On May 29, China's largest second-hand consumer electronics trading and service platform, Aihuihui, the operator of Wanwu Xinsheng, went to the United States to submit an IPO prospectus, intending to list on the New York Stock Exchange with the stock code RERE.

Intern Reporter | Liu Xiaohan

On May 29, China's largest second-hand consumer electronics trading and service platform Aihuihui operator Wanwu Xinsheng went to the United States to submit an IPO prospectus, intending to list New York Stock Exchange with the stock code RERE. Before

IPO, JD Group held 34.7% of the shares of Wanwu Xinsheng, making it the largest shareholder; Wuyuan Capital held 14% of the shares, making it the second largest institutional shareholder; founder Chen Xuefeng indirectly held 8.3% of the shares through an offshore company and directly held 10.9% of the shares. In addition, Wang Yongliang, director and president of Wanwu Xinsheng and former general manager of JD Paipai , holds 0.4% of the shares, and all directors and executives hold a total of 11.3% of the shares.

In fact, as early as 2016, all things were reborn and went public frequently, but there was no further information. It seems that it is not satisfied with logging into the capital market with the single model of To B. Nowadays, the integrated Wanwu Xinsheng has four second-hand 3C trading platform products including Aihuihui, Paijitang, Paipai and overseas AHS Device, forming a "C2B+B2B+B2C" business model. It seems that everything is ready, but it only lacks the east wind.

consecutive years of losses

For most people outside the industry, mobile phone recycling seems to be a huge profit industry. However, by reading the financial report of the new life of all things, Interface News found that the seemingly complete value chain of second-hand electronic products did not bring profits to them, but instead suffered losses.

From 2018 to 2020, the net losses of All Things New Life reached 208 million yuan, 706 million yuan and 510 million yuan respectively. The prospectus shows that Wanwu Xinsheng faces problems such as serious reliance on JD in business and is restricted by JD , heavy asset brings increased expenses, and cash flow is tight.

Interface News reporter learned that in 2011, All Things New Life (formerly known as Aihuihui) was launched in the C2B model, focusing on Aihuihui APP. The transaction was originally conducted between consumers and small merchants. Founder Chen Xuefeng, headquartered in Shanghai. At the end of 2017, Aihuihui launched Paijitang, a B2B model. In 2019, Aihuihui acquired paipai, a second-hand commodity trading platform under JD , and integrated the three products into a closed-loop value chain brand with "C2B+B2B+B2C" in 2020.

The business involved in the new life of all things includes three value chains, which makes people curious about what the profit model of recycling is like and what connections exist between each industrial chain.

In layman's terms, consumers can sell their second-hand electronic products on Aihuihui's portal or offline stores (the prospectus shows that nearly 70% of the mobile phones are mobile phones), and the second-hand mobile phones sold will be shipped to Aihuihui's operation center for processing.

prospectus shows that Wanwu Xinsheng currently operates 755 offline stores in 172 cities. In addition, it has established 7 centralized operation centers and 23 municipal processing stations with proprietary data-driven processing technology. The processed second-hand mobile phones will be sold in Paijitang and Paipai markets.

Among them, Paijitang is the To B platform, and the targets for sale are small merchants and retailers that require second-hand electronic products, usually the telecommunications industry and telephone retail industry factories, and purchase second-hand products through bidding; while Paijitang is the To C platform, which is mainly sold to individual consumers.

Million Things New Life’s income mainly comes from two parts, one comes from the sale of electronic products such as mobile phones, and the other hand, it collects commissions from third-party merchants participating in the online market. More than 85% of the revenue comes from product sales, and the online market commission revenue accounts for less than 20%.

prospectus shows that since the establishment of the closed-loop value chain of "C2B+B2B+B2C" in June 2019, in 2019, 2020 and the first quarter of 2021, the revenue of Wanwu Xinsheng was 3.932 billion yuan, 4.858 billion yuan and 1.514 billion yuan respectively.

According to the China Investment Company report, the transaction volume of second-hand mobile phones in 2020 was 189 million units, while the transaction volume of All Things New in the same year was 236,000 units, accounting for only about 0.12%.

depends on it but is also restricted JD

All things new to establish cooperation with JD has to start with Paipai.com. The Paipai.com, which was born in 2005, is an e-commerce trading platform under Tencent , but it was stopped due to long-term losses and became the edge business of Tencent .

