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A study on relevance of second hand clothing retailing in Ethiopia

Article in Research Journal of Textile and Apparel · August 2019

DOI: 10.1108/RJTA-12-2018-0063

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Retailing in
A study on relevance of second Ethiopia
hand clothing retailing in Ethiopia
Karan Khurana
Westminster International University in Tashkent (WIUT),
Tashkent, Uzbekistan, and
Ruth Tadesse Received 2 December 2018
Revised 22 January 2019
EiTEX, Bahir Dar University, Bahir Dar, Ethiopia 14 March 2019
10 May 2019
12 June 2019
Accepted 17 June 2019
Abstract
Purpose – This paper aims to highlight the relevance of second-hand clothing (SHC) in the Ethiopian textile
and apparel value chain by investigating its potential and establishing a connect to sustainability from a
consumption point of view.
Design/methodology/approach – Primary and secondary methods of research were used in this
research. Structured observational technique was used to identify the retailers in the city. In total, 70 retailers
of SHC were identified and 15 big size retailers were interviewed with open end questions through judgment
sampling method.
Findings – From the analysis of the field research and scientific literature, the authors strongly believe that
SHC has an important space in the consumer retail segment of the country. This trade remains in the shadow
but is sustaining livelihoods of citizens. The SHC trade provides an automatic balance to the future excessive
consumption which is a result of mass production and hence should be encouraged further on various
dimensions.
Originality/value – Existing literature exhibits statistics of the trade and impact in East African
Community (EAC) missing out on Ethiopia as it is not a member of the EAC. Moreover a connection of SHC to
sustainability established has never been established in the past for under-developing countries, and it is one
of the critical factors in the success of used clothing and future of textile and apparel business. This research
also provides channelized solutions to the business for smooth implementation of SHC in Ethiopia and other
under-developing countries.
Keywords Ethiopia, Retailing, Conscious consumption, Under-developing economies,
Second-hand clothing (SHC)
Paper type Research paper

Abbreviations
SHC = Second-hand clothing;
EAC = East African Community;
SSA = Sub-Saharan Africa; and
SMART = Secondary materials and recycled textiles association.

1. Introduction
An upcoming frontier of development in the world, Ethiopia is the oldest independent and
the fastest developing African country today. The nation could be considered as a latecomer
in the manufacturing sector in Sub-Saharan Africa (SSA), but the recent progress in the
value chain entitles it to be as a “Rising star” in the textile and apparel export sector and Research Journal of Textile and
Apparel
Africa’s largest raw material supplier for the leather industry (Khurana, 2018). Ethiopia © Emerald Publishing Limited
1560-6074
successfully took advantage of the African Growth and Opportunity Act (AGOA) and since DOI 10.1108/RJTA-12-2018-0063
RJTA the early 2000s textile and apparel business began to grow and the export earnings have
jumped almost eight fold from US$9m in 2009 to US$68m in 2014 (Staritz et al., 2016) and
business for social responsibilityTM (2017)[1] adds growth figures from US$60m to US
$160m in the past five years. The Government of Ethiopia hopes to bring in textile exports
worth $30bn by 2025 and increase the GDP of the country, household income, foreign
currency and employment in the country by establishing these industrial parks throughout
the country. Once up to full capacity by the end of 2018, the factories are expected to create
around 60,000 jobs on double shifts, and generate an annual export value of US$1bn. This
mass industrialization will strengthen the economic standing of the nation but
simultaneously also brings in major concerns and challenges from the point of consumption.
Second-hand clothing (SHC) presents an overall socio-economic advantage to this situation
and is the right moment for the governance to ponder about consumption and mass
production from both the ends of the value chain.
SHC and shoes retailing is a growing market all over the world. In the developed
countries fashion leaders have recognized it as a trend where as in under-developing
countries it is seen as an affordable clothing for the below poverty line citizens. The US
supplies approximately 19.5 per cent of total direct exports of used clothing to the East
African Community (EAC) (USAID, 2017). Figure 1 shows the overall contribution of
second-hand exports from the developed to the under-developing parts of the world.
Katende–Magezi (2017) notes that this clothing originates as a donation; it is then
commercialized by particular companies and legally sent to its export destination, as formal
trade from one country to another. An interesting fact contributing to this success of this
trade as stated by Klynveld Peat Marwick Goerdeler (2016)[2] is that most African
consumers especially south of the Sahara desert remain extremely poor and spend most of
their money on food and other necessities. SHC has always been an important part street
retailing in developing economies, as the country is self-sufficient it stops to import from the
developed countries, and India is very good example here. East African community
(Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda) have understood that a
majority of citizens are not financially strong to support first hand clothing markets and
hence the organized SHC business. The used clothing industry creates an estimated 355,000
jobs in the EAC, which conservatively generates incomes of US$230m that supports an
estimated 1.4 million people. In addition to jobs, the import duties and value-added tax

