As young consumers find their cupboards full and pockets empty, the market for second-hand goods has never been more vibrant.
Xianyu, the online second-hand marketplace owned by Alibaba. Photo from CFP
By LIN Beichen`
Today’s consumers, especially today’s young consumers, have been given unprecedented power: the power to buy almost anything, almost anywhere, 24/7. This kind of spending obviously results in people having a lot more stuff; stuff they don’t use, or perhaps even remember buying. The inescapable outcome of this process is that people have less money to spend, having already spent it on stuff they neither need nor want which is occupying space.
According to TANG Song, manager of Xianyu, a second-hand marketplace on Alibaba's Taobao, idle items account for at least 40 percent of personal items.
Now that the COVID “stay home, spend more” boom seems to be over, young people have begun to learn to exchange their unwanted purchases for someone else’s, and a vibrant online second-hand market is taking shape.
The domestic second-hand staff trading market, worth 740 billion yuan (US$116 billion) in 2018, reached 1.6 trillion yuan last year. In April, secondhand trading platform Zhuanzhuan raised US$390 million (2.5 billion yuan) in its latest funding round. Subsequently, news came that Aihuishou, another secondhand goods trader, hopes to raise as much as $1 billion in a June IPO.
As part of the Taobao-Tmall business group, Xianyu relies heavily on Alibaba and has little financing pressure, but it faces performance appraisal. Xianyu expects to turn over 500 billion yuan this year. Alibaba's financial report showed that Xianyu's turnover doubled in 2020 to 200 billion yuan. With the introduction of interest communities and content services, Xianyu resembles nothing so much as a second-hand Taobao.
According to Tang, Xianyu is largely a marketplace for things bought on a whim, principally through Taobao. In his opinion, as much as 20 percent of Taobao's sales might eventually be recirculated through Xianyu. in the future. Given that the Alibaba ecosystem ships US$8 trillion each year, the possibilities are endless. But first, it would be a good idea to deal with the high-flying complaint rate and the constant friction between buyers and sellers.
Complaints have been Xianyu’s biggest problem from the start. Tang puts it down to low entry barriers; almost anyone can sell almost anything. Xianyu has been positioned as comprehensive second-hand e-commerce from the beginning, covering almost all categories.
To fend off these obvious problems, Xianyu has changed its positioning from C2C to C2B2C; essentially acting as an honest broker between the two ends of the transaction. Xianyu provides services such as recycling, identification, logistics and after-sales. Alibaba's Ant Credit is working on a trust rating system. Tang admits that non-standard products are always difficult to manage. There will always be goods whose prices cannot be assessed objectively, a frequent source of complaints.
As the "618" online shopping festival (from June 1 to 18) approaches, Xianyu is beginning third-party inspections for high-priced items such as electronics and luxuries. People will buy an enormous number of things they do not want or need during the festival and Xianyu needs to be ready for the inevitable wave of resales.
Influencers were allowed onto the platform for the first time recently, though how they will operate on a platform specializing in second-hand sales by the smallest of possible sellers remains to be seen. want to develop content and social services? Bearing in mind that 60 percent of Xianyu users are under 30, Tang sees Xianyu's future as a community for "play."