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

  • Why do you need a pet insurance, right here, right now

    Economic 24news
    Many Canadians would consider their pets as a part of their immediate, granular, family. Although some professionals think it’s not healthy, that’s the way life is in the twenty first century; There is a steep decline in the birth rate globally, with Japan leading the pack, and pets are filling in the void.
  • Why Trump's desire for a protectionist wall threatens more than NAFTA: Don Pittis

    Economic CBC News
    Completing Donald Trump's Mexican border wall seems as far away as it ever did. But some Canadian trade experts fear the protectionist president may be succeeding in building trade walls that could weaken the entire global economy. Source
  • Lower U.S. business taxes, uncertainty over NAFTA complicate Trudeau's investment pitch in Davos

    Economic CBC News
    One of Canada's central aims at this year's World Economic Forum is to convince global business leaders that Canada is still an attractive place to invest. It is a challenge made all the more difficult because of the uncertainties posed by ongoing NAFTA negotiations and recent cuts to U.S. Source
  • Amazon to debut store without checkout in downtown Seattle

    Economic CTV News
    SEATTLE - Amazon employees have been testing it, but is the public ready for a cashier-less store? More than a year after it introduced the concept, Amazon is opening its artificial intelligence-powered Amazon Go store in downtown Seattle on Monday. Source
  • Asian stocks mixed after U.S. government shutdown

    Economic CTV News
    BEIJING - Asian stock markets were mixed Monday after global investors shrugged off the latest U.S. government shutdown. KEEPING SCORE: The Shanghai Composite Index rose 0.2 per cent to 3,495.40 while Tokyo's Nikkei 225 lost 0.2 per cent to 23,764.96. Source
  • Amazon to debut cashier-less store in downtown Seattle

    Economic CTV News
    SEATTLE -- Amazon employees have been testing it, but is the public ready for a cashier-less store? More than a year after it introduced the concept, Amazon is opening its artificial intelligence-powered Amazon Go store in downtown Seattle on Monday. Source
  • 'Archaic' liquor laws in B.C. hurt consumers, whisky distributor says

    Economic CTV News
    VANCOUVER -- An Alberta-based whisky distributor says "archaic" liquor policies in British Columbia are limiting the range of products consumers can access. Robert Carpenter with the Scotch Malt Whisky Society says B.C. bars have long skirted rules that prevent them from buying unique products at private liquor stores that aren't carried at government stores. Source
  • With a deep tech talent pool, Toronto could hit Amazon's 'sweet spot' with bid for new HQ

    Economic CBC News
    Toronto faces stiff competition in its bid to court Amazon, but some Canadian tech experts agree that among the 20 cities short-listed as potential locations for the company's second headquarters, Toronto might just hit "the sweet spot. Source
  • HBC's Lord & Taylor to lay off 200 in U.S. operations move

    Economic CTV News
    WILKES-BARRE, Pa. -- Lord & Taylor has announced that it will be laying off about 200 people at a Pennsylvania distribution centre as it moves some operations to a new location about 80 kilometres away. Source
  • Four things to watch for in the Canadian business world in the coming week

    Economic CTV News
    TORONTO -- Four things to watch for in the Canadian business world in the coming week: Time to have "the talk"? Alimentation Couche-Tard's hosts its first-ever investor day on Monday. The large convenience store chain, which operates as Circle K outside Quebec, recently said it hasn't given up hope of selling cannabis as some Western Canadian provinces turn to the private sector for over-the-counter sales. Source