USA
UK
Germany
20%
27% China
Netherlands

13% Belgium
4% Canada

4% 13% Poland
Figure 1. 4% 5% 8% Italy
Global Share of 4%
Others
Second Hand
Clothing Exports,
2015
Source: UN Comtrade
(VAT) paid to EAC governments by importers of used clothing result in over US$140m in Retailing in
estimated annual revenues (USAID, 2017). However, it is surprising discovery that as Ethiopia
Ethiopia does not belong to East African Community (EAC), academic literature (Frazer,
2008; Calabrese et al., 2017; Katende–Magezi, 2017; USAID, 2017) on business of SHC has no
mention about the country. Ethiopia belongs to the under developing country index and here
thrives a SHC market which is either undiscovered or considered illegal by the government.
This research work aims to investigate the potential (concept to consumer) of the hidden
SHC trade in Ethiopia, as currently there are no data on this particular business. As the
research will bring into light socio-economic advantages of SHC, it shall also become an
example for other under-developing countries which are in doubt about this business.
Finally, it also aims to establish an essential connect of SHC to sustainability from a
consumption point of view.

2. Literature review
2.1 Second-hand clothing: a catalyst to conscious consumer
The rate of consumption of clothing is high; meanwhile, the carrying capacity of our Planet
is decreasing. According to Ayres (2008), most of the environmental problems can be
associated with material consumption and disposal, since material inputs become waste
outputs and in particular, fashion industry has huge impacts on global environment
(Battaglia et al., 2014). This raised a controversial debate on conscious consumption and fast
fashion in the West, and we as a consumer society have to look out for ways for sustainable
consumption. Second-hand consumption is a non-excessive, modest consumption type,
which exists in many forms (Gregson and Crewe, 2003; Williams and Paddock, 2003).
Moreover, the success of an economy is not ordered neither by production nor consumption.
This idea might be strange to economists but least consumption and production is the best
scenario as depletion of natural resources or excess waste requires financial capabilities
later on. China[3] is an apt example here; one of the highest producers of textile and fashion
in the world suffers today with 70 per cent polluted rivers and the government is putting
efforts to clean them. This is not an easy task and requires financial inputs which are indeed
negative profits. The upcoming textile and apparel producing nations need to consider the
aftermath of this economic progress before it is too late.
Today, we observe a new trend of socially responsible consumer behavior who are well
aware of the environmental impact of industrial activity and have shown an inclination
towards eco-consumption (Ellen et al., 2006; Liu et al., 2012; Bockman et al., 2009; Schmeltz,
2012; Bekin et al., 2007; Ha-Brookshire and Hodges, 2009; Niinimaki, 2010; Han, 2013). The
reason behind this is that consumer are now aware of human rights, conditions in clothing
factories, environmental challenges and how those issues will affect the future of the globe,
economies and societies. However, Beard (2008) argues that consumer awareness of the
impacts of the fashion industry is quite low and sustainable fashion is still a niche market
rather than a mass-market reality and Johansson (2010) adds that people express that they
are interested in sustainability, but continue to seek out fast inexpensive fashions. Many
consumers chose the less expensive product/fast fashion over the more sustainable one as
ethical and environmental friendly products are often a bit more expensive and in terms of
time and convenience are less available. For consumers with low budget buying, second-
hand clothes is a conflict-avoidance strategy, it is an intermediary way to get out of the
burden of poverty and as a consequence SHC has an economic advantage (Han, 2013). We
consume second-hand clothes to follow budgetary needs on the one hand and on the other it
is being totally sustainable consumption. This is a key motivational factor when buying
dignified second-hand clothes. The fact that second-hand goods are usually cheaper than the
RJTA new ones incentivizes frugal consumers to buy second-hand due to the price advantage
(Anderson and Ginsburgh, 1994).The access to new sustainable clothing is surely not
possible globally. The West might be aware of this cause but in other parts of the world
majorly Asia and the Middle East where the consumption is alarmingly high the consumers
choose whatever in convenient and easy to buy, and this fuels the spread of fast fashion. It is
safe to assume that the number will increase in the future because the demand for apparel is
increasing yearly (Cobbing and Vicaire, 2016).
SHC not only adds a sustainable edge to the fashion and textile sector but also gives it a
high fashion quotient. The trend toward wearing SHC began in the l980s. A few decades
ago, second-hand clothes were of low status, something with connotations to poverty and
low social status (DeLong et al., 2005) but as mass-produced fast fashion has turned clothing
into a disposable and rapid purchase commodity (Morgan and Birtwistle, 2009; Cline, 2012;
Cassidy and Bennett, 2012); today, second-hand clothes are in fashion, highly trendy and
may be intended as a means of self-expression and differentiation (DeLong et al., 2005;
Tungate, 2008). Beard (2008) states that second hand have gone from clothes that were
bought out of economic need to items that consumers are willing to pay “premium for”,
mainly because “they are unlikely ever to bump into anyone else wearing the same one”.
Before that they were not part of the fashion market as trendy products but as stated before
bought because of its relative low prices. Buying a vintage garment has become a consumer
reaction against mass-produced fast fashion, as a way to have a unique piece without
necessarily spending an exorbitant amount of money (Cassidy and Bennett, 2012). It could
be understood that consumption of used garments takes place from ethical consciousness
and distinctiveness.
The business of second-hand clothes is distinctive from ordinary retailing channels often
classified as informal, independent, fringe markets, flea markets, car boot sales e-retailing
(Ebay and OLX), charity shops and (Gregson and Crewe, 2003;Waight, 2013a; Han, 2013).
Such a circumstance has also generated intensive social interaction and bringing together
the conscious consumer. SHC trade supports closing the loop by reusing, repairing,
remanufacturing which are the stepping stones to circular economy (Lovins et al., 2014) In
summary, SHC lies in alignment with the noteworthy concepts of triple P –People, planet
and profits, Slow fashion, conscious consumption and the ‘be different’ spirit of our times.

