HOW MARKETS MEET
CONSUMER DEMAND:
SECONDHAND CLOTHING IN EL SALVADOR

This report explores how the secondhand clothing market in El Salvador has evolved into a vital economic lifeline, effectively helping families cope with rising costs and limited budgets. The country faces significant financial challenges, including a post-pandemic inflation spike to 7.25 percent and a labor market where nearly two-thirds of the population relies on informal work. These pressures have made purchasing new clothes increasingly difficult, driving a major shift in consumer habits. Between 2019 and 2023, imports of new apparel dropped by 32 percent, while the market share for used clothing grew to account for nearly one-third of all clothing imports. This shift is driven by a stark difference in affordability: on average, new clothes cost more than four times as much as secondhand options.

To meet the growing demand for used clothing, the industry has built a highly organized supply chain that relies almost entirely on goods from the United States, which provides over 96 percent of the country’s used clothing. The report details how local businesses have streamlined their operations to keep prices stable. Rather than relying on middlemen, many importers own their own sorting warehouses and retail stores. In these facilities, workers use a careful two-step sorting process to grade garments by quality and style. This ensures that every item is categorized correctly before it reaches the store shelves, allowing businesses to manage their inventory efficiently and keep costs down for the consumer.

The findings highlight just how accessible this market is for the average household. An analysis of over 21 million items reveals that 99.56 percent of the clothing is sold for under US$15, with the most common price tag being just US$3. The market is also highly adaptable to where people live; for example, average prices are significantly lower in the Western region compared to the wealthier Central region, ensuring clothes remain affordable even in lower-income areas. At the same time, a small, specialized online market has emerged for shoppers seeking premium, “like-new” brand-name items, demonstrating that the sector can serve diverse needs while maintaining its core focus on affordability.

 

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