This company made a revenue of 400 million yuan last year by selling second-hand clothing in Africa. | Go Global New Land

Introduction: The global business is in a state of turmoil and upheaval, and going global has become an unavoidable proposition for many Chinese companies. The 6.5 billion people overseas are scattered in nearly 200 countries and regions with extremely unbalanced development. The difficulty of getting involved in this complex market may far exceed the entrepreneurs' predictions or imaginations.

HardcoreTech has been paying close attention to the overseas market and going-global enterprises. Based on this, HardcoreTech launches a new column: "Going Global New Land". We will cover developed countries and regions such as Europe, the United States, Japan, Australia, and also focus on emerging markets such as Southeast Asia, Latin America, the Middle East, and Africa.

The column will take companies and products as the core, disassemble the practical operation process of successful going-global companies from a professional perspective, and analyze the causes and consequences of popular products in a country or region. Our higher expectation is to understand and convey the glimmer of new trends.

The following is the sixth article of this column

Author | Lin Qingqing

Editor | Yuan Silai

Walking on the streets of Africa, your eyes often catch some unexpected Chinese characters. The young people doing business on the roadside are wearing a blue T-shirt with a line of words that Chinese people are very familiar with: "Order takeout, on Ele.me"; The girl riding a bike is wearing a goose-yellow T-shirt with the words "Crossing Shenzhen" printed on it, and the black trousers are printed with "Run, Brothers".

These clothes with large Chinese characters printed on them are second-hand clothing from China that has traveled across the ocean.

In Africa, millions of tons of used clothes flow into the clothing market every year, and behind it is a business worth hundreds of billions of dollars.

In 2023, the global sales of second-hand clothing reached 211 billion US dollars, with a year-on-year growth of 19%. In 2024, the scale of the African clothing market alone has reached an astonishing 70.58 billion US dollars, with a compound growth rate of 5.16%.

Of course, this market will not lack Chinese fortune seekers.

In 2010, when Guo Song was in college, he collected or purchased the military training uniforms that his classmates threw away by the trash can after military training. After accumulating a certain amount, he packaged them and sold them to an external military training base, earning his first pot of gold in life. Since then, Guo Song has developed the idea of entering the second-hand clothing industry.

In 2016, Guo Song and his team founded "Greenzer" in Guangzhou. The latter uses a big data system and a logistics recycling network to collect, sort, and package idle textiles in China, and finally sells them to many countries and regions such as Africa (Cameroon, Kenya, Congo, etc.) and Southeast Asia (Thailand, Cambodia, etc.).

According to statistics, "Greenzer" processes tens of thousands of tons of second-hand clothing every year, and their main battlefield is in Africa, with more than 60% exported to Africa. Last year, the transaction volume of second-hand clothing exported by "Greenzer" exceeded 400 million yuan.

A Vast Domestic Market

"In Africa, buying second-hand clothes depends on 'grabbing'." Guo Song told 36Kr.

Africa, a continent with nearly one-sixth of the world's population, has now become the largest import market for second-hand ready-to-wear clothing in the world. Among them, Nairobi, the capital of Kenya, has the largest second-hand market in East Africa. Tens of thousands of second-hand clothes gather and transfer here every day, forming an important part of the African second-hand market.

In 2021, China became the largest exporter of second-hand clothing to Africa. Among them, Kenya is the most important importer in Africa, and Chinese second-hand clothing accounts for more than 40%. A research report by the China National Garment Association shows that in 2021, the import value of second-hand clothing in Africa reached 1.84 billion US dollars, of which China's export value of second-hand clothing to Africa reached 624 million US dollars.

For the people of many countries in Africa at present, buying new clothes is often regarded as a luxury consumption. In economically backward African countries, only 10% of consumers can afford new clothes, 50% are wearing second-hand clothes, and the remaining 40% can't even afford old clothes. Many families still have to rely on clothes donated by overseas charity organizations to make a living.

Compared with second-hand clothing from Europe, the United States, Canada, Japan, and South Korea, second-hand clothing from China is more affordable and has novel styles, which greatly meets their growing demand for clothing and has become a more practical and popular choice for them.

Before entering the international market, these old clothes exist in waste disposal sites such as garbage stations and community clothing recycling bins. After being recycled, disinfected, sorted, and packaged by sorting companies, they are sold to second-hand clothing export companies. They are sorted, processed, and then compressed into cubes and packaged, shipped to Africa, transported to various towns and villages in African countries by local agents, and sold with tags.

"Agents will see the old clothes inside through the packaging of the compression package, and consider whether the color is new, the color is good-looking, and the style is trendy; even if they have bought it once, most people still have to shop around, and even if they only choose one package, it will take them a whole morning to choose. Because the money in their hands can only afford one package. If they lose money, the four or five children in the family will have no food for the next three to five days. This is a survival problem." Guo Song told 36Kr.

Second-hand clothes are not only a daily necessity for Africans, but it has already permeated the local economic lifeline. Kenya has a population of 54 million, and millions of people make a living in the second-hand clothing industry, accounting for nearly 10% of the country's working population.

