(Report Producer/Author: Everbright Securities, Tang Jiarui)
. Multiple business models coexist, and second-hand e-commerce enters the fast lane. 1.1. The platform flourishes and enters a period of rapid development.
Second-hand e-commerce is different from first-hand e-commerce. An online trading platform provided for "transactions that are not the first change of hands". The essence of second-hand transactions is to obtain the idle economic value of commodities through the secondary circulation of commodities, thereby maximizing the utilization rate of commodity value. From the perspective of transaction methods, second-hand e-commerce platforms generally include second-hand sales, second-hand replacement, second-hand recycling and second-hand donation. In terms of product categories, second-hand e-commerce platforms cover almost all consumer categories such as electronic products, books, and daily necessities.
The domestic second-hand e-commerce industry has entered a period of rapid development. In recent years, the domestic second-hand e-commerce track has developed rapidly and become more mature. According to the application maturity (AMC) model of Analysys Think Tank , China's second-hand e-commerce market can be divided into four stages, namely: exploration period, market launch period, rapid development period and application maturity period.
1) Exploration period (2002-2017): The birth of second-hand e-commerce initially took the opportunity of offline second-hand transactions to seek online development. In 2002, China’s first second-hand e-commerce website C2C platform Confucius Used Books Network was established, mainly Used for second-hand book trading, it marks that domestic second-hand e-commerce has officially entered the exploration stage. Subsequently, comprehensive trading platforms emerged, with Xianyu established in 2014 and Zhuanzhuan successfully launched in 2016. At the same time, vertical e-commerce platforms such as Hongbulin (second-hand fashion luxury goods, established in 2015), flash recycling (second-hand electronic products, established in 2016), and Yuelin (second-hand books, established in 2017) have been established one after another. China The second-hand market is gradually showing a situation where a hundred schools of thought are contending.
2) Market launch period (2018-2020): In 2018, operating pain points such as falsehoods and shoddy products and information asymmetry in the second-hand e-commerce industry began to emerge. Investment and financing in the capital market first encountered bottlenecks. Second-hand e-commerce entered a wave of mergers. In 2019, Paipai merged with Aihuishou and began to explore the development of the C2B2C model; in 2020, Zhuanzhuan merged with to find beautiful machines and . At this stage, the mainstream model in the industry is C2B2C and C2C in parallel.
3) Rapid Development Period (2021-2025): In 2021, second-hand e-commerce financing such as Zhuanzhuan will pick up. According to statistics from the big data platform "Dian Shu Bao" of the Internet Economic Society, the financing amount of the second-hand e-commerce industry in the first half of the year exceeded 5.75 billion yuan ( (excluding the second-hand car market); in June of the same year, Wanshixinsheng was listed on the New York Stock Exchange; in July, the "14th Five-Year Plan for Circular Economy Development" (proposed to standardize the development of the second-hand commodity market and encourage the development of "Internet + second-hand" Model) and other relevant policies that are beneficial to second-hand transactions have been introduced one after another, and the domestic second-hand e-commerce industry has ushered in rapid development opportunities.
4) Application maturity period (after 2026): According to the forecast of Analysys Think Tank, the competition pattern of the second-hand e-commerce market in 2026 may be basically determined (the three major platforms of Xianyu, Zhuanzhuan, and Wanxinsheng dominate the market, and leading companies in each vertical field will occupy the land for intensive cultivation. ), the platform enters the application maturity stage.
1.2. The business models are mainly C2C and C2B2C.
From the perspective of business models, there are currently five second-hand transaction methods in my country: B2C, C2B, B2B, C2C and C2B2C. Among them, second-hand e-commerce platforms are mainly C2C, C2B2C or a combination of the two models, and offline second-hand platforms are mainly B2C. In the C2C model, the platform serves as a carrier of information and transactions, and individual sellers sell goods to individual buyers to complete transactions. Most of those that adopt the C2C business model are comprehensive platforms, which generally do not participate in the transaction process between users, nor provide quality inspection and logistics services for goods. They mainly provide a trading platform for buyers and sellers to ensure the smooth progress of transactions.
Typical platforms include: comprehensive second-hand e-commerce Xianyu, Quxiangwu, etc. The C2B2C model refers to an enterprise that collects goods from individual sellers through the platform, and then sells them to individual buyers again after identification, processing, and reprocessing. It provides credit guarantee for the transaction and provides after-sales services for the goods. Typical platforms include: comprehensive second-hand e-commerce Xianyu and Zhuanzhuan, second-hand luxury e-commerce Fat Tiger , second-hand fashion e-commerce Hongbulin, second-hand 3C e-commerce Paipai, etc.Under the B2C model, second-hand merchants purchase idle items from users, process the goods to a certain extent and resell them to C-end buyers at a higher price. In this type of model, the supply of goods is relatively opaque. Typical platforms include: second-hand 3C e-commerce platforms Caihuoxia, Paijitang, etc.
C2C model, second-hand e-commerce is a platform that provides commodity transactions and credit protection for buyers and sellers. The platform is an asset-light model and is more suitable for the transfer of non-standard products. C-side sellers publish product information on the platform, and the platform is responsible for promoting and matching transactions between buyers and sellers. After the buyer and seller reach an agreement on the product price, quality, after-sales, etc., the C-end buyer pays the platform for the goods, and the seller mails the goods by himself, and the platform keeps the payment for the goods; after the buyer confirms receipt, the payment for the goods is transferred from the platform to the seller, and the platform Commissions or fees are charged in the process. In the C2C model, buyers and sellers directly negotiate transactions, and transactions are relatively flexible; although the platform provides certain credit protection for the transaction process between buyers and sellers, the seller is still responsible for product quality assurance, so there is a certain degree of credit problems. C2C platforms often emphasize social interaction Attributes reduce consumer distrust by strengthening communication between buyers and sellers. It is usually suitable for the purchase and sale of non-standard products such as niche commodities, clothing and books. Under the
C2B2C model, as a second-hand e-commerce platform that undertakes transactions, it provides additional services to solve product quality problems. Compared with first-hand e-commerce, the problem of information asymmetry in second-hand e-commerce is more serious, resulting in the phenomenon of "bad money drives out good money": only sellers know the true quality of second-hand goods, and buyers only know limited information about second-hand goods. , will tend to choose sellers with lower quotes, because sellers with defective goods (valued lower than the price) will be more eager to get rid of the goods, so the price of the goods will continue to decrease, resulting in high-quality sellers constantly being eliminated and inferior sellers constantly entering the market. Consumers' trust in sellers subsequently declined, eventually causing the entire market to stagnate.
The information asymmetry problem in second-hand transactions gave rise to the C2B2C model. Under this model, the platform is not only a medium for buyers and sellers to trade goods, but also provides additional services such as value-added, technology, and operations. Among them, value-added services include audit and appraisal, maintenance and renovation, etc., technical services include algorithmic pricing, digital operations, etc., and operational services include after-sales guarantee, introduction of certification, etc. The platform standardizes non-standard products through quality inspection, evaluation and pricing of goods, thereby ensuring product quality and enhancing consumer trust. The corresponding C2B2C model has higher requirements on the platform's own technical strength, supply chain efficiency, and service capabilities.