2.2 Benefits of second-hand clothing to under-developing countries

SHC has fetched numerous benefits to underdeveloped countries in the recent past. The
global used clothing trade is valued at US$4bn[4],[5] of which the world largest importers of
used clothing are Sub-Saharan countries, receiving over 25 per cent of global SHC exports.
The US Secondary Materials and Recycled Textiles Association (SMART) estimates that
the EAC accounts for one-fifth of total US exports of used clothing totaling $147m;
identifying EAC as one of the key markets for US exports of SHC. SHC are locally known as
“mitumba” in Tanzania and Kenya, “mivumba” in Uganda and “mutunda” in Rwanda[6].
Kenya is the largest importer of used clothing in East Africa, with imports totaling US
$124m in 2016. This is equivalent to 6,000; 40-foot containers carrying some 144,000 metric
tons of clothes (USAID, 2017). An in-depth research conducted by the USAID East Africa
Trade and Investment Hub confirmed the existence of approximately 200 distribution
channels linked to roughly the same number of importers of used clothing. Further on there
are more than 100,000 wholesalers and 8,000 retailers supplying all social strata, lower-level
retailers buying and selling cheap garments in low-class urban centers and in the rural
areas. SHC has also assisted sustainable livelihoods though employment to the citizens of
EAC.
 A number of studies of the trade across Africa have shown that importing, trading, retailing, Retailing in
washing, repairing and altering SHC provides significant opportunities for employment in local Ethiopia
secondary markets (Abimbola, 2012; Baden and Barber, 2005; Field, 2000; Field and Schmitz,
2008; Hansen, 2000; Ogawa, 2006). In Tanzania, the industry sustains an estimated 81,000 full-
time jobs (67,000 direct and 14,000 indirect); in Uganda, 87,000 (72,000 indirect and 15,000 direct);
24,000 in Senegal; in Rwanda, 22,000 (18,000 direct and 4,000 indirect); and in Burundi, 5,000
(4,000 direct and 1,000 indirect). Thus, the used clothing industry creates an estimated 355,000
jobs in the East African Community, which conservatively generates incomes of US$230m that
supports an estimated 1.4 million people (USAID, 2017) and in USA the trade accounts for an
estimated 40,000 working class Americans, with an additional 150,000 indirect jobs in the charity
sector (Katende–Magezi, 2017).
According to the Baden and Barber (2005), while SHC represents only a very small
proportion of the global clothing trade, it represents more than 30 per cent of imports and
over 50 per cent by volume of clothing imports to many sub-Saharan countries. SHC is a
standing challenge to the local industries as it destroys clothing industries by killing the
local economy, but on the other hand, it creates local jobs (Brooks and Simon, 2012). It is also
believed that the governments of under-developing lose a lot of money as SHC is sometimes
classified as illegal trading of clothing. However, it is worth a mention that SHC trade has
contributed US$140m tax to the EAC and as listed in Table I.
Chinese products have been a persisting problem as exports to the EAC reached US
$1.2bn in 2016, quadrupling the value of imports of used clothing (USAID, 2017). This has
raised a lot of concern amongst businesses and citizens in the EAC. SHC stands strong
against to the Chinese/Asian imports which indeed helps the local industries. As noted by
Baden and Barber (2005), SHC would inevitably be prey to increasingly inexpensive imports
from Asia which compete with local production. From the above data, it is clear that SHC is
an all-round development to the EAC. However, currently it is being debated by the EAC to
ban the import of SHC, but this surely shall have a lot of negative impact on the livelihoods
of the people around the world.