"Previously, some countries such as Uganda, Kenya, and Tanzania have proposed to ban the import of second-hand clothes on the grounds that it affects the local textile industry. However, on the contrary, second-hand clothes can not only meet the living needs of local people, but also provide job opportunities and support the operation of society. If the social problems do not change, second-hand clothing will always be a rigid demand. As long as there is demand, the market will always exist, and it cannot be banned by policies alone. Ordinary people cannot afford the new clothes produced by the local textile industry, and those are generally for export to earn foreign exchange. Only when the economy develops, people's income increases, and after solving the problems of food and clothing, medical care, and education, there is a surplus, can they afford new clothes." Guo Song analyzed.

African Problem: Goods Go Global, but People Have Difficulties

Doing business in Africa and rushing to set up a company locally is sometimes not a "smart" choice.

In the years when "Greenzer" was expanding rapidly, Guo Song and the team had a disagreement on "whether to form a team in Africa".

"The business is doing so well. Why not follow the development path of most companies, set up a branch overseas, station locally, and reduce costs?" In the end, considering the company's future planning, Guo Song compromised.

That year, "Greenzer" chose Uganda as its first overseas site.

A relatively stable market environment is an important reason for choosing Uganda. In addition, the local customs clearance policy is also the most headache problem for Guo Song's team when making the initial choice.

"The customs clearance policy changes constantly. It's okay that the customs clearance cost is high. They also create various problems to make things difficult for you. For example, it is very difficult to clear customs for used clothes in Zambia. The customs will hold you at the border for one or two months. After two months, the goods will 'disappear'. The reply is either 'The road is slippery due to rain and the goods are lost' or 'They were robbed on the way'. We have no way to ask for help and can only suffer in silence."

This part of the loss can only be borne by Guo Song's team for the customers. In order to enter the market, Guo Song's team must be prepared to "sacrifice one or two containers of goods". In addition, they will urge local customers to enter the customs clearance white list to reduce losses. "We teach customers that first, they should pay taxes legally and compliantly; second, basically do not evade taxes; third, they should be more cooperative when the tax bureau and customs come to inspect. In this way, even without spending the so-called'money for handling', the problem of entering the country is not big."

After these problems were solved, Guo Song's team set up a site in Uganda.

"At that time, I thought that our team would sell by ourselves, and at the same time form a good cooperative and interactive relationship with local distributor customers, without conflict with each other."

However, this approach was resisted by local distributors at the beginning, who regarded it as "snatching their jobs", and they chose to stop cooperating with "Greenzer". Although these customers were won back after repeated explanations, the initial work of "Greenzer" in the local area still encountered considerable resistance.

In Uganda, within less than half a year, Guo Song's team achieved a scale of 10 million per month, and the annual gross profit could reach 20%.

However, in the third year of going to Africa, the site completely collapsed, and Guo Song led the team to withdraw completely to China.

There are many reasons for the collapse, and Guo Song still feels a bit uncomfortable when he thinks about it now.

Goods go global, but people have difficulties going global. This is Guo Song's profound experience after reviewing this experience.

Guo Song told 36Kr that there are many gray areas in the personnel management and actual operation of the overseas team. "First, there is a large operational space loophole in the sales price; second, whether the products in the warehouse are more or less is completely verified by manual work; third, in many African countries, the banks do not have sufficient foreign exchange reserves, and they have to go to the market to buy US dollars. Whether it is legal or not, this is almost gray. In this link, when employees buy US dollars and remit money, it is also completely manual operation, which has caused a lot of problems." Guo Song recalled.

In addition to the difficulty in standardizing the work process, life in Africa is monotonous and lonely, and some employees even linger in casinos.

In addition, there is also a lack of a compliant business environment in Africa. Under many conditions, it is difficult for the company to register and it cannot use the official account. It can only rely on manual work, which has exhausted the last bit of vitality of Guo Song's team. "It's not that we haven't considered recruiting locals, but we can only recruit some manual laborers. There are really too few talents with knowledge and culture".

After closing the site and returning to China, Guo Song focused on the handling of the source of second-hand clothes. "If the problem of people cannot be solved, solve the problem of goods first."

Guo Song admitted that when he entered the game that year, he was stepping on the trend. Now, the entire market is saturated. The most difficult thing is no longer the sales channel, but how to increase sales.

This means polishing the source of goods, the hierarchical processing of the processing chain and other intermediate links, the overall service level of the factory, etc., and completely saying goodbye to the traditional extensive management.

After years of efforts, "Greenzer" has formed its own recycling process. The group includes "Ouyan" for the front-end recycling of the industrial chain, "Greenzer" and "Puyi International" for the mid-end processing, "Dodo Bird" for the overseas circulation and export at the back-end, "Geyong" for the domestic circulation, and "Pulian New Materials" for the recycling. The recycling network covers 245 cities across the country and has the ability to handle more than 200 varieties. It only takes 10 - 20 days to complete an international order from raw materials to delivery.

Guo Song has not given up the idea of opening a physical store in Africa. After all, going-global enterprises must eventually go deep into the local area. "After the comprehensive completion of the domestic digital construction, in the future, we do not rule out the plan to re-enter the overseas market."