1.3. The trend of younger users is prominent, and the sinking market needs to be developed
The consumer group is showing a younger trend, with a large proportion of users in first-tier cities. From an age perspective: According to QuestMobile statistics, in May 2021, the post-90s generation accounted for about 40% of the transaction users of the second-hand e-commerce platforms Xianyu and Zhuanzhuan, which is significantly higher than other age groups. Although users born after 2000 account for less than 20%, their attention (TGI) to second-hand idle trading platforms exceeds 130. (TGI higher than 100 means that the level of concern about certain types of issues is higher than the overall level) is higher than that of other age groups. layer. This shows that young people are more receptive to second-hand transactions. As the purchasing power of post-2000 users continues to increase, it may provide new users for the second-hand e-commerce platform. From the perspective of urban distribution, the total proportion of first-tier city users of Xianyu and Zhuanzhuan is 30.8%/27.2% respectively. Users in high-tier cities are more concerned about second-hand e-commerce. Users in fourth-tier and below cities have a TGI of less than 100 , users in lower-tier markets need to pay more attention to second-hand e-commerce.
. With the help of circular economy, the GMV of the second-hand e-commerce industry is expected to exceed 400 billion
2.1. Build a circular economic system and tap the trillions of idle market
The rise of the idle economy will provide driving force for the rapid development of second-hand e-commerce. Idle economy refers to the behavior of users conducting transactions in the second-hand market, replacing idle items, extending the use value of goods within a limited life cycle, thereby maximizing the efficiency of use of goods.From 2014 to 2020, the size of my country's idle market increased from 132.82 billion yuan to 1.052 billion yuan, with a CAGR=41.2%, of which the year-on-year growth rate in 2020 was 19.1%.
From the perspective of transaction scale, the penetration rate of and in second-hand e-commerce continues to increase, and the transaction scale of second-hand e-commerce in 2021 is expected to exceed the 400 billion mark. According to iiMedia Consulting statistics, between 2015 and 2020, the scale of my country’s second-hand e-commerce transactions increased from 4.59 billion yuan to 374.55 billion yuan, with a CAGR=141.2%. In 2020, the transaction scale of the second-hand e-commerce industry increased by 44.2% year-on-year; During the same period, the penetration rate of second-hand e-commerce in the idle market increased from 2.2% to 35.6%, an increase of 33.4pct, of which the penetration rate in 2020 increased by 6.2pct compared with 2019. In the first half of 2021, the GMV of the second-hand e-commerce industry continued to grow, with the industry transaction scale reaching approximately 186.65 billion yuan. According to estimates from NetEco, the scale of second-hand e-commerce transactions is expected to reach 400.17 billion yuan by the end of 2021, a year-on-year increase of 29.3%.
From the perspective of user scale, the number of users of second-hand e-commerce platforms is growing steadily, and is expected to exceed 200 million in 2021. The number of online shopping users reached 780 million in 2020, an increase of 140 million from June 2019. The growth rate in 2020 was 22.6% compared with June 2019. Among them, the number of users in the second-hand e-commerce industry was 182 million, a year-on-year increase 26.39%, accounting for 23.3% of the online shopping users, an increase of 5.7pct compared with 2018. The user penetration rate of the second-hand e-commerce industry continues to increase. According to estimates from NetEco, the number of second-hand e-commerce users is expected to grow to 220 million in 2021, a year-on-year increase of 22.5%.
Policies are favorable to accelerate the construction of a circular economic system. Circular economy refers to a resource recycling economy, which emphasizes harmony with the environment, is characterized by resource conservation and recycling, and follows the "3R" principle of "reduce, reuse, and recycle". Among them: 1) Reduction belongs to the input side, aiming to reduce the amount of materials entering the production and consumption process; 2) Reuse belongs to the process, aiming to extend the time of products and services; 3) Recycling belongs to the output side, aiming to reduce the Waste is recycled to reduce final disposal. After the 1990s, the development of circular economy has become a major trend in the international community. my country has also proposed the development of "circular economy", and its strategic status has been continuously improved in more than 30 years of development.
In July 2021, the National Development and Reform Commission issued the "14th Five-Year Plan for Circular Economy Development Plan", which aims to develop a circular economy, improve resource utilization efficiency and the level of renewable resource utilization, and proposes to regulate the development of the second-hand commodity market. Improve second-hand commodity circulation regulations, establish and improve standards for the identification, evaluation, and grading of second-hand commodities such as vehicles, home appliances, and mobile phones, and standardize the circulation order and transaction behavior of second-hand commodities. At the same time, encourage the development of the "Internet + second-hand" model and promote the standardized construction and operation of offline physical second-hand markets. Second-hand transactions can recreate the residual value of commodities. From an economic point of view, second-hand commodities still have a certain usable value. Using the high efficiency advantages of second-hand e-commerce for second-hand transactions can better leverage the economic benefits brought by idle commodities. In order to control the consumption and waste of resources, it meets the development requirements of circular economy.
2.2. Entering the third era of consumption, the rise of Generation Z provides new blood
China has entered the third era of consumption. Comparing the four consumption eras that Japan has experienced: the first consumption era (1912-1941), the economy is in its infancy, residents’ consumption power is low, and consumer demand is concentrated on meeting basic living needs; the second consumption era ( (1945-1974), the economy developed rapidly, consumption power increased, and consumption of durable consumer goods and popular brands gradually became popular; in the third consumption era (1975-2004), the economic growth rate stabilized, consumption became excessive and personalized, The public has shifted from the consumption of durable consumer goods to high-frequency and high-quality consumption, which is an era of "high consumption society"; the fourth consumption era (2005-2034), the economic growth rate has slowed down, and mass consumption has shifted from the pursuit of famous brands to the pursuit of Simplicity, leisure, and individuality awareness are gradually disappearing, and social sharing and environmental protection awareness have become the mainstream.
The economic growth rates of China and Japan are similar to a certain extent at each stage. Unlike Japan, China's economic growth rate in the second and third consumer societies is slightly higher than Japan's level in the same period, and Japan shows a step-like slowdown, while China's growth rate is slightly higher than Japan's. The process of slowing down becomes more stable. Referring to the consumption characteristics of various consumption eras in Japan, China has entered the early stage of the third consumer society since 2015. Consumer consumption needs have gradually begun to change to value individuals, higher material enjoyment and spiritual needs. Second-hand transactions have become an outlet for excess consumption. .
From the perspective of consumer demand, second-hand e-commerce meets consumers’ demand for high cost performance: they exchange acceptable product defects for expected price discounts, and pay more attention to the functional attributes and cost performance of the product. According to iiMedia Research’s survey data in May 2021, 70.4% of China’s netizens shop on second-hand e-commerce platforms because the products are cheap. Other reasons include: convenience and speed (50.7%), difficulty in buying the same goods in physical stores (35.4%), complete varieties (35.0%), representing a fashionable consumption method (25.7%), etc.