3. Methods
Authors (Jönsson et al., 2013; Meraviglia, 2014; Steffen, 2017) in the past have used the
methodology of surveying the consumers, but in this research, we targeted the retailers to
get a more in-depth analysis of the situation. This research was held in Bahir Dar city, one of
the big cities of Ethiopia and the capital of Amhara Region with an area 213 km2 and
population around 250,000 people[7]. Bahir Dar is a city which is still on the verge of
urbanization, and it still has a lot of villagers and lower middle class consumer. The
selection of Bahir Dar city was strategic as second hand retailing is an important clothing
purchase where as in the capital city the consumer looks down upon SHC and vending is a
risk activity because vendors were illegal and were always harassed by police and
established businessmen (Jonga, 2012). Therefore gathering of information was comfortable
as compared to the capital city.

Table I.
Estimated amounts
Kenya Uganda Tanzania Rwanda Burundi Total paid by importers of
used clothing in
US$63m US$34m US$32m US$9m US$2m US$140m
duties and taxes,
Source: USAID East Africa trade and investment hub 2015
RJTA A systematic methodology was used to get the results; both primary and secondary
methods were used to clearly chalk out the status and benefits of SHC retailing to the
country. First, secondary data were analyzed from journals and reports on SHC to study the
pros and cons this trade to the west and other countries in the EAC. For primary data
collection, two methods are applied. First, through a structured observational research and
then interviewing the retailers through judgement sampling technique.
Structured observational research: Observation is a classic scientific method (Moser
and Kalton, 2017) that involves recording the behavioral patterns of people, objects and
events in a systematic manner to obtain information about the phenomena of interest
(Dillon et al., 1993; Malhotra et al., 2006). McGivern (2009) further explains how
observational techniques are based on ethnographic methods, they are used in social
research and becoming more prevalent in market research. The researchers observed
and marked the retailers for two months (March-May 2018) in various commercial
corners of the city. Before interviewing the retailers we wanted to check factors such as
customer frequency, size of the shops, business hours and the surroundings of the
market place. The main advantage before interviewing is that researchers could see the
respondent’s natural behavior first hand without the respondent having to think of
answers to questions.
Judgement sampling: In this method, the researcher choses the subjects that are more
suited for the research compared to other individuals (Domegan and Fleming, 2007).
These selection of retailers was based on the size of their buy hence our subjects were
big vendors who had a regular supply of clothing from direct contact to wholesalers in
Addis Ababa. Also it was preferred that we talked to the owners of the shops rather
than salesperson. This assisted us to get more insight on consumer’s preferences (price,
product, style and design) and also frequency of the buy. In this criteria, we found 15
big size retailers in main shopping areas of Bahir Dar city and they were qualitatively
interviewed for 25-30 min with an open end questionnaire consisting of ten questions.
The interviews were conducted in Amharic language as the retailers do not speak
English. The business hours of the retailers were from 10 a.m. to 5 p.m. on all days and
the interviews were conducted just after the lunch hours around 1.30 p.m. when there
were not many customers. The researchers had to pose as consumers as the retailers
would not shell out the information as they would be skeptical of government officials
or business competitors.

4. Results and discussions

4.1 Results of the survey
The survey has helped to mark a clear status of the SHC retailers in the city. Through
observation method it is estimated that the city has around 70 (big and small size) second-
hand retailers around the main market and residential areas. The sizing of the retailers is
based on the quantity of the garments which were displayed and majorly big size retailers
were chosen. We performed this survey to check the health and the prospects of this
business in the coming future. Following are the results of the surveys in accordance to the
questions asked:
 Age and gender of retailers.

A total of 70 retailers were observed in the city, and we interviewed 15 retailers (10 clothing
and 5 shoes) in which majority of them were men. Only one was a woman. The age groups of
the retailers were from 24 to 40 years. It could be concluded here that women are majorly
absent from this trade:
  Product category. Retailing in
The product categories as surveyed were Men, women, kids and shoes. We found all
Ethiopia
products were basic products such as trouser, t-shirt, shorts, women’s top majorly branded
(Polo ralph Lauren, Abercrombie and Fitch, Zara, Levis and American eagle). The
interesting category was shoes as all the five shoe sellers had branded sports shoes (Nike,
Adidas, Puma, Reebok and Asics) for both men and women. It could be understood that
sport shoes are a unisex product:
 Price range.

