The invitation came eight years ago. Dutchman Thomas Plantenga lived comfortably in New York after selling his start-up“and I had nothing to do.” Until the investors of another company he had founded remembered that he could be the ideal person to save a small start-up Lithuanian company that was on the verge of bankruptcy. “They told me: ‘It’s called Vinted, it sells second-hand clothes, can you help them?’ And I said ‘no way! I want to relax, go skating.’” But Thomas Plantenga ended up meeting Vinted. And there it remained until today. Last year, the company turned a profit for the first time.

The first visit lasted five weeks, Vinted’s CEO tells Observador, in an interview conducted within the framework of Thomas Plantenga’s presence at the Web Summit. “I heard their stories, how they grew up in Lithuania, which was liberated from the Soviet Union, how they built their first businesses and I thought ‘wow, these people are really smart.’ I’m going to visit them for a few weeks and try to help them.’”

Without a contract or formal link to Vinted, he helped design and implement an “aggressive” restructuring plan for the company, which involved laying off half of the employees, closing several offices and centralizing engineering and customer services in Lithuania. Basically, “change the company’s business model and its way of working.” The other side got the green light. And the plan paid off. “I liked it a lot and they told me that I had to lead the company. I only had one suitcase for five weeks.” Only after a year and a half in Vilnius did he return to his base, in New York, to take the final step.

Vinted is today the main second-hand clothing sales application in Europe. It is present in 20 countries and also in the United States, but in this market its presence is almost insignificant, admits Plantenga. “It’s very different. We tried several times at first, we tried in 2018, then I think again in 2022, but none of the attempts were successful. So we focus on Europe. Maybe in the future, in 2026 or 2027.” Entering the North American market is much more difficult, he admits, although he doesn’t know exactly why. “If I knew we would be big in the United States. Let’s keep trying.”

In Europe, business has been changing. Vinted is no longer exclusively a second-hand clothing sales platform. Now that the company has turned a profit, the Lithuanian unicorn has begun to explore other directions. “We use the profits and our income to invest in other categories, such as luxury checks,” explains Thomas Plantenga. The service was created this year and requires users who want to sell items from brands considered luxury, such as handbags or shoes, to send the products to Vinted verification centers. Currently there are only two, in Hamburg, Germany, and in London. And it is not in the company’s plans to open another one until at least the next 12 months. “If we centralize it, it’s cheaper.”

Investing in the second-hand luxury segment was a process of trial and error. “We had tried it before and had never been successful.” Currently, Plantenga states, the segment of items that cost more than 500 euros is the one that is growing the most. The ‘leap’ occurred with the purchase of the German second-hand fashion sales platform Rebelle, “which had authenticity checkers.” “We were simply a technology-focused company, we thought we could enter the luxury market with just AI machines and controls. Then we realized that’s not how it works. “We acquired Rebelle and provided the authentication service at a very low cost.”

Recently, verification centers have received more than just Louis Vuitton or Chanel handbags to verify. Vinted has expanded the service to electronic products, which must also be inspected by central services. The option arrived in Portugal this week. “It is one of the first countries where we are carrying out tests. If it goes well, we will move on to others.”

“But this is just one of our companies,” explained Thomas Plantenga. They are not available here yet, but Vinted has already developed other services in addition to the second-hand clothing sales platform. “We are currently investing in a shipping company (shipment) and in a payments company,” he reveals. “In the Netherlands, Belgium and France we already work entirely with our transport company. We have lockers, warehouses, everything. What we are trying to do is create a locker-based business where people can pick up the items they ordered. “We want our CO2 footprint to be as low as possible and our shipping prices to be as low as possible. And so people will be able to trade more low-value items. If the shipping price goes down, the likelihood of selling an item cheap increases.”

In addition to the transportation company, Vinted is also investing in the development of its own payment service. Currently, you must use a third-party solution to process a payment on the platform. Regarding whether any of these options will reach Portugal, Thomas Plantenga limits himself to saying “maybe.”

“We are subsidizing the Portuguese market”

Vinted does not publish results by country or user data. It is known that in 2023 it generated profits of 17.8 million euros, which compares to the losses of 20.4 million euros the previous year. But the CEO does not give more details about, for example, which markets are most valuable to the platform – he only says that France and the United Kingdom are very large – or how much Portugal is worth in Vinted’s closet. But he guarantees that he knows the Portuguese market well.

“It is a great market. And recently, we gave you a hand. “We are subsidizing you,” he says, referring to the fact that, since mid-September, Vinted has not charged shipping costs for purchases in Portugal. Whoever buys on the platform, in addition to the cost of the product, pays a buyer protection fee, absorbed by Vinted and which consists of a fixed amount of €0.70 to which is added 5% of the price of the item, plus shipping costs. costs, which depend on the size of the order and the destination. “We are helping you” with free shipping, he insists. And why? “We are always testing,” he responds. “We’re always trying to figure out how we can give users the best experience possible. And from time to time we subsidize shipping, check the sales growth and see what to do with it.”