Z generation (post-95s, post-00s) users are gradually paying more and more attention to idle transactions. As the main force of the new generation of consumers, Generation Z has relatively diversified consumption preferences. Overall, Generation Z users: 1) pay more attention to the quality, price and brand of goods when consuming; 2) are more inclined to experience consumption and are willing to experience fun Buy orders; 3) High acceptance of idle transactions. According to QuestMobile statistics, as of November 2020, the number of active users of the Z generation (post-95s and 00s) has reached 320 million, accounting for 28.1% of all mobile Internet users.
From the perspective of active penetration rate (monthly active users who launch an App medium for a certain target group/number of monthly active users for the target group), according to QuestMobile statistics, in November 2020, the active penetration rate of Xianyu Generation Z users was 14.8 %, ranking fourth, only behind Taobao , Jingdong and Pinduoduo; from the active penetration rate TGI (monthly active penetration rate of a certain App medium in the target group/monthly active penetration rate of the App medium in the entire network *100) From a dimensional perspective, Xianyu’s Gen Z user active penetration rate TGI is 169, second only to the Dewu APP, which focuses on trendy shopping and sharing. As the consumption power of Generation Z continues to improve, it may become the main force of the new generation of second-hand e-commerce consumers. (Report source: Future Think Tank)
2.3. E-commerce infrastructure is complete, and second-hand e-commerce has completed the closed-loop online transactions
Compared with first-hand e-commerce, second-hand e-commerce is a stock market transaction. Most e-commerce platforms such as JD.com, Tmall, and Taobao adopt the B2C or C2C model. Manufacturers produce products and then flow them to consumers through primary e-commerce platform supply channels, which is an incremental market transaction; second-hand e-commerce platforms such as Xianyu and Zhuanzhuan Most merchants adopt C2C and C2B2C models. Goods are circulated among C-end users and are stock market transactions. Although second-hand e-commerce has a certain competitive relationship with first-hand e-commerce, most second-hand e-commerce platforms rely on first-hand e-commerce and benefit from the user traffic of first-hand e-commerce platforms. At the same time, second-hand e-commerce platforms serve as a supplementary format to first-hand e-commerce, filling the needs of users. There is a gap in demand for second-hand transactions, thereby further improving the ecological construction of a comprehensive e-commerce platform. Leading e-commerce and Internet platforms are actively deploying second-hand e-commerce business, Alibaba is deployed in Xianyu, JD.com is deployed in Aihuishou, 58 and Tencent are launching Zhuanzhuan.
The scale of the e-commerce industry is steadily expanding, and frequent promotions increase impulsive and unplanned consumption. According to National Bureau of Statistics statistics, the compound growth rate of online retail sales of physical goods from 2016 to 2020 was 24.7%, and the penetration rate increased from 13.3% to 24.9%, an increase of 11.6pct. From January to September 2021, national online retail sales were 9,187.1 billion yuan, a year-on-year increase of 18.5%. Among them, online retail sales of physical goods were 7,504.2 billion yuan, a year-on-year increase of 15.2%, accounting for 23.6% of the total retail sales of consumer goods. The scale of the e-commerce industry is steadily expanding, which can provide incremental growth for the supply side of second-hand transactions.
At the same time, major promotion activities have become more frequent. Since JD.com launched the 618 Shopping Festival in 2004, and after Taobao launched the first Double Eleven Shopping Festival in 2009, various festivals and live broadcast promotions have emerged in an endless stream. According to statistics from the Internet Economic News, in 2021 During the Double Eleven period, the total transaction volume of the entire network reached 965.1 billion yuan, a year-on-year increase of 12.2%; according to star map data statistics, the total network transaction volume during the 618 period in 2021 was 578.5 billion yuan, a year-on-year increase of 26.5%. Second-hand e-commerce platforms provide shoppers with a destocking consumption platform. Sellers can sell idle goods at a discount to avoid expiration or waste, and buyers can enjoy certain low-price discounts.
The high popularity of mobile Internet provides a foundation for the mental cultivation of second-hand e-commerce users. From the perspective of the scale of Internet users, from 2010 to 2020, the number of Internet users in my country increased from 460 million to 990 million, and the Internet penetration rate increased from 34.3% to 70.4%. As of June 2021, the number of Internet users in my country exceeded 1 billion, an increase of 20 million from the end of 2020; the Internet penetration rate reached 71.6%, an increase of 1.2% from the end of 2020. In terms of the age of Internet users, as the Internet penetration rate continues to increase, the number of Internet users in China is gradually increasing, and the age coverage is gradually becoming wider. Among them, the proportion of those aged 24 and under has gradually increased, accounting for 21.8% of Internet netizens in 2020, an increase of 3.4pct from 2019. As the Z generation, the post-95s generation has gradually become the main force of netizens. In view of the stronger environmental awareness of Generation Z , the increase in the proportion of Generation Z is conducive to the mental cultivation of second-hand e-commerce users.
The rapid economic development of blind boxes has given rise to a huge second-hand blind box market. With the enhancement of consumption power and the rapid development of trendy toys, the market size of my country's blind box industry has grown from 2.26 billion yuan in 2015 to 10.1 billion yuan in 2020, with a CAGR=45.4% and a growth rate of 36.5% in 2020. Mob Research Institute predicts that the market size of the blind box industry will reach 30 billion yuan in 2024. blind box economy attracts a large number of young consumers with its scarcity and uncertainty. What most consumers buy is not the toy itself, but the pleasure of taking apart the blind box. When the novelty wears off, a second-hand blind box market emerges.
Xianyu and Chaowanzu are currently the mainstream second-hand blind box trading platforms. According to Xianyu official data, there are more than 440,000 blind box players trading on the Xianyu platform. In November 2020, the transaction volume of idle blind boxes on Xianyu exceeded 120 million yuan, a year-on-year increase of 70%. In addition, compared with ordinary models, second-hand hidden models and IP co-branded blind boxes are in hot demand and have serious price premiums. For example, the original price of the "Bob Proposal" blind box is 89 yuan, but the price on the second-hand trading platform is more than 3,000 yuan; bubble The original price of "Ice Molly" co-branded by Mart and Okubo is 79 yuan, and the second-hand selling price on Xianyu is basically more than 600 yuan.
2.4. Financing in the industry is picking up, and cooperation with mainstream platforms is the trend.
Financing in the industry is picking up, and the amount of financing has increased steadily. From the perspective of the number of financing events (excluding second-hand houses and used cars), according to data from NetEase, the number of annual financing events peaked at 48 in 2015. Since 2016, the number of industry financing events has decreased year by year to 7 in 2020, indicating that Investors are becoming more cautious and rational about second-hand e-commerce-related investments, and the industry has entered a period of adjustment. Since 2021, the financing of leading second-hand e-commerce companies has begun to pick up, and most of it is concentrated after the B round. According to the "Dian Shu Bao" e-commerce database of the Internet Economic Society, there were a total of 8 second-hand e-commerce financing incidents in China (excluding second-hand e-commerce platforms such as second-hand cars and second-hand houses) in the first half of 2021, involving platforms including Zhuanzhuan and Panghu. Technology, Picker Man, Feiyu, Zhier, Flash Recycling, Ai Recycling. Among them, second-hand 3C giant Wanwu Xinsheng went public in the United States on June 18, 2021.
