Illustration from Canva.
In recent years, with the increasing awareness of low-carbon environmental protection and the concept of energy conservation and emission reduction in daily life, reselling idle items has become one of the important ways for many consumers to practice green and low-carbon behavior. After all, after reselling idle items, consumers can not only "regain their blood", but also allow idle items to continue to exert their value in the hands of consumers who really need them, thus effectively avoiding waste.
In this context, second-hand e-commerce has also taken advantage of the trend and entered the fast lane of development. According to the "Dianshubao" e-commerce big database, the scale of second-hand e-commerce transactions in 2022 will reach 48020.4 billion yuan, a year-on-year increase of 20%. With the improvement of consumers' acceptance of second-hand goods, the second-hand trading market is also continuing to expand, and many second-hand e-commerce platforms are competing to emerge and become one of the commonly used software for consumers.
01 Xianyu "keeps improving".
On May 23 last year, the second-hand trading platform Xianyu held a 2023 product upgrade conference. According to official data, the number of users of Xianyu has exceeded 500 million, the scale of baby release is nearly 100 million, and the number of ** products has exceeded 1 billion. The fact that Xianyu can become the priority choice for consumers when buying and selling idle items and gaining the recognition of so many consumers is related to many factors.
First of all, Xianyu is backed by Ali and has a huge user base, making it easier for users to find their favorite products on the platform. As we all know, Xianyu is an application owned by Alibaba, and with the endorsement of a large manufacturer, it is easier for Xianyu to gain the trust of consumers. And e-commerce is Ali's core business, after years of development, it has accumulated a large number of users, many of whom have the need to sell idle items, and Xianyu can well undertake this part of the demand. For example, users can easily sell what they bought on the ** by using the one-click resell function on Xianyu, saving the time of republishing. In addition, due to the large number of users, the second-hand goods sold on Xianyu are also extremely extensive, which also greatly increases the possibility of consumers finding their favorite products.
Secondly, Xianyu further strengthens the community attribute to enhance the user's sense of participation, and then realizes the attraction and retention of users. Nowadays, there are more and more players in the layout of the second-hand trading track, and how to attract and retain users has become a problem that Xianyu must face, and communityization is one of the important ways to enhance user stickiness. Not long ago, Xianyu has further strengthened the community attributes, not only launched the community-based product "seafood market", but also upgraded the original "play" community, which will once again enhance consumer participation and activity, and enhance the stickiness of users.
Finally, Xianyu continues to improve the credit system to optimize the shopping experience of users. In the process of buying second-hand goods, the most "big" thing for consumers should be the quality problem, due to the information asymmetry between the buyer and the seller, the buyer is extremely likely to buy fakes. In order to allow buyers to identify reliable players and reduce the pitfall, Xianyu is also constantly improving and upgrading the credit system. Last year, Xianyu launched a new credit evaluation system "Fish Power Value". It is understood that Yuli will refer to multiple dimensions such as big data model, user transaction behavior, and user transaction reputation to give a comprehensive score to help users identify the credit status of the other party.
02 Douyin "strides forward".
With the change of consumer concepts, the second-hand e-commerce industry is booming, and many second-hand trading platforms have been born. In recent years, the number of new players in the field of second-hand e-commerce has also continued to increase, and Douyin is one of them. As early as October 25, 2020, Douyin launched the "Douyin Second Luxury Festival" to enter the field of second-hand e-commerce, and since then, it has been frequently launched. And behind Douyin's continuous increase in the second-hand field, it also has its own logic.
On the one hand, Douyin has made efforts in the second-hand e-commerce business, which can further improve its e-commerce territory. Douyin has been working hard in the field of e-commerce for a long time, and it is thanks to long-term deep cultivation that Douyin's e-commerce business has achieved quite outstanding results. At present, consumers' consumption concepts have changed, second-hand, flat has become its shopping keywords, second-hand e-commerce has also shown huge growth potential, there is a lot of room for growth, Douyin's development of second-hand e-commerce business can not only improve its own e-commerce business sector, but also may be able to find new increments.
On the other hand, Douyin has huge traffic resources, which can boost the development of its second-hand e-commerce business. In fact, short** has long become the first weapon for people to "kill time", and the short** head platform Douyin has also accumulated a large number of users. This huge amount of traffic has also been an important tool for Douyin to develop new business segments, even in the field of second-hand e-commerce. With the blessing of massive traffic, Douyin's second-hand e-commerce business not only has its own traffic advantages, but also realizes personalized and accurate recommendations through algorithms, so as to meet the needs of Douyin users for second-hand transactions.
In addition, Douyin's live broadcast mode allows consumers to see the status of goods more intuitively. In fact, problems such as the proliferation of counterfeit goods and mismatched goods have always existed in the process of second-hand transactions, which is also the most headache for platforms and consumers. The live broadcast mode can better show the newness of the goods, allowing users to understand the original appearance of second-hand goods more intuitively and in detail, and greatly reducing the concealment of defects, so that "seeing is believing". In addition, the live broadcast model is Douyin's strength, and its second-hand e-commerce can also use this as an entry point to quickly establish trust with consumers and boost the development of its second-hand e-commerce business.
04 There are still difficulties to be overcome
There are signs that today's consumers are becoming more accustomed to buying second-hand goods. Boosted by