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Young people who fall in love with "old things" push the second-hand market, and the transaction scale of e-commerce platforms increased by 20% last year

author:Blue Whale Finance
Young people who fall in love with "old things" push the second-hand market, and the transaction scale of e-commerce platforms increased by 20% last year

Image source: Tuworm Creative

Recently, Xianyu announced a set of data, its number of users has now exceeded 500 million, the release scale is nearly 100 million, and the number of online goods has exceeded 1 billion.

On the other hand, in the first quarter of 2023, the total revenue of Aihuishou reached 2.87 billion yuan, a year-on-year increase of 30.2%; Non-GAAP net profit was 50.11 million yuan, achieving operating profit for three consecutive quarters.

At present, the domestic second-hand e-commerce industry is divided into comprehensive second-hand e-commerce represented by idle fish and zhuanzhuan, as well as vertical second-hand e-commerce such as Aihuihui, Kongfu Subnet, and Guazi Second-hand Car. From the data performance, the second-hand e-commerce market is in a period of change, especially the head platforms represented by idle fish, zhuanzhuan, love recycling, etc. are accelerating the breakthrough in the change.

In 2025, the transaction of idle items may exceed 3 trillion yuan

According to the "2021 China Idle Second-hand Transaction Carbon Emission Reduction Report" (hereinafter referred to as the "Report") released by the Institute of Energy, Environment and Economics of Tsinghua University and other institutions, the domestic second-hand consumer market has exceeded one trillion yuan in 2020, and it is expected that China's idle goods trading is expected to exceed 3 trillion yuan by 2025.

According to the "Dianshubao" e-commerce big database, the scale of second-hand e-commerce transactions in 2022 will reach 480.204 billion yuan, a year-on-year increase of 20%.

From the perspective of regional distribution, second-hand e-commerce in Beijing mainly includes Zhuanzhuan, Paipai Yanxuan, Red Bulin, Pollen, Confucius Used Books Network, Reading Neighbors, Catching More Fish, Heart, and Fat Tiger; There are idle fish in Zhejiang; In Shanghai, there are whale sales, enjoy things, love recycling, patting hall, have to sell, panda lattice, concubine fish, bean fish luxury products; In Guangdong, there are beautiful machines, flash recycling, recycling treasure, exchange and recycling; There is a road network in Jiangsu.

Young people who fall in love with "old things" push the second-hand market, and the transaction scale of e-commerce platforms increased by 20% last year

2015-2016 is the peak of industry development, and this stage is also the birth period of industry leaders. In 2014, Taobao second-hand renamed Xianyu APP was officially launched, creating a comprehensive platform for second-hand trading in the C2C model; In 2015, 58.com second-hand announced the upgrade to the transfer APP and officially launched, and in the same year, vertical second-hand e-commerce such as Red Bulin and Find Liangji were also established one after another.

Data show that in 2015, the number of second-hand e-commerce enterprises financing reached 50. This also led to the peak growth rate of second-hand e-commerce transactions in 2016, with a growth rate of 669.49% and a market size of about 35.32 billion yuan. In the following years, the growth rate of market size declined significantly, and the pace of financing slowed down.

Young people who fall in love with "old things" push the second-hand market, and the transaction scale of e-commerce platforms increased by 20% last year

Analysys believes that from 2016 to 2019, second-hand e-commerce showed a trend of capital cooling, industry normative issues, economic cycles and financing environment challenges, second-hand e-commerce platforms faced the pressure of expanding business boundaries and transformation and upgrading.

In 2021, the "14th Five-Year Plan" proposes to encourage and support the development of the "Internet + second-hand" model, encourage platform enterprises to introduce third-party second-hand goods professional merchants, and require clear industry standards and standardized transaction behavior. Second-hand e-commerce platforms have become an important test point for carbon double reduction, and their development has turned around. In the same year, All Things New Life (Love Recycling) was listed on the New York Stock Exchange.

For the whole year of 2022, the total revenue of Wanwu Xinsheng increased by 26.9% year-on-year to 9.87 billion yuan, non-GAAP operating profit was 6.9 million yuan, and non-GAAP net profit was 50.84 million yuan, achieving non-GAAP level full-year profit for the first time. According to the financial report, this is mainly due to the increase in sales of second-hand consumer electronics products in Aihuishou online and offline channels. In 2022, the platform's annual second-hand commodity trading volume reached 32 million.

In addition to policy incentives, the psychological transformation of young consumers, coupled with the rise of interest e-commerce driven by short videos, has added fuel to the development of second-hand e-commerce. At present, Kuaishou and Douyin have joined the second-hand e-commerce live broadcast track, and many head players such as Red Bulin, Fat Tiger, and Feiyu have entered Douyin Live Broadcast, and the idle luxury trading platform Feiyu has also settled in Kuaishou.

More than half of consumers are willing to buy second-hand electronics, and young people who are keen to save money have become the main force of "second-hand"

Analysys data shows that from the perspective of user age, people under the age of 35 are the main users of second-hand e-commerce, and the attitude of post-80s and 90s to commodity consumption is not only concerned about cost performance, but also willing to enjoy advanced consumption, which is the mainstream group of consumption upgrades, and Generation Z is also a potential user group for second-hand e-commerce in the future.

Young people who fall in love with "old things" push the second-hand market, and the transaction scale of e-commerce platforms increased by 20% last year

From the perspective of user consumption capacity, high-consumption, medium-high consumption, and middle-level consumers account for four-fifths, and such groups have the pursuit of quality of life, and the residual value of idle goods generated by high-quality consumption habits is greater, so it is easier to choose second-hand transactions when product iteration.