From the perspective of financing amount, according to IT Orange data, the financing amount of China's second-hand e-commerce industry increased from 7.652 billion yuan to 10.384 billion yuan in 2017-2019, with a CAGR=16.5%; as of September 27, 2021, the 2021 second-hand e-commerce industry The financing amount of the commercial industry was 13.266 billion yuan. From the perspective of single financing amount, according to IT Orange data, the single financing amount increased from 150 million yuan in 2017 to 380 million yuan in 2019, and the single financing amount from January to September 2021 was 580 million yuan. The overall amount of single financing shows an upward trend, indicating that second-hand e-commerce platforms are accelerating in the later rounds of financing and the industry is gradually maturing.
In addition to capital investment, leading second-hand e-commerce platforms often choose to cooperate with comprehensive platforms at the business level. From the perspective of cooperation platforms, second-hand e-commerce platforms can be mainly divided into three categories: 1) Backed by comprehensive e-commerce platforms, they attract traffic from each other and serve as a complementary business format to the comprehensive e-commerce platform. For example, Xianyu is backed by Alibaba and has a first-level entrance to Taobao; the homepage of the JD.com platform provides first-level entrances to Paipai and Aihuishou. 2) Rely on social platforms, mainly relying on social platforms to attract traffic. For example, Zhuanzhuan, the payment interface of the social platform WeChat has a second-hand entrance port of Zhuanzhuan. 3) Small and medium-sized vertical platforms rarely cooperate with comprehensive platforms. They often choose to delve deeply into vertical fields, win through refinement and word-of-mouth, and mainly rely on mutual introductions by hobby players in certain subdivisions.
. Trust needs to be improved urgently. "Live Broadcasting+" looks at the new direction of development
3.1. Pain points in the industry still exist, and improving customer trust is the key.
Pain points in the industry still exist, and trust issues need to be resolved urgently. Looking at different stages of transactions, the pain points existing in the second-hand e-commerce market mainly include: 1) Before the transaction, due to information asymmetry, it is difficult for many users to evaluate the quality of the product; 2) During the transaction, it is difficult for some platforms to establish trustworthy In the transaction scenario, there is a lack of seller-related authentication system; 3) After the transaction, the lack of platform after-sales guarantee mechanism may lead to many disputes between merchants and users.
From the product side, consumers pay different attention to different categories of goods: 1) Second-hand 3C products: Most of them are non-standard products, the brands are relatively concentrated, and the unit prices are generally high. Users pay more attention to whether the goods are genuine licensed products. Issues such as whether the quality can be guaranteed, whether there are invoices and after-sales services; 2) Second-hand clothing: Most of the second-hand clothing resold on second-hand platforms are big-name clothing, and domestic users are highly obsessive about clothing. Can the brand authenticity, condition and hygiene be guaranteed? Condition is the main focus; 3) Second-hand luxury goods: Compared with other categories, luxury jewelry is mostly small and medium-sized goods with higher unit price. Second-hand buyers pay more attention to whether the product has an appraisal report, whether it is new or old, and whether there is an invoice for warranty. etc.; 4) Second-hand books: The unit price is relatively low, and the logistics cost and condition of the goods are the main concerns of users; 5) Lifestyle maternal and infant products: Parents born in the 1990s pay more attention to product quality, the hygiene status of second-hand maternal and infant products, and after-sales service Return and exchange service is the focus. Each platform needs to optimize platform services for different product categories and focus on user concerns.
Improving customer trust is a prerequisite for increasing the number of active users. Increasing customer trust can cultivate user stickiness and repurchase rates, while improving the platform's image and attracting traffic through word-of-mouth effects. According to 2021 statistics from iiMedia Research, 37.8% of netizens refuse to use second-hand e-commerce platforms because there are too many fakes and they do not trust the platform. The main reasons why users have low trust in second-hand e-commerce platforms include: 1) opaque product information (46.1%); 2) inability to return goods (43.3%); 3) the actual product does not match the picture (41.1%) . Improving the transparency of product information and improving the after-sales service mechanism will be the key to building the core competitiveness of second-hand e-commerce.
looks forward to the future development of second-hand e-commerce. How to use its unique B-side identity to provide capabilities that C-side users need but do not have in transactions, and then use its strong correlation advantages to integrate service elements and improve itself in second-hand transactions. The proportion of value in the process is the main theme of the future development of second-hand e-commerce.
Refined operations have become a future trend, and the demand for platform innovation is increasing. After five years of exploration in second-hand e-commerce, the business models of major platforms have basically taken shape. This means that if there is no disruptive innovation, the second-hand e-commerce industry will see the Matthew Effect of the strong and the strong. At present, Xianyu and Wanwu Xinsheng have basically formed a closed loop of the industrial chain. The transition from to relies on the early full-category traffic dividends to enter the second-hand 3C subdivision track. In the future, the competition among leading platforms may focus on the refined and precise operation of users, relying on good user accumulation and stickiness to win.Small and medium-sized vertical platforms may use strong supply chains or light-asset models to delve into niche areas, provide specialized and customized services, and secure the long-tail market.
continues to optimize platform functions, and achieving standardization and normalization is the only way for the future development of the industry. The main advantage of second-hand e-commerce platforms is to improve transaction efficiency, but there are still problems in the industry such as difficulty in safeguarding consumer rights and shoddy goods. Therefore, continuing to optimize the platform system, establishing a trust mechanism, and reducing the degree of information asymmetry between transaction parties are inevitable choices for the further development of the second-hand market. For example, Xianyu uses , Alipay, and Zhima Credit to authenticate the identity and credit of the seller, improves the product evaluation system through fish pond social networking, introduces a third-party quality inspection platform to ensure the credibility of the transaction scenario, and builds a self-built quality inspection team. , perform identity authentication through the WeChat platform.
3.2. Strong supervision opens up a healthy competition pattern. “Live Broadcasting +” looks at future development. New directions
Strong supervision model opens up a healthy competition pattern in the industry. Since November 2020, regulatory regulations on the Internet industry have been promulgated one after another. The country has gradually improved its anti-monopoly treatment of the platform economy and , and subsequently issued legal documents related to data, aiming to prevent the disorderly expansion of capital, protect national data security, and promote fairness. competition and protect consumer rights. As supervision continues to deepen, a healthy competition among second-hand e-commerce platforms has begun. In a healthy competition situation, improving platform attention and user stickiness is the core competitiveness of second-hand e-commerce.
Alibaba series APP unlocks WeChat payment, and the technical requirements are upgraded under the normalization of Internet. As of November 2021, Alibaba apps such as Kaola, Ele.me, Damai, Shuqi Novel, Youku , etc. have supported WeChat payment, and apps such as Taote, Xianyu, and Hema have applied to access WeChat payment. Second-hand e-commerce companies such as Xianyu are gradually promoting the integration of WeChat payment. On the one hand, it can improve the efficiency of consumer transactions, and on the other hand, it puts forward higher requirements for platform transaction security and technical support.
