On September thirteenth, the iPhone 15 collection arrived as scheduled. Taking benefit of the recognition of the brand new system, Xianyu determined to personally enter the second-hand marketplace for cellphones, digital merchandise, and luxurious items.
Recently, Xianyu introduced the official launch of its “Help Selling” service. The platform offers high quality inspection, warehousing, and transportation providers for second-hand items transactions. Sellers solely want to finish three steps: “submitting an order – confirming the quality inspection results and price – confirming participation in the Help Selling service” to finish their idle transactions.
In the previous, solely counting on two classes with appreciable revenue margins, particularly cellular digital units and luxurious items, supported the existence of ATRenew, Plum, and different second-hand platforms and offline shops. Now that Xianyu has entered the market, it not solely must face trade competitors but additionally future investments in door-to-door high quality inspection, warehousing, and transportation. Is this a worthwhile enterprise?
“The majority of other recycling models on the market are mostly C2B2C consignment models with a single clearance channel. They recycle what they receive.” Xianyu General Manager Ji Shan identified the ache factors within the trade, the place it’s troublesome to steadiness the varied ecological roles of consumers, sellers, and repair suppliers in idle transactions. Sellers need comfort and excessive costs, whereas consumers need low costs and safe transactions with out pitfalls. However, intermediaries usually make substantial earnings from this course of.
This has led to a phenomenon the place the attention of second-hand transactions amongst Chinese customers shouldn’t be excessive. China produces over 400 million used cellphones every year, with 90% of them being idle. There are additionally 100 million unused luxurious items yearly, however the recycling price is simply 5%. In comparability to China’s single-digit recycling price, the United States has already reached ranges of 20%-30% and even larger. Nevertheless, the excessive revenue margin within the recycling course of nonetheless helps numerous offline shops and on-line platforms.
Xianyu needs to make use of the platform’s technique, based mostly on e-commerce visitors, to include the capabilities of upstream and downstream ecological service suppliers and supply a brand new answer. In phrases of particular operations, Xianyu offers skilled on-site high quality inspection providers for promoting objects, which then enter the platform for transactions. This contains growing publicity by way of search suggestions, auctioning out there part, and official reside streaming help in promoting objects to assist customers shortly do away with their idle belongings.
In this course of, Xianyu solely performs the position of a matchmaking platform for consumers and sellers. It appears that Xianyu’s mannequin has turn into “heavier”, however when it comes to high quality inspection and warehousing, Xianyu additionally collaborates with service suppliers reminiscent of Huishoubao, relatively than solely investing by itself. Currently, Xianyu’s cellular digital class helps on-site appraisal in 50 cities, protecting first- and second-tier cities. They have an expert staff of over 500 on-site high quality inspection engineers and cooperate with authoritative establishments reminiscent of China Inspection and Quarantine (CIQ) and China Traceability System (CTS), establishing an appraisal and after-sales service system.
SEE ALSO: Alibaba Replaces Manager of Second-Hand Goods Platform Xianyu
“Why do we need to focus on ‘heaviness’? It’s because there are some experiences that cannot be solved solely by being ‘light’,” stated Ji Shan. As the variety of customers reaches 500 million, Xianyu has developed from a easy C2C mannequin prior to now to an ecosystem the place skilled sellers, direct producers, and different numerous roles have emerged. This has posed challenges to consumer expertise.
For high-value items like cellular electronics and luxurious objects, with a purpose to deal with the belief problems with customers, it’s needed for platforms to determine high quality inspection channels, make heavy investments in credit score techniques and repair ensures. These are decisions that should be confronted throughout the improvement course of.
Although Xianyu has already established itself because the main second-hand e-commerce platform when it comes to consumer numbers, the expansion of consumer penetration price stays a core objective for the platform. According to Alibaba‘s newest monetary report, Xianyu noticed an 18% year-on-year enhance in DAU (day by day lively customers) for the quarter ending on June 30, 2023. The “Help Selling” service is primarily geared toward addressing belief points in transactions and enhancing consumer expertise and engagement. Additionally, it additionally presents one other chance for commercialization by way of value-added providers.
Ji Shan expressed that at the moment and within the foreseeable future, Xianyu doesn’t prioritize pure commercialization as its core goal. However, commercialization makes an attempt are needed. “Currently, we will charge a small fee for extremely high-profile sellers to cover the costs of quality inspection, warehousing, transportation, and other processes.”
Since its inside testing, Xianyu’s “Help Selling” function has helped over 230,000 customers promote their unused objects. During the testing course of, Xianyu’s trade and operations supervisor, Xuan Yi, noticed that the largest problem confronted by “Help Selling” remains to be the problem of belief. Additionally, as an organization with a robust web DNA, Xianyu might want to enterprise into offline door-to-door providers which require plenty of handbook work and extra detailed service.
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