Despite the overflow of unsold clothing in developed markets, a demand for secondhand items persists in emerging ones like Africa. This discrepancy provides a promising opportunity in the global resale or recommerce market, due to hit about $350 billion by 2027, and South African startup FARO aims to seize it.
Leveraging the resale market
South African startup, FARO, surfaced last year intending to make fashion more affordable while reducing textile waste across Africa. The firm ensures popular brands like Calvin Klein, Tommy Hilfiger, and Zara get a second life in South Africa, thereby balancing demand in both markets while reducing waste.
The startup sources predominantly reconditioned returns and overstock items from major brands, offering some items at 70% discounts. Targeting a 45% fixed-margin model, they reinvest extra profits into better pricing for customers.
Making shopping smarter with AI
FARO plans to incorporate AI to streamline operations and improve inventory management. Investing in AI could automate traditionally labor-intensive tasks, providing a hassle-free shopping experience.
The startup also proposes personalized shopping tools to enhance a customer’s experience, allowing them to be notified when desirable items reach stores.
FARO’s journey to a thousand stores
Beginning 2023 with a pop-up store in South Africa, FARO quickly proved its potential. While their ambitious goal of scaling to 1,000 stores might seem steep, their integrated operational and marketing strategies may prove to be their ticket to success.
Original source: Read the full article on TechCrunch