Live streaming shopping is gradually becoming more popular, which may bring new growth to second-hand e-commerce. As Internet celebrity anchors and celebrities such as Viya and Li Jiaqi continue to sell goods on a regular basis, the popularity of live streaming shopping continues to increase. According to Star Map data, the total transaction volume of live streaming during the 2020 Double Eleven and the 2021 "618" promotions reached 72.9/64.5 billion yuan respectively. Second-hand platforms such as Xianyu, Zhuanzhuan, and Hongbulin have begun to introduce new transaction models such as live streaming and community platform interaction. For example, consumers can enter the seller’s live broadcast page through the Xianyu homepage; the second-hand luxury fashion platform Hongbulin’s homepage has a live broadcast entrance, and consumers can choose live broadcasts of designated products or live broadcasts of designated anchors according to their needs. The
live broadcast format can solve the problem of product information asymmetry and trust in the second-hand transaction process to a certain extent. 1) The live broadcast mode can deliver more product information to consumers. Compared with the previous graphic presentation mode, the product presentation in live broadcast is more three-dimensional. The anchor provides detailed display, professional explanation and even trial experience of a product, so that consumers can have an in-depth understanding of the product characteristics. 2) The live broadcast mode can improve buyer trust and user stickiness. Live streaming is mainly divided into two categories, one is store self-broadcasting, and the other is live broadcasting by celebrities and experts. The former provides a platform for direct communication and interaction between merchants and buyers, which is conducive to merchants' accumulation of private domain traffic. The latter relies on the fan effect of celebrity Internet celebrities to attract traffic, and relies on the reputation of anchors to endorse product quality. At present, second-hand e-commerce live broadcasts are mainly in-store broadcasts, and the goods carried by celebrities are mainly second-hand luxury goods with higher unit prices, thus making up for the lack of quantity on the supply side.
. There is a serious fault in the industry, with Xianyu, Zhuanzhuan, and Wanshixinsheng taking the lead.
4.1. The "four echelons" pattern has begun to take shape, and comprehensive platforms occupy the mainstream.
From a product perspective, comprehensive platforms occupy the mainstream, and transaction categories basically cover all consumer goods. After more than 10 years of development, the second-hand e-commerce industry currently presents a competitive landscape in which comprehensive platforms dominate and vertical platforms focus on intensive cultivation.From the product perspective, second-hand e-commerce can be divided into: 1) Second-hand comprehensive categories, such as Xianyu, Zhuanzhuan, etc.; 2) Second-hand electronic products categories, such as Aihuishou, Huishoubao, etc.; 3) Second-hand fashion categories, such as Zhi Er , Hongbulin, etc.; 4) Second-hand luxury goods, such as Xin Shang, Fat Tiger, etc.; 5) Second-hand books, such as Kongfuzi Used Book Network, Yuelin, etc.
Everything is new and on the market, second-hand e-commerce has formed the "four major echelons", and the second and third echelons are seriously disconnected. First tier: After integrating Aihuishou, Paijitang, Paipai and overseas business AHS Device, Wanwu Xinsheng was listed on the New York Stock Exchange in June 2021, becoming the first second-hand 3C e-commerce company in China to be listed. The second echelon: mainly comprehensive platforms represented by Xianyu and Zhuanzhuan. The third echelon: Mainly vertical platforms represented by Xiangwushuo, 5miles, Tiejia Second Mobile Phone, Huishoubao, and Hongblin; The fourth echelon: Mainly platforms dealing in second-hand books, second-hand luxury goods and other transaction categories. Including Confucius Used Books Network, Huafener, Zhier, etc.
4.2, Xianyu relies on Taobao to build a second-hand community, and the first quality inspection service is transferred to 3C
, S (service provider) buyer. From the product side, Xianyu provides second-hand transactions in all categories, and its strategic upgrade focuses on high-end categories such as luxury goods. Through "Xianyu Premium Products", it focuses on the development of trendy products, luxury goods, digital 3C, beauty and fashion toys. From the service side, Xianyu’s high-quality products are guaranteed to be fidelity (100% inspected by professional appraisers) and all products are shipped free of charge.
At the same time, Youpin's after-sales service is relatively complete. Except for 3C digital products, which support returns without reason within 7 days (the shipping costs are borne by the buyer), other products of Xianyu Youpin support quality issues within 7 days, or the inspection results are different from the actual goods received. In case of inconsistency, returns are guaranteed (shipping costs will be borne by the seller). In addition, Xianyu Youpin focuses on the growth of children and has opened a picture book rental section. Users can become a Xianyu member for only 0.01 yuan per month, rent children's picture books and books at will, and enjoy unlimited rental exchange services. (Report source: Future Think Tank)
relies on Taobao traffic to continuously strengthen the concept of community. Xianyu is committed to improving the social attributes of the platform and accumulating a user base through the creation of "Campus Circle", "Xiaoxiaole", "Xianyu Chaoshe", etc. For example, by building a "campus circle" to focus on young consumer groups, after users join the campus circle through student authentication, they can sell idle items in the circle, post urgently needed items to seek help from other users, share daily life and rent nearby houses, etc. Students can Make friends from schools all over the country. “Xiaoxiaole” is a mini-game mainly promoted by Xianyu. Users can obtain the required products for free by clearing the game. "Xianyu Chaoshe" mainly sells the same styles of celebrities and big names. It not only supports the purchase of the same styles of celebrities or rare collections at low prices, but also allows people to enter the community to participate in discussions on related topics. For users, Xianyu is not only a trading platform, but also a dating software. The improvement of social attributes not only drives users' daily activity, but also increases the trust of both parties to the transaction, thereby achieving a win-win situation for traffic and word-of-mouth.
According to Analysys Qianfan statistics, in terms of MAU, the number of monthly active users of Xianyu increased from 16.0329 million in February 2018 to 124.4813 million in April 2021. The average number of monthly active users in 2020 was 93.3102 million, year-on-year. An increase of 88%. In terms of monthly usage time, the average monthly usage time of Xianyu in 2020 was 275 million hours, a year-on-year increase of 55.75%, which was approximately 8 times higher than the 31 million hours in February 2018. The monthly usage time in 2021 will remain above 200 million hours. . Judging from the number of APP launches, the total number of launches in 2020 was 44.426 billion, a year-on-year increase of 68.76%.
Zhuanzhuan, as the leading second-hand e-commerce platform in China, has begun to enter the second-hand 3C market. In May 2020, it strategically merged with Zhaoliangji. While maintaining the C2C full-category development model, the business began to focus on the second-hand 3C market. According to data released by Zhuanzhuan Group, as of August 2020, mobile phone C2B business increased by 171.69% compared with the same period last year, and increased by 61.1% compared with when the merger was announced.Since March 2021, the daily receipt volume of the group’s mobile phone C2B business has been stable at 15,000 units for many days, and it has occupied the first position in the second-hand mobile phone C2B recycling industry.
pioneered second-hand quality inspection services and continuously improved product quality and after-sales guarantee through strict selection. Zhuanzhuan carefully selected products focus on carefully selected quality, service guarantee, and worry-free after-sales service. From the perspective of supply, each product comes from a highly creditworthy seller, ensuring the reliability of the supply. From a service perspective, the platform hires professionally certified senior appraisers to provide a full range of inspection services to ensure product quality. Among them, second-hand mobile phones have undergone 388 inspections (such as appearance quality, equipment functions and in-depth inspections, etc.), notebooks, tablets and watches have undergone all-round inspections (such as equipment functions and special inspections, etc.), and books have undergone 15 inspections (such as genuine identification, Appearance inspection, etc.). From an after-sales perspective, we provide three major after-sales services: guaranteed returns, guaranteed compensation, and free shipping to ensure buyers’ consumer rights. For example, mobile phones, tablets, notebooks and watches provide 7-day no-question returns, 24-hour delivery, free shipping and other services; if a book is fake, you will get three for one, and free shipping for purchases over 45 (free shipping for 199 in remote areas).
