The circular economy offers secondary market growth path

A new report from environmental NGO WRAP and OC&C Strategy Consultants highlights the rise of circular business models, driven by their resilience and ability to strengthen customer loyalty. A global move toward circular living is transforming sustainability from a moral imperative into a strategic business opportunity. The linear take-make-dispose model is gradually being replaced by a circular design-make-reuse system, aiming to drastically cut emissions and decouple economic value from raw material consumption.

Circularity drives commercial value

Businesses adopting circular principles benefit from multiple advantages. These include revenue growth through new service models and customer segments, cost savings via supply chain efficiency, and competitive edge by leading system transformation. Additionally, circularity enhances supply chain resilience and helps meet regulatory and environmental goals.

Consumer demand fuels second-hand and used surge

Consumer behavior shows strong engagement with circular activities. About 75% of consumers have sold second-hand goods, while 70% have made second-hand purchases. The most common drivers are affordability and convenience, with 55% choosing pre-owned items for cost reasons and 38% selling to earn extra income. Barriers include lack of access and inconvenience.

Business adoption of circular models grows

While business awareness of circularity is high, adoption remains nascent. That said, investment interest is accelerating. Financial investments in the circular economy grew by 42% from 2022 to 2023, with £ 76.8 billion in global impact investments by the end of 2023. Since 2010, circular sectors have shown 1.2% more annual value growth than linear industries.

Revenue from refurbishment and resale

Secondary market players stand to benefit from four primary value drivers: new revenue streams, expanded customer segments, improved loyalty and retention, and cost efficiencies. Apple iPhones, for example, retain 70% to 80% of their original value, while mainstream clothing averages between 45% and 65%.

Currys carried out 1.4 million device repairs in FY23/24, while IKEA is reengineering furniture for easy part replacement. Third-party enablers such as Foxway in electronics and ACS in fashion offer scalable refurbishment infrastructure.

Rental and product-as-a-service gain traction

Rental and service-based models provide recurring revenues and stronger customer relationships. These are particularly effective for high-value or low-use products like B2B tech, fashion, or bicycles. Companies like Philips and Bike Club are seeing success with these circular access models.

Circularity is a business imperative

Circular initiatives are no longer confined to CSR departments. They are a core strategic lever for growth and resilience. From resale and repair to rental and refurbishment, businesses that embrace circularity can unlock new value, reduce waste and emissions, and future-proof their operations. Collaboration across the value chain will be essential to scale impact.