The price gap between new and used clothing is quite a bit; new clothing is three of four times
more than the cost of used. It should be noted that the new clothing for all categories sells in the
popularly known ‘Merkato’or Gabea[8] and the used clothing retailers find a spot outside the
market. In the table II. below a price comparison of all product categories is shown. The new
clothing is majorly Chinese often fake brand names (Gauci, Arnami, etc.) and imports from
Dubai (original brands). The case of shoes is particularly interesting as some shopkeepers
insisted that the branded shoes are real and that is why they cost a lot due to duties and taxes.
Shopkeepers also had a range of Turkish shoes which were formal/leather shoes. On close
observation the new shoes had sizing label and country of origin label along with the brand
logo but the originality was still a question. It is worth a mention that the used shoes looked
more real than the new ones and hence have a bigger market too. The price of the clothing and
shoes provides a clear justification to consumer’s interest in SHC:
 Do customers choose SHC than new products, if yes, what is the reason?

All sellers agreed that their consumers prefer SHC over the boutiques stores or other retailers
in the market. The reasons identified for consumer interest were high quality, durability,
cheap price, uniqueness and most of all the fabric used in clothing is cotton. We understood
the other factors of selection but wanted to observe more on the fabric quality so we went to a
few shops to check the fabric of Chinese garments. According to our observation mostly all
garments were made of polyester and what was surprising that even kids wear had a major
polyester content. In the case of shoes, it is quite clear that Chinese did not even stand the
quality and comfort parameters when they were compared to the branded second hand ones:
 Do you have regular customers?

The retailers marked that they had regular customers all around the year and sold a lot in
the festive times of the year such as Christmas, Easter and the New Year:

New clothing Used clothing

Item ETH birr US$ Item ETH birr US$

Men’s shirts 400-600 14.5-21.8 Men’s shirts 50-200 1.81-7.20

Men’s trousers 300-700 10.9-25.5 Men’s trousers 150-250 5.5-9.0
Footwear (M/W) 900-2,500 32.7-90.9 Footwear (M/W) 1,000-1,350 36.40-49.0 Table II.
Children’s wear 150-400 5.5-14.5 Children’s wear 20-80 0.70-2.90
Women’s skirts/ trousers 400-600 14.5-21.8 Women’s skirts/ trousers 100-350 3.6-12.72
Price comparison
Women’s tops 200-350 7.20-12.7 Women’s tops 50-120 1.8-4.40 between new and
used clothing (1$=
Source: Authors 27.5 ETB)
RJTA  What is the age and gender of your customers?

Consumers were both men and women ranging from 25 to 50 years of age:
 Is the majority of the consumer men or women?

Women and mothers were identified as major clients for clothing whereas as the shoes
sellers said that men were mostly the buyers. The reason is obvious that maximum shoes
were sportswear:
 Where do you source your products from?

On this question the sellers were hesitant to answer as they feared competition or legal
problems. On making them comfortable majority of them answered that their wholesalers
were in Addis Ababa. This was not a sufficient answer so we delved further and
questioned to find out that Djibouti, the only port to Ethiopia was the main source of SHC
imports. Some also identified to be sourcing from other towns bordering Kenya, Tanzania
and Sudan:
 What is the criteria for selection of items that you buy from wholesalers?

As quality was a significant mention from the retailers for the consumers we wanted to find
out how the retailers selected their articles form the wholesalers. The retailers pointed out
that good quality products were determined to be reference to durability, variety of fashion
styles, cotton fabric. They also checked if the garments were not very dirty or completely
torn or frayed apart. Such factors were checked only if the bale was unpacked, sometimes as
the bale arrived packed they couldn’t check much but tried to ensure quality from the
wholesaler. A few sellers also said that they buy only the required product category (men,
women, kids and shoes):
 How frequently do you source these items?

The sellers answered that the size and the frequency of the buy depends on the sales in the
market but in general they time of buy ranges from once in two weeks (women and kids),
once every month (men) and once every two months (shoes). We could see that women are
frequent buyers of the SHC in the market.

4.2 Discussions and recommendations

The in-depth study of SHC trade in the west and EAC along with the analysis of survey is
quite convincing about the fact that SHC is a catalyst to economic development and
sustainable consumption in the end of the textile and garment value chain. In this section we
recommend a few ideas which would be very beneficial for SHC trade in Ethiopia and other
under-developing countries.
4.2.1 Organized second-hand clothing retailing in Ethiopia. From the survey, it is evident
that SHC exists in the country and the survey is a proof that Bahir Dar is not the only city for
such kind of trade as the wholesalers in Addis Ababa should be selling to other cities as
well. Banning/illegalization of SHC is not a viable solution to this problem as there is a high
consumer demand. Jonga (2012) stated that vendors were illegal and were harassed by police
and established businessmen in Addis Ababa. Moreover, local politicians and retailers were
not sure of the by-laws or any regulations that controlled such activities in the trade. MTI
(2016a, 2016b)[9] grounded a few fiscal measures for SHC trade in Rwanda and they are
follows:
  Duty increment on SHC: beginning with US$2.5 per kg by December 2016, $4 per kg Retailing in
by July 2017 and $5 per kg by July 2018. Ethiopia
 The introduction of a minimum charge of US$5 for every pair of used shoes
imported into the EAC region.
 Increase domestic production of fabrics and support domestic production of finished
leather.