According to Analysys Qianfan statistics, the number of monthly active users of Zhuanzhuan showed rapid growth in August 2019, reaching a peak of 34.7418 million in November, and then showed a downward trend. The average number of monthly active users in 2020 reached 20.1304 million, year-on-year in 2019 There were 24,851,900 people in the year, a decrease of 19.00%. Since 2021, Zhuanzhuan MAU has rebounded. In April 2021, the MAU was 17.7961 million, an increase of 20.13% from 14.8135 million in January 2021.
The main differences between Xianyu and Zhuanzhuan: 1) Different product positioning. Xianyu is a full-category second-hand trading community with rich categories and a large number of users; Zhuanzhuan focuses on second-hand 3C and has its own dedicated professional team and evaluation standards. 2) The transaction models are different. Xianyu focuses on the C2C community-based transaction model, creating a good social circle, and by connecting to Taobao's "one-click resale", the platform has a rich SKU; Zhuanzhuan has transformed from C2C to C2B2C model. Currently, the two transaction models coexist, and second-hand 3C The field has more professional advantages. 3) The profit model is different. Xianyu funds are connected to Alipay, which increases some cash income compared to transfer.
vertical platforms are deeply cultivated, each with its own advantages. Vertical second-hand e-commerce platforms such as luxury goods, fashion, maternal and infant products, antique books, etc. have formed unique advantages in each vertical field by deeply cultivating the track. For example: 1) Luxury second-hand e-commerce-Zhier provides customers with convenient services through a transaction model that combines B2C and C2C. The platform builds a single SKU and deeply develops supply chain services. It improves the overall operating efficiency of the platform by building a process-oriented, standardized and refined supply chain. It also focuses on multi-channel operations and reduces user barriers by combining multiple channels such as the company's official website, APP, and mini-programs. . 2) Fashion second-hand e-commerce--Hongbulin actively explores new channels for live streaming to bring goods, and increases user stickiness by improving user consumption experience. 3) Second-hand book e-commerce - Kongfuzi Used Book Network has rich product resources, mainly based on C2C model, and combined with decentralized business methods, it has created a Chinese cultural exchange community integrating used books and antiques.
4.3. Rebirth of all things: deep cultivation of second-hand electronics, relying on JD to create a closed-loop industrial chain
4.3.1. Company profile: After ten years of hard work, JD Group became the first shareholder.
Rebirth of all things (original name: Aihuishou) was established in 2011 , listed on the New York Stock Exchange in the United States on June 18, 2021, is currently the largest second-hand 3C product trading and service platform in China. The company initially recycled second-hand consumer electronics products from consumers through its subsidiary Aihuishou; it launched Paijitang in 2017 and gradually expanded third-party recycling channels; after acquiring Paipai in 2019, its products and services expanded to individual consumers; through the establishment of its own platform Connect the supply and demand ends and open up the closed loop of the industrial chain. After ten years of development, the company now has four major business lines, including the electronic product recycling and environmental disposal platform (C2B) "Aihuishou", the global second-hand 3C product online trading platform (B2C) "Paijitang", and the sales of high-quality second-hand products. Platform (B2C) "Paipai" and overseas business AHS Device.Its business covers the country and the world's mainstream second-hand digital free trade markets such as India, the United States, and Brazil. It is a strategic partner of JD.com and has reached in-depth cooperation with well-known companies such as Apple, Xiaomi, Huawei, DJI, OPPO, and vivo. After several rounds of financing,
company has become the largest shareholder of JD.com. Since its establishment, the company has received multiple rounds of investment from Wuyuan Capital, JD.com, Jinglin Investment, and Tiger Global Management, with a financing amount exceeding US$1.4 billion. Since the C round of financing in August 2015, JD.com has participated in multiple rounds of investment and become the largest shareholder and largest institutional shareholder, holding a total of 49.856 million shares, accounting for 33.9% of the equity. In addition, the major shareholders of Wuyuan Xinsheng are Wuyuan Capital (holding 19.055 million shares, accounting for 13%), company founder and CEO Chen Xuefeng (holding 15.242 million shares, accounting for 10.1%), InternetFundIVPte.Ltd. (holding 15.242 million shares, accounting for 10.1%) 11.729 million shares, accounting for 8%) and Tiantu Capital (holding 11.543 million shares, accounting for 7.9%).
4.3.2. Business overview: The business lines span both supply and demand ends, and the whole industry chain closed loop has been formed.
four major business lines focus on the second-hand 3C market and are committed to creating a full industry chain closed loop. The company has been deeply involved in the second-hand consumer electronics industry for nearly ten years, pioneering industry testing, grading and pricing processes, and has developed into a multi-business platform covering both supply and demand ends of the industry chain. 1) Supply side: Provide a stable supply of second-hand 3C products through multiple channels such as Aihuishou’s online and offline stores, cooperation with JD.com, Kuaishou, and mobile phone retail stores. 2) Disposal end: After the products are recycled, they undergo standardized inspection, grading and pricing through the company’s highly automated and high-precision quality inspection services. 3) Sales end: Products are sold to individual consumers and merchants through Paipai and Paijitang. The three business platforms of Aihuishou, Paipai and Paijitang have achieved full coverage of the company's C2B, B2B and B2C business models, standardizing and scaling the supply side and consumer side. In addition to the online platform, Wanwu Xinsheng is also committed to building offline business formats. As of June 30, 2021, the group has developed 862 stores (850 Aihuishou stores, 12 Paipai stores) and 1,500 stores in 184 cities in China. Multiple self-service stations.
Aihuishou: As the supply end of the new industrial chain of all things, it supports direct online valuation of electronic products. At the same time, through the Aihuishou APP, you can directly trade in old ones for new ones, or you can choose offline service stations for updates. Aihuishou Valuation Process: Taking a mobile phone as an example, the evaluation is mainly based on the usage and operation of the mobile phone, whether the personal account can be logged out, appearance and basic information of the mobile phone (such as storage capacity, purchase channels, network standards, maintenance status, etc.) For mobile phone prices, if the product has many defects and is not suitable for recycling, the recycling price will not be displayed.
Paipai: As a new 2C retail platform for all things, it undertakes JD.com’s second-hand sales business (digital mobile phones, clothing accessories, maternal and infant supplies, etc.). Each transaction category covers three options: personal idle, premium products and spare parts warehouse. options. Among them, personal idle products are mainly second-hand goods sold by individuals, without quality inspection, and the price is relatively cheap; goods under Paipai Youpin are carefully selected by Paipai or sold by third-party merchants, have quality inspection reports, and support 7-day no-reason returns. 180 days for quality problem repair; spare parts warehouse products are all sourced from JD.com’s self-operated products, which support 7-day return and 180-day quality problem repair. Product source: JD.com’s self-operated new products, 7-day return without reason, and functionally intact products, Products with damaged outer packaging that are left in the warehouse for sale, or products that have been replaced or repaired by the manufacturer after the original product was returned due to quality problems.
