available for Ontario, Quebec, Alberta, B.C., the Prairies and Atlantic Provinces.

An infographic highlighting the study findings can be downloaded here.

SOURCE Kijiji Canada

Image with caption: "The Kijiji Second-Hand Economy Index (CNW Group/Kijiji Canada)". Image available at: http://photos.newswire.ca/images/download/20150224_C4935_PHOTO_EN_12486.jpg