Similar fiscal policies could be implemented to legalize SHC and earn profits out of the trade
and shall help to promote the local industries simultaneously. The apt thing to do here is to
organize the retailing of SHC and as an example, Kenya is remarkable as it creates 121,000
direct and 27,000 indirect jobs derived from this activity (e.g. tailors, food vendors, security
agents and loaders/unloaders, among others) and is a method of sustaining livelihoods. A
similar organization should be implemented in Ethiopia to enhance employment and ways
of retailing so that the government can monitor the trade and analyze whether it is actually
hampering the local industry.
4.2.2 Small and medium enterprises, women entrepreneurship and second-hand clothing.
Our research founded that the representation of women in the business is almost negligible.
SHC trade lies under the category of small and medium scale enterprises, often small if
individual entrepreneurs are considered. SMÈs constitute a large part of the economy,
dominate the industrial and commercial infrastructure and have significant roles in
economic growth in under-developing countries (Curran and Blackburn, 2000; Tetteh and
Burn, 2001; OECD, 2010). This fact has encouraged governments to push the establishing of
SMÈs in emerging economies. In our survey we found most of the sellers to be men and the
participation of women was very less. In the context of SME’s development women
entrepreneurs is a very sensitive topic for emerging economies (Aidis and Fellow, 1998;
Aidis, 2003; Aidis, 2004; Aidis et al., 2007) and should be encouraged in this trade as well.
Khurana and Ryabchykova (2018) in their study on women entrepreneurs in Ethiopia have
exhibited that the women are diligent with their working profiles and contribute a lot to
economic prosperity to their respective livelihoods. The Government of Ethiopia has setup
various organizations such as Women’s Affairs Department, Women Entrepreneurs’
Association, Women’s entrepreneurship development, Women’s Entrepreneurship
Development and Gender Equality, Women’s Enterprise Promotion Centre, Women in Self
Employment to boost the women potential (Khurana, 2018). There is increasing recognition
regarding the ability of entrepreneurship and SMEs as a conduit for change to sustainable
products and processes (Hall et al., 2010). NBS[10] reports that as sustainable products and
services become more popular, SMEs have an opportunity to gain market share. Moreover
SMÈs are in a much better position to innovate radically and compete successfully in niche
markets compared to much larger companies (Schaltegger and Wagner, 2011) and can
market sustainable products more effectively as they understand consumer needs and
wishes. This particular aspect is visible in our research as well; the vendors communicate
more effectively with consumers and hence source the desired clothing from wholesalers. In
our understanding we see that SMEs and SHC make a great match for socio-economic
development of Ethiopia and women enterprises would add to the success if given a proper
chance and space in the markets.
4.2.3 Second-hand clothing against Chinese products in local markets. This particular
point raises a very intriguing angle to SHC trade in East Africa. The EAC have been
persistent on banning SHC in the markets where as USAID (2017) suggests that in 2017,
two-thirds (67 per cent) of the population with higher income strata purchased new
garments of Chinese origin. Moreover, Chinese exports of ready-made clothes to the EAC
RJTA reached S$1.2 billion in 2016, dwarfing the value of used clothing imports by a factor of four.
Clearly, SHC is not a threat to the local markets in the EAC. Coming to the case of Ethiopian
markets, our survey exhibited that the Chinese goods are of very low quality and the
consumer prefers SHC over Chinese goods due to better material/fabric and design. In terms
of monopolizing the markets as well the Chinese captured the space, SHC still remains in the
shadow of illegal trade. Chinese imports have monopolized the local market as they cost
much less and are of desirable quality than the locally made garments (Khurana, 2018).
While analyzing prices also in Table II, we found that the process were competitive to the
Chinese products and were readily acceptable by the consumers. This poses a direct threat
to the local brands as the consumers are shifting to buy cheap Chinese clothing. Lastly, the
Ethiopian local producers occupy a very bare minimum share of the market as they produce
very less due to challenges such as low availability of raw material and productivity
(Khurana, 2018). So how is justified to believe that SHC is capturing the market or
destroying the local industries. It is indeed visible that SHC is a benefit in disguise
competing against the Chinese imports which are a real threat to the local industries. In an
overall view why should a consumer give their money to bad quality Chinese goods which
are placed at a higher price and it does not help the country either. In our view, we see SHC
as a friend to the economy of Ethiopia in all possible aspects.
4.2.4 Establishing a sustainable value chain and promotion of second-hand clothing.
According to Ayres and Frankl (1998), long-term sustainability of the global economy needs
continuous growth in value added, but reduced consumption. Sustainability could be divided
into three categories namely economic, social and environmental (Adams, 2006; Kumar et al.,
2017) and from Ethiopia’s present situation, social sustainability is the one to be tackled first. In
a recent article (March 2, 2018) by Bloomberg, Ethiopia has been termed as China’s giant fast
fashion factory[11], and it highlights the serious challenges to social sustainability. Staritz et al.
(2016) marked in their research that one of the seven challenges in industrialization would be
social upgrading particularly in terms of working conditions. On the social side international
trade involves resource course issues: human rights violations, poor working conditions, low
wages, threatened food security, displacement of local populations, creating political unrest and
increasing land prices. The fashion industry has begun to tackle some of the challenges by
implementing initiatives; however, it is recognized that these actions are tied to a system rooted
in rising consumerism, which is being confronted with population growth, diminishing natural
resources and climate change. Ethiopia is the second most populated country of Africa with a
population of 105,989,947 according to the latest United Nations estimates[12], and it will not be
long when the country will the rise to fast fashion and mass consumption problems leading to
issues in environmental sustainability. Addis Ababa, the capital of Ethiopia and the diplomatic
center of Africa, is one of the fastest growing cities on the continent and, based on African
Economist Report, the 10th and 16th biggest city in population size and area respectively. With
the current population growth rate of 3.36 per cent, the population size which was 3,365, 000 in
2015 is expected to reach the 5 million mark in 2025 (UN-Habitat, 2008). Environmental
problems due to lack of waste management have started to show its impact on Addis Ababa. In
March 2017, 113 people were killed in the collapse of a mountain on trash at a massive garbage
landfill on the outskirts the city[13]. As massive industrialization has just hit the capital city
soon excessive consumption will show its effects to the life of people. The ecological footprint
[14] of the industry shall increase and will be a concern in the coming future.
After over a decade of slow development, the sustainability paradigm shift has quickly
spread to the mainstream fashion business and heavily influenced fashion brands’ practices
and strategies and is currently transforming the fashion supply chain (Khurana and
Ricchetti, 2016; Ricchetti and Khurana, 2017). It has taken a while for the west to comply
with sustainable consumption and it’s still underway. SHC provides a very convincing Retailing in
outlook to this challenge. Under-developing countries such as Ethiopia can set a platform for Ethiopia
SHC under the cause of social and environmental awareness. Authors (Bonini and
Oppenheim, 2008; Kollmuss and Agyeman, 2002; Thøgersen, 2005; Vermeir and Verbeke,
2006; Williams and Dair, 2007; Beard, 2008; Defra, 2008) show that lack of knowledge, skills,
awareness and consideration in sustainability issues and problems often act as barriers to
spread the message of sustainable consumption. Today, SHC is sold on footpaths or in the
unwanted corners of the cities in the country. The ministry of textile should organize flea
markets to promote the sales of SHC not only for monetary benefits but also to educate the
customers and advertise how SHC consumption is protecting the country from being an
unsustainable economy. In an extension to the idea of flea markets, consumer co-operative
stores[15] are a great idea where the citizens in towns can collect their used clothing to sell or
donate. This shall not only increase social interaction between the conscious consumers but
also create awareness amongst the aspiring consumer. Most essentially this will help people
escape the taboo of being looked down up while using SHC. Ethiopia has just begun mass
producing clothing for the West, and in a short while, the country shall deal with major
sustainability issues in the whole value chain. Therefore, it would be very beneficial to
control the spread of unsustainable practices from producer to consumer in the country.