Tencent transferred Paipai to JD in 2014 for JD 's shares. The takeover of JD did not change Paipai's loss situation. In the fourth quarter of 2015, JD had to shut down Paipai, which had continued to lose money. The quarterly financial report caused a loss of 2.57 billion yuan to JD due to the goodwill and impairment of intangible assets.

In 2017, All Things New Life signed an exclusive cooperation agreement with JD . In June 2019, JD.com sold Paipai, a hot potato to the new life of all things for US$500 million. The prospectus shows that the Xinsheng of All Things, who was not well-funded at the time, paid , with a price of about 27.5 million shares of preferred stock , equivalent to 480 million US dollars, to .

Through this acquisition, All Things Rebirth has expanded the scope of commercial cooperation with JD . On the one hand, it is the brand name, deferred income tax liability and goodwill brought by purchasing Paipai. On the other hand, JD provides Paipai with an access portal on its own platform, and users can connect to the online trading market including Paipai, which pays JD channel fees based on transaction volume. At the same time, JD.com e-commerce also provides an interface for Aihuihui to provide customers with trade-in services.

prospectus shows that after the acquisition of Paipai in June 2019, relying on the traffic dividend brought by JD , the online market transaction volume (GMV) of All Things New in 2019 increased from 2.4 billion yuan in 2018 to 8.3 billion yuan, a year-on-year increase of 245%.

In 2020, the GMV of All Things New Life online market further increased from 8.3 billion yuan last year to 15 billion yuan, an increase of 80.72% year-on-year. At the same time, the revenue of All Things New Life increased from 3.262 billion yuan in 2018 to 3.932 billion yuan in 2019, and further increased to 4.858 billion yuan in 2020. You should know that Paipai.com only completed the acquisition in June 2019, and its impact on 2019 performance was limited.

On the other hand, JD has also gained a lot of benefits. All things Xinsheng will also pay JD a certain amount of traffic fees and second-hand 3C product procurement fees every year. The prospectus shows that in 2019, All Things New Life paid JD traffic and procurement fees of 54.7 million yuan, which increased to 110 million yuan in 2020, an increase of 101.10% year-on-year.

seems to be a win-win situation, but in fact it is not the case. The prospectus mentioned that certain conditions must be met to obtain the support of JD . Once the traffic dividend brought by the interface of JD.com is missing, the performance of the new life of all things may be hit hard.

crazy price reduction was criticized by users

Prospectus shows that from 2018 to 2020, the cost of new products in all things accounted for 85.9%, 80.8% and 74.3% of revenue respectively, and the profit margin of second-hand 3C products seems to be not high in itself.

Although everything is reborn and is crazily suppressing the cost of goods, it still does not make money. What is the reason? The increase in logistics operation fees and marketing expenses offset these efforts, and when commodity costs fell to 74.3% in 2020, the net loss also reached 186 million yuan.

prospectus shows that from 2018 to 2020, the operating expenses of Wanwu New Bioflow accounted for 10.8%, 16.7% and 13.7% of the main business revenue, respectively; marketing expenses accounted for 7.3%, 14.4% and 15.2% of the revenue, respectively.

Among them, the logistics operation costs include 755 offline stores of Aihuihui, 7 centralized operation centers, 23 municipal processing stations and warehousing suppliers with proprietary data-driven processing technology, as well as 1,476 operating and logistics personnel (accounting for 64.7% of the total number). The increased employee spending of these operating stations increased from RMB 158 million in 2018 to RMB 253 million in 2020.

In addition, the acquisition of Paipai in All Things New Life also affected its revenue. In 2019 and 2020, All Things New Amortized 193 million yuan and 309 million yuan of Paipai's intangible assets, accounting for 34.04% and 41.70% of the current marketing expenses.

For the new life of all things, compressing the cost of recycling of goods has not brought about improvement in profit margins, but has instead caused some users to criticize their price reduction measures. Platforms including Black Cat complaints , Zhihu and other Zhihu all have a large number of complaints and complaints about Aihuihui's price reduction. Between user experience and operating profits, the new life of all things seems to have temporarily chosen the latter.