Canadians turn to the second-hand market amid tepid economic growth

TORONTO - When Amahl Arulanandam decided to get back into playing guitar in 2014, he turned to Kijiji.

The online classifieds site helped him score a Jackson guitar for $250 - a steep discount from the $600 he estimates it's worth.

See Full Article

Since then, Arulanandam has bought three bicycles using Kijiji. The first turned out to be a dud, but that hasn't deterred him.

"I make a reasonable amount of money but it's not a regular, fixed income," says the freelance musician.

"Anywhere that I can save money just to make sure that I'll have a float for later on, in case I have a dry month, that's always helpful."

The second-hand economy - which includes everything from used goods stores to classified websites to online communities where users can trade goods - provides consumers with an opportunity to save money on their purchases or earn a little extra cash by selling stuff they no longer need.

With the economy projected to grow at a tepid pace this year, some economists say the number of Canadians participating in this segment of the economy is likely to grow.

"In every downturn, there are always people that get harder hit that are looking for ways of trying to MacGyver a better quality of life with whatever they've got," says Armine Yalnizyan, a senior economist with the Canadian Centre for Policy Alternatives.

"And it doesn't always take money. You can spend less and live well, if you can figure out how to work with others who can trade stuff that you want."

According to a report sponsored by Kijiji released earlier this week, roughly 85 per cent of Canadians took part in some form of second-hand transaction last year.

The report, which polled 5,990 people online, estimates that the second-hand economy contributes as much as $36 billion to Canada's GDP.

The Marketing Research and Intelligence Association, the polling industry's professional body, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

While much of the second-hand economy involves purchasing goods outright, there is another component that doesn't involve money changing hands at all.

In online bartering communities like Bunz Trading Zone, popular amongst millennials, users swap their unwanted items for things that they need.

Emily Bitze started the Toronto-based community in 2013 when she was working at a vintage shop and found herself so stretched one day that she couldn't afford pasta sauce for her spaghetti.

"I lived paycheque to paycheque," Bitze recalls. "There were often times where I couldn't afford to actually buy food."

Bitze decided to create a Facebook group where she could trade goods with her friends. Since then, the online community has swelled to more than 30,000 members, and Bitze recently launched a smartphone app. A countrywide expansion and a U.S. launch are in the works.

Lindsay Tedds, a co-author of the Kijiji study and a professor at the University of Victoria, says most transactions in the second-hand economy represent new economic activity - purchases that wouldn't have happened otherwise. That means they aren't detracting from economic growth.

However, in some instances consumers who would have bought new goods are turning to the second-hand economy instead - a phenomenon that can further fuel the cycle of slow economic growth, says Yalnizyan.

"If they're buying used because it's something they need and can't afford it new, it will slow down the economy," Yalnizyan says.

Bunz partner David Morton says that isn't the millennial generation's problem to solve.

"We're going to let the economists sort that out," says Morton.

"Whoever is to blame for the current economic situation - it's not us. We've just entered the workforce. The people who have been working and voting and being a part of the system since before we were alive, they're the ones who put us in this position. We're just taking care of us."



Advertisements

Latest Economic News

  • Poker tables keep decreasing on Las Vegas casino floors

    Economic CTV News
    LAS VEGAS -- When the Monte Carlo closes its eight-table poker room in about a month as part of a $450 million overhaul, the Las Vegas Strip will have lost nearly a quarter of the tables it had a decade ago. Source
  • Las Vegas casinos continue to close poker rooms

    Economic CTV News
    LAS VEGAS -- When the Monte Carlo casino closes its eight-table poker room in about a month as part of a $450 million overhaul, the Las Vegas Strip will be down nearly a quarter of the tables it had a decade ago. Source
  • Google's YouTube loses more advertisers over offensive videos

    Economic CBC News
    An advertising boycott of YouTube is broadening, a sign that big-spending companies doubt Google's ability to prevent marketing campaigns from appearing alongside repugnant videos. PepsiCo, Walmart Stores and Starbucks on Friday confirmed that they have also suspended their advertising on YouTube after the Wall Street Journal found Google's automated programs placed their brands on five videos containing racist content. Source
  • National contest tries to convince students that lucrative sales jobs are 'sexy'

    Economic CBC News
    Sonya Meloff wants everyone to know that a career in sales is sexy. Not sleazy. "I think that sales is a really sexy job," says the founder of the Toronto's Sales Talent Agency. "You get to be at the forefront of representing a company, you're the one that gets to talk to the customers. Source
  • Report examines grim Bangladesh leather trade, links to West

    Economic CTV News
    DHAKA, Bangladesh -- Hazardous, heavily polluting tanneries, with workers as young as 14, supplied leather to companies that make shoes and handbags for a host of Western brands, a non-profit group that investigates supply chains says. Source
  • Notley: Keystone XL doesn't lessen need for Energy East, Trans Mountain

    Economic CTV News
    CALGARY -- Alberta Premier Rachel Notley says U.S. approval of the Keystone XL pipeline does not lessen the need for two other controversial proposals within Canada's borders. U.S. President Donald Trump announced the green light for the line more than eight years after Calgary-based TransCanada first applied for a cross-border permit. Source
  • Trump's Keystone XL decision sets up new fight in Nebraska

    Economic CTV News
    LINCOLN, Neb. -- U.S. President Donald Trump may have approved a federal permit for the Keystone XL pipeline, but the fight is far from over in Nebraska, the one state in its path that has yet to approve the project. Source
  • Toronto stock index extends rally, Wall Street mixed after 'Trumpcare' pulled

    Economic CBC News
    Specialist Stephen Naughton, left, and trader Michael Milano work on the floor of the New York Stock Exchange on Wednesday. North American equity markets finished mixed on Friday after U.S. Republicans withdrew their bill to overhaul Obamacare. Source
  • PepsiCo, Wal-Mart, Starbucks join YouTube ad boycott in U.S.

    Economic CTV News
    SAN FRANCISCO -- An advertising boycott of YouTube is broadening in a sign that big companies doubt Google's ability to prevent marketing campaigns from appearing alongside repugnant videos. PepsiCo, Wal-Mart Stores and Starbucks on Friday confirmed that they have also suspended their advertising on YouTube after the Wall Street Journal found Google's automated programs placed their brands on five videos containing racist content. Source
  • Debate renewed over economic benefits of Keystone XL pipeline

    Economic CTV News
    U.S. President Donald Trump is calling his administration's approval of the Keystone XL pipeline a new era for American energy policy. As expected, the State Department reversed a decision by the Obama administration and favoured energy development over environmentalists' objections to the pipeline, which will carry thick Canadian crude oil to Nebraska, where it can flow on to refineries along the Gulf Coast. Source