5. Conclusions
This research has highlighted the relevance of SHC to the Ethiopian fashion and textile
sector and has also set an example for other similar under-developing economies. We see
that SHC has an overall impact on the society and trade and hence we elaborate on three
major areas – social, economic and consumer behavior.

5.1 Economic impact

The fashion and textile sector has been a tool to progress for many countries globally. As
observed, Ethiopia has just begun its way to mass industrialization in textile and fashion
sector and the prime reason for this shift from Asia is cheap labor. Figure 2 exhibits a circle
of textile progress which Ethiopia has just completed. It is fascinating to see how used

Fast Fashion /Mass

market clothing

Developed/Develo
Ethiopia-
ping countries
Producing
(USA, Middle-
economy
East, India, China

Second Hand clothing

Figure 2.
The circle of
clothing trade
Source: Author
RJTA clothing establishes an automatic link with the new clothing. Chinese and foreign imports
impose direct threat to the local brands as the consumers are shifting to buy cheap Chinese
clothing and its quite evident that such a circumstance exists in other Asian, African and
South-American countries. Along with other authors we strongly believe that SHC is an
economic stimulii and opens a new frontier to retailing in the fashion atmosphere. SHC helps
emerging economies grow through import taxes (Table I) and consumer purchases and
hence is quite impactful in economic growth.