Li Jun (pseudonym), an old user of idle fish after the 90s, told reporters that she mainly sells things on second-hand platforms and helps herself recover blood through the residual value of goods. At first, when she used idle fish, she was more assured because she had a performance ticket that she had too late to participate in to deal with, and the platform had a specific process to help supervise, and the ticket needed to be present to confirm the receipt.

Since then, she has been accustomed to selling her unused items, and when she "breaks away", she will sell clothes with a certain brand value, which can not only promote the circulation of resources, but also save herself a sum of money.

From the buyer's point of view, the consumption concept of saving money, simplicity and sharing is also more in line with the consumption concept of contemporary young people.

Jin Jiayi, senior analyst of the retail social service industry of Toubao Research Institute, analyzed to reporters that contemporary young people are more concerned about cost performance, compared with brand new goods, second-hand goods undoubtedly have a huge advantage in price, and well-maintained second-hand goods are not inferior in quality. In addition to economic value, second-hand goods also have a "sense of history" and "sense of story" that distinguish them from ordinary goods. The mainland second-hand market is relatively more concentrated online, and for young people, the convenience of e-commerce is incomparable.

According to the survey data of the "2022 Low Carbon Society Insight Report", more than 70% of people said they were willing to hand over old electronic products to special institutions or channels for recycling, and more than 55% said they were willing to buy second-hand electronic products.

The report believes that the public's consumer demand for mobile phones and other electronic products has changed to high-frequency, high-quality consumption, and the rapid growth of waste and idle electronic products will cause a greater environmental burden, and effective recycling will greatly reduce carbon emissions.

Li Jun said that although he rarely buys things on second-hand platforms, he will consider buying electronic products such as projectors in the second-hand market. Because the price is relatively cheap, and the quality problem is generally not big.

However, there are hidden dangers in the trading of second-hand goods, such as mismatched goods, shoddy charging, selling counterfeit goods, and lack of platform supervision.

In the future, the industry needs to focus on solving problems such as service standardization and fraud

According to the cases of user rights protection accepted by "Tele-v. Bao", refund issues, product quality, online fraud, online counterfeit sales, wrong goods, after-sales service, overlord clauses, difficulty in returning and replacing goods, freezing merchant funds, customer service problems, etc. are the main problems of second-hand e-commerce complaints in 2022.

Among them, complaints about refund problems accounted for 22.08%, product quality complaints accounted for 14.61%, and online fraud complaints accounted for 11.04%, ranking the top three respectively.

Young people who fall in love with "old things" push the second-hand market, and the transaction scale of e-commerce platforms increased by 20% last year

First of all, from the perspective of refund issues, because the quality of second-hand e-commerce is difficult to judge, sellers and buyers often have their own words, and it is difficult to judge which is the dilemma. On April 15, Mr. Liu of Zhejiang Province complained to "Telegram Bao" that he purchased Coach bags and Tissot watches from the Red Bulin platform on April 13, and after receiving the goods, the goods were not on the right board, the bag smelled of leather, the size of the watch was incorrect, the picture description was for men, but the actual women could not wear them, and the platform did not support returns on the grounds of second-hand goods, and refused to return and refund requests.

Behind the demand for refunds is often related to the quality of goods, second-hand items have been used, there is a certain depreciation, so it is not as good as new in terms of quality. But how to determine when this quality problem appeared has become a problem. Li Jun told reporters that he once bought a ukulele on the platform that claimed to be directly from the manufacturer, but after arriving home, he found that the quality of the musical instrument was very poor, and it broke in a few days, and carefully checked the sending address and found that it was not directly sold by the manufacturer.

The third issue of online fraud needs to be particularly careful, especially luxury e-commerce often involves the sale of counterfeits, fraud and other issues, often appear to be fake. Mr. Guo from Henan Province once reported to "Telegram Bao" that on July 18, 2020, he purchased a pair of Bluetooth headsets worth 838 yuan at the Lookup Machine, and did not use sending them back to the platform for recycling, and was told that the headphones he sold were fake and would not be recycled.

Jin Jiayi pointed out that the risk of uneven product quality on the platform and imperfect user credit system is based on the low entry threshold of some second-hand platforms, users only need to register according to a simple process to open the online store to release goods, coupled with some second-hand platform review is not strict, sellers hang sheep's heads to sell dog meat, play edge balls, old to fill new and other events emerge one after another. For the platform, strengthen the improvement of the credit system for registered users, achieve real-name transactions, and make transactions more open and transparent.

Starting from June 6, "Xianyu" will charge a service fee for specific sellers. According to the notice, the charging policy is mainly for sellers who carry out high-frequency and high-value transactions on the platform, and the charging threshold is that the number of orders in the month is greater than 10 and the cumulative transaction amount is greater than 10,000 yuan, and a service fee of 1% is charged. Continued free for other sellers and all buyers.

Zhang Yi, CEO of iMedia Consulting, pointed out that the second-hand platform relies solely on C-end sellers as the main force, and there are certain problems with sustainability. From the perspective of the platform, professional sellers are the future trend, and the platform should fully consider and accept the feedback of the market and actively explore its own suitable business model.

Jin Jiayi reminded that in the Internet era, the relationship between users and platforms is a two-way choice, and if the price of the services provided by the platform is "too high", it may also cause some users to switch to other competitors. In the process of implementation, the policy needs to take into account the actual situation and needs of the majority of sellers, as well as balance the interests between the platform and users.

However, this move does release a signal of "standardization" in the industry, and the previously too low threshold has led to the proliferation of many informal sellers, professional sellers selling fakes, untimely after-sales service and other chaos frequently. The regulation of professional sellers is conducive to healthy and continuous operation, and has limited impact on ordinary individual sellers.