Paijitang: It is a 2B sales platform for the rebirth of all things. The APP has a dark shooting area, an open shooting area and a one-price area, and each area is equipped with detailed strategies. Among them, the secret auction area is divided into morning session (8:00~11:00), afternoon session (12:00~18:00) and evening session (19:00-02:00 the next day). Bidders can choose according to the items. Or bid in two ways: item attribute + level (not public). According to the principle of the highest bidder, the system automatically pays by default after the bidding is successful, and the handling fees are different for different payment methods.The public bidding area of the open auction area has opened open auctions for Jingdong Helpers, open auctions for spare parts warehouses, etc. The rules of the game are: ranking according to the bid level, the number of bids, and the bidding time. After the bidding, the bidding results are viewed, and the buyer pays. make a deal. The fixed-price area is a fixed-price sales area, where all products are clearly marked with price. In addition, consumers can add focused products through the Ruyi purchase page and continue to pay attention to market quotations.
Overseas business AHS Device: Overseas business AHS Device sells domestic second-hand 3C products to overseas merchants and distributors in Southeast Asia, Latin America, etc. It currently covers the world's mainstream second-hand consumer electronics trade markets such as the United States, Japan, and India, and is the only company with overseas layout. The market’s second-hand consumer electronics trading and service platform. Wanwu Xinsheng's perfect operating system ensures the platform's advantages of sufficient supply, complete categories, excellent prices, and fast turnover. Through the cooperation of the three major platforms of Aihuishou, Paipai, and Paijitang, it realizes cross-regional circulation of goods and solves the problem of second-hand consumer electronics market. There are serious mismatches between supply and demand, low transaction efficiency, and unstandardized pricing.
1P+3P The two major business models run in parallel. 1P model (self-operated business): The company acquires second-hand 3C products through multiple online and offline channels. Consumers purchase second-hand products through the Wanwu Xinsheng website, its APP and cooperative e-commerce, social platforms JD.com, Kuaishou, etc., forming product sales revenue. 3P model: third-party merchants are allowed to sell second-hand 3C products on the platform (mainly Paipai and Paijitang), and the company collects commissions or platform management fees, which constitute service revenue. The monetization rate in 2020 was 4.1%. 1) Paijitang: It charges service fees from both sellers and buyers. The former is determined as a percentage of the transaction price, and the latter is determined as a negotiated tiered pricing. The current commission rate is about 4% to 5% of the transaction amount. 2) Paipai: The service fee is only charged to the seller and is determined based on the percentage of the transaction price. In addition, for some merchants who use the company's online trading platform to sell products, in addition to service commissions, an additional fixed amount of platform management fees will be charged every month.
4.3.3. Financial analysis: Revenue has grown steadily, and the proportion of service revenue has gradually increased.
The company’s revenue has grown steadily in the past three years, and the revenue growth rate from 1 to 3Q2021 is impressive. From 2018 to 2020, the company's revenue increased from 3.26 billion yuan to 4.86 billion yuan, with a CAGR of 22.0%. Revenue from 1-3Q2021 was 5.344 billion yuan, a year-on-year increase of 66.3%. Looking at business segments, the company's revenue growth in the first three quarters of 2021 mainly benefited from: 1) Product revenue growth: the increase in revenue driven by the trade-in business of online Paipai & Paijitang and offline Aihuishou stores, achieving 45.79 from 1-3Q2021 100 million yuan, a year-on-year increase of 63.4%; 2) Service revenue growth: Mainly benefiting from the increase in transaction volume and commission rate of Paipai & Paipaijitang, service revenue from 1-3Q2021 was 766 million yuan, a year-on-year increase of 85.6%. From the profit side, the company's GAAP net profit attributable to the parent company expanded from a loss of 1.583 billion yuan in 2019 to 1.775 billion yuan in 2020, and the non-GAAP net profit attributable to the parent company narrowed from a loss of 538 million yuan in 2019 to a loss of 203 million yuan in 2020. Affected by listing equity incentive expenses, 1-3Q2021 GAAP net profit attributable to the parent company narrowed to a loss of 1.222 billion yuan (1-3Q2020 GAAP net profit attributable to the parent company was a loss of 1.349 billion yuan), and Non-GAAP net profit attributable to the parent company was a loss of 119 million yuan. (1-3Q2020 Non-GAAP net profit attributable to the parent company was a loss of 186 million yuan).
The proportion of high gross profit margin service revenue has increased, and product revenue is still the main source of revenue. In terms of revenue structure, Wanwu Xinsheng's operating revenue mainly consists of two segments: product revenue and service revenue. Among them, product revenue is its main source of income. From 2018 to 2020, product revenue was 3.250/3.730/4.244 billion yuan, accounting for 99.6%/94.9%/87.4% respectively. With the increase in the number of the company's consumer product transactions, product revenue from 1-3Q2021 reached 4.579 billion yuan, a year-on-year growth of 63.4%. Service revenue comes from the commissions the company charges from online platform merchants and users. The monetization rate of the platform increased from 0.5% in 2018 to 2.4% in 2019, and reached 4.1% in 2020, driving the proportion of the new life service revenue to gradually increase. From 2018 to 2020, the service revenue was respectively 0.12/2.02/614 million yuan. , CAGR=615.3% during the same period. Service revenue from 1-3Q2021 was 766 million yuan, accounting for 14.3% of revenue.
's gross profit margin has grown steadily, with a gross profit margin of 26.4% from 1-3Q2021.Since 2018, the proportion of service revenue with high gross profit margins has increased, and continued growth has driven the company's gross profit margins to rise steadily. The company's gross profit margin increased by 11.6pct from 14.1% in 2018 to 25.7% in 2020, and the company's profitability continues to improve.
In the first three quarters of 2021, affected by the recognition of equity incentive expenses, the company's various expense ratios showed a slight increase. Among them, due to optimization of staffing in 2020, the company's performance expense rate dropped from 16.7% in 2019 to 13.7%. The performance expense rate increased to 14.4% in 1-3Q2021, mainly due to: 1) increased personnel costs related to the company's business growth, and the 42.49 million yuan (6.58 million yuan) recognized in 2Q2021 due to the grant of employee options with IPO conditions. USD) salary expenses; 2) the increase in logistics expenses and operation center-related expenses in line with the growth in sales of second-hand consumer electronics products. The sales expense rate from 1-3Q2021 was 15.7%, accounting for the highest proportion among the four expenses.
1-3Q2021 The main reasons for the increase in sales expense ratio: 1) Increase in personnel costs related to the company’s business growth, and equity incentive expenses of RMB 26.26 million (USD 4.07 million) confirmed in 2Q2021; 2) Increase in traffic acquisition and second-hand Sales commissions related to equipment purchases. The administrative expense rate and R&D expense rate in 1-3Q2021 were 11.9%/6.3% respectively, an increase of 3.5 pct/0.7pct compared with 1-3Q2020. The year-on-year increase in the administrative expense rate was mainly due to the equity incentive expenses of RMB 282.07 million confirmed in 2Q2021 ( totaled US$43.67 million).