5.2 Social impact

It is clear that sustainability will shape the fashion and textile industry in the future due to
its increasing global awareness among the consumer. However, the concerns for under-
developing countries are much higher. On one end they are producing millions of pieces of
clothing and on the other rising economic status of the citizens fuels excessive consumption.
This industrial progress shall contribute in making Ethiopia an unsustainable society in a
span of a decade as the consumer education and awareness is very limited. We believe that
banning of SHC trade to under-developing countries is not a feasible solution as it shall
effect many livelihoods worldwide. Job generation, re-using garments and conscious
consumption are a few essential advantages provided by SHC to the societies.

5.3 The consumer

SHC is still under shadow as the consumer has varied opinions about it across the globe.
The case of Ethiopia provides an interesting angle to this concept and sets an example for
other parallel economies as well. Due to the low income standards of people in various cities
they are accidently becoming a part of a sustainable process which is a blessing in disguise.
Proper channelizing and organization of second hand retailing in the country could actually
help to achieve sustainability from angle of consumption. As stated prevention is better than
cure, a timely measure can make a large difference in the mind-set of the consumer and SHC
shall surely be a catalyst to this prevention.

6. Limitations and further scope of research

As Calabrese et al. (2017) points out that one of the main challenges when working on SHC
trade is the poor availability and quality of official data, and we observed the same. Data
collection was a difficult task as retailers were not ready to share information readily. They
were scared of the legal consequences or loss of business. There are no government
authorities to provide statistics on this area as well. This research is performed in one of the
big cities of Ethiopia but opens a vast field of research as no scientific data is available about
this trade. SHC consumption is one the easiest methods of practicing sustainability locally
and it aids new areas of research such as reusing, recycling and redesigning which are very
new to fashion and textile sector of Ethiopia.

6.1 Further scope of research

This research opens various streams of studies from concept to consumer in SHC business
across the globe. This kind of retailing is in its nascent stages and shall evolve immensely in
the coming decade. We have tried to bring such a concept into light exhibiting its benefits
for emerging economies and its consumers across the globe. We were inspired by successful
practices in this business such as flea markets and thrift shops from European and
American countries which help to promote the concept of circular clothing. It
simultaneously opens a wide for research and implementation in emerging economies where
academia and government organizations can take this task actively to support and benefit Retailing in
from the SHC trade. Ethiopia

7. Declarations
Compliance with ethical standards: The authors have complied with the ethical standards of
the journal.
Conflict of interest: The authors declare that they have no conflict of interest.
Funding: (not applicable).
Availability of data and material: Please contact author for data requests.

Notes
1. www.bsr.org/reports/BSR_Ethiopia_Scoping_Study_HERproject.PDF
2. The African Consumer and Retail, available at: https://assets.kpmg.com/content/dam/kpmg/za/
pdf/African-Consumer-Retail-Report-2016.pdf
3. www.ecowatch.com/fast-fashion-riverblue-2318389169.html
4. www.theguardian.com/sustainable-business/sustainable-fashion-blog/2015/feb/13/second-hand-
clothes-charity-donations-africa
5. www.thebalancesmb.com/exporting-old-clothes-2878008
6. www.theeastafrican.co.ke/oped/comment/Banning-used-clothes-is-not-economics-it-is-idiocy-/
434750-3388404-fc8qaoz/index.html
7. www.citypopulation.de/Ethiopia.html
8. Merkato or Gabea is a local open market place for selling all kinds of daily-use products.
9. MTI Document- https://d3n8a8pro7vhmx.cloudfront.net/eatradehub/pages/145/attachments/
original/1471960665/Rwanda_AGOA_Action_Plan.pdf?1471960665
10. https://nbs.net/p/smes-the-marketing-challenge-cd861b51-716e-4976-86dc-0df3a02008e5
11. www.bloomberg.com/news/features/2018-03-02/china-is-turning-ethiopia-into-a-giant-fast-
fashion-factory
12. www.worldometers.info/world-population/ethiopia-population/
13. www.cbsnews.com/news/ethiopia-garbage-dump-collapse-rising-death-toll/
14. The ecological footprint is a measure of human demand on the Earth’s ecosystems, the amount of
natural capital used each year (Footprintnetwork.com).
15. These are businesses owned and run by consumers with the aim of providing essentials at
reasonable cost as compared to market rates.

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Further reading
Johansson, A. (2013), “Second hand-the MeWe generation as a driving force”, available at: http://bada.
hb.se/handle/2320/12254
Malhotra, N., Shaw, M.R., et al. (1996), Marketing Research: An Applied Orientation, Prentice Hall,
Sydney.

Corresponding author
Karan Khurana can be contacted at: khurana101karan@gmail.com

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