Most of Vinted’s income comes precisely from the commission charged for each transaction. However, this is also the portion that has a lower gross margin, because it is the one that finances the costs of payments, shipping and buyer protection, explains the general director. Another part of the income comes from the promotion functionality of the cupboardthat is, the clothing items that the user has for sale. Here, upon checkout, users can see their pieces appear more frequently or more prominently on feed of those looking to buy, to sell faster. “We have a good profit margin here.” Vinted also earns advertising revenue.

The outsourcing of shipments, which in Portugal is carried out through companies such as CTT, InPost and DPD, “often causes us to lose money,” he says. “We constantly work with these companies to try to reduce prices” for shipments and “accelerate the market.”

Portuguese Vinted users can currently transact with other users in Spain, Italy, France and the Netherlands. Germany should soon join that list, the CEO reveals to the Observer. “Germany never worked for us. But now we are improving the service in Germany and we are also expanding the international service there. In fact, I think it only became available last week. And for the first time the German market is linked to other markets. This means it could also be linked to Portugal.”

Distance, but not only that, defines how many markets each country is connected to on the platform, explains Plantenga. In the case of Portugal, it would not make sense, for example, to make shipments to and from the Nordic countries, despite the fact that the objective is for each country “to have access to more stock.” “For us, distance is important to create routes,” he says. These routes are defined by the parcel companies. “The price must be attractive. “If it is too high, there is no point in trading over such a long distance.” In the case of the United Kingdom, for example, customs duties are also a barrier.

The “quackery” about AI is “even greater” than its potential

It was the dominant topic at the Web Summit and Thomas Plantenga also expressed his opinion. The potential of artificial intelligence (AI) is “huge,” he acknowledges, “but the level of quackery about AI is even greater,” he argues. “It’s incredible, it’s going to change the world, we’re all going to be rich,” he says ironically. Vinted has used tools like predictive statistics “for many years” – “they called it machine learningnow they call it AI,” when, for example, the platform presents recommendations based on previously viewed articles.

“The acceleration we see now with OpenAI helps open up and accelerate cost reduction and, perhaps, there are other things that are going better. But it is not the center of our work. When we see that it could be useful, we use AI. When it is not useful, we do not use it. We don’t talk about it much, just like we don’t talk about the fact that we use data analytics. People talk about this a lot now because if investors believe that AI is going to change the game, the company gets a higher valuation. We don’t do this because we want to be honest. Yes, it is something that really helps certain areas. In others, it is just another technology.”

One of the areas where Vinted uses AI is to detect sales fraud. “You can’t imagine how many people we have working to keep Vinted safe. We track people’s behavior on what they sell, when they put items on sale, what language they sell them in, and that way we try to filter the robots and fraud. And when a fraudulent deal is completed, the buyer needs to confirm that the item has arrived,” and if it hasn’t arrived, the seller doesn’t receive the money. “Scammers use AI to scam, we use it to chase them.” The rate of attempted fraud is “high,” admits the CEO of Vinted. But the effective fraud rate is “very low.” “If it was high, we would be bankrupt.”

The directive that forces users to declare their income to the tax authorities is “unfair”

Since the beginning of this year, due to the transposition of the European DAC7 directive, anyone who exceeds 30 transactions per year or two thousand euros in sales on Vinted is obliged to declare their profits to the tax authorities. A measure that Thomas Plantenga considers “unfair” and “poorly constructed.”

The entry into force of the measure forced companies like Vinted to inform the tax authorities of “a very high number of users, when in reality there are very few who must pay taxes.” In the case of Vinted, the CEO estimates that “0.001%” of users are covered, by exceeding the determined sales limits. The problem, he explains, is that all users must be alerted. And that generates distrust.

“Every time we tell people that we need to have their data because we have to hand it over to the authorities, everyone asks ‘but will we have to pay taxes?’ And then we have to explain that no.” It only applies to users (usually companies) who sell things to make a profit, he stresses. “And most people sell their items for less than they paid for them. You are losing. You won’t have to pay taxes. We had to invest a lot of time and effort to explain this to users.” The CEO recognizes the “good intentions” of the regulation, but emphasizes that “it is not helping” companies. “They could have created a better measure.”

For Thomas Plantenga, there are three things that make people want to buy second-hand clothes: “the price, the feeling of not wasting and the joy of a good find.” On the day of the interview with El Observador, all the clothes the CEO was wearing had been purchased at Vinted, except for the T-shirt and socks.