4.3.4. Future development: The volume of second-hand consumer electronics transactions is huge, backed by JD.com and Kuaishou. The market is accelerating its sinking.
China’s electronic product circulation volume is huge, and the transaction volume and transaction value of second-hand electronic products are steadily increasing. According to CIC data, China's electronic product circulation volume in 2020 was 2.62 billion units, a year-on-year increase of 5.96%, and the CAGR from 2020 to 2025 is expected to be 4.3%. In terms of transaction volume, China's second-hand consumer electronics product transaction volume in 2020 was 190 million units, a year-on-year increase of 21.15%. The CAGR from 2020 to 2025 is expected to be 23.7%, and the total transaction volume will reach 550 million units by 2025; of which, in 2020 The transaction volume of smartphones reached 150 million units, a year-on-year increase of 17.83%. The CAGR of the smartphone category is expected to be 22.0% from 2020 to 2025, and the transaction volume will reach 410 million units by 2025.
In terms of transaction volume, China's second-hand consumer electronics transaction volume (GMV caliber) reached 252.2 billion yuan in 2020, of which the smartphone category was approximately 180 billion yuan, a year-on-year increase of 27.66%; According to CIC, the total market transaction volume is expected to reach 9,673 in 2025 billion, of which the smartphone category is 690 billion yuan, and the CAGR from 2020 to 2025 is 30.8%/30.9% respectively.
The transaction volume and GMV of all new consumer products have increased significantly. According to CIC statistics, in 2020, Wanwu Xinsheng Group ranked first in the Chinese market in terms of transaction volume and GMV of electronic consumer products, with market shares of 8.7% and 6.6% respectively, and its transaction scale exceeded the sum of the second to fifth places in the industry. From 1-3Q2021, the company achieved GMV of 22.3 billion yuan, a year-on-year increase of 72.9%; the number of consumer product transactions was 22.1 million, a year-on-year increase of 35.6%. As of September 30, 2021, there were more than 200,000 registered sellers on Paijitang, and the number of the company's offline stores has increased to 956. As of November, the company's offline stores have exceeded 1,000.
The company relies on the support of JD user traffic to continue to deepen its supply chain. In June 2019, the company signed a five-year framework business cooperation agreement with JD.com, involving extensive cooperation in user traffic, marketing, research and development, commission sharing, supply chain logistics, customer service and after-sales service. The current specific cooperation between All Things New Life and JD.com includes: 1) The homepage of JD.com’s platform provides entry points for Paipai and Aihuishou to efficiently attract traffic to All Things New Life. 2) Wanwu Xinsheng provides consumers on the JD.com platform with a “trade-in” service for 3C electronic consumer products. Under this service model, consumers need to provide relevant information about the old equipment, and the platform will evaluate it based on the equipment’s condition. The final displayed price of the new equipment will be The price after deducting the price of the old equipment is then left to the consumer to choose the shipping method of the product, confirm the order, and make the final payment. 3) Orders placed on Paipai are mainly delivered by JD Logistics. 4) Jingdong also supports the "multiple-piece replacement" service. When purchasing new 3C products, it supports multiple second-hand goods to be valued individually and jointly deducted.
cooperates with JD.com, and the proportion of GMV in product sales revenue is increasing year by year. From 2018 to 2020, the GMV of Wanwu Xinsheng's cooperation with JD Group was 1.0/1.3/2 billion yuan respectively, accounting for 30.3%/33.3%/43.5% of product sales GMV and 17.5%/10.7%/10.2% of the company's total GMV. . In 1Q2021, the company's GMV of second-hand consumer electronics products recovered from the JD platform through trade-in and other channels accounted for 9.2% of the company's total GMV; the GMV contributed by the company's "Paipai Second-hand" on the JD platform in 1Q2021 accounted for 42.9% of the company's product sales GMV.
reached a strategic cooperation with Kuaishou and began to penetrate the sinking market. In May 2021, Wanshi Xinsheng opened Pre-IPO financing, and Kuaishou officially invested in Wanwu Xinsheng. At present, Kuaishou APP has officially launched second-hand 3C recycling services through Kuaishou Store. Kuaishou Store supports three recycling methods: express recycling, store recycling and door-to-door recycling. In addition, Paipai, a subsidiary of Wanwu Xinsheng, has teamed up with Kuaishou to carry out e-commerce live broadcasts to bring goods. It uses Kuaishou's traffic advantage to carry out used phone sales business and accelerate penetration of the huge domestic sinking market. On March 19, 2021, Paipai Yanxuan and Kuaishou e-commerce jointly created a special live broadcast event, hosted by Kuaishou’s high-quality goods discovery official Hua Shao. The total number of online viewers in the live broadcast room that night reached 2.6 million, and the cumulative order amount exceeded 44 million , creating a new record for the transaction volume of second-hand 3C live streaming.
4.3.5. Profit forecast
The company's operating income comes from product sales income and service income. Among them, the company's product sales income is mainly divided into online and offline product net income. Online product sales benefit from: 1) The two major platforms Paipai and Paijitang actively strengthen the expansion of other product categories such as Switch, smart watches, photography equipment, etc. The product matrix is continuously improved. After reaching cooperative relationships with JD.com and Kuaishou, the company will expand The coverage of 2C consumers brings more traffic and supply to the online platform; 2) As of June 30, 2021, the number of Paipai, Paijitang and offline Aihuishou has exceeded 700, and the number of stores in the future will be Store transaction volume is expected to continue to increase. In 2020, the continued expansion of offline stores and self-service station networks has slowed down due to the epidemic. We expect to maintain a high store opening speed in the future and continue to increase penetration into lower-tier cities. It is expected that products Sales revenue will achieve steady growth. We expect product sales revenue growth rates from 2021 to 2023 to be 29.68%/28.22%/30.17% respectively.
company's service revenue mainly consists of Paipai, Paijitang and other channels. The company's quality inspection infrastructure has been gradually improved, and Paipai has now formed a sales model that focuses on second-hand consumer electronics and covers all categories. At the same time, the company increased investment in other channels and invested in the second-hand luxury goods platform Ziyao. The Aihuishou APP opened online traffic and offline stores as recycling entrances. As cooperation with JD.com and Kuaishou accelerates market penetration and the monetization rate of 3P business continues to increase, service revenue is expected to grow rapidly. We expect service revenue growth rates from 2021 to 2023 to be 156.12%/94.71%/65.99% respectively.
In summary, we estimate that the company’s total operating income from 2021 to 2023 will be 7,077/10,120/14,270 million yuan, with year-on-year growth rates of 45.67%/43.00%/41.01% respectively. Since service revenue belongs to the asset-light profit model of platform commissions, the gross profit margin level is relatively high. Therefore, as the proportion of service revenue increases, the company's comprehensive gross profit margin level may maintain an upward trend. We estimate that the company's comprehensive gross profit margin from 2021 to 2023 will be 29.56%/32.47%/36.32% respectively.
(This article is for reference only and does not represent any investment advice on our part. If you need to use relevant information, please refer to the original text of the report.)
Selected report source: [Future Think Tank]. Future Think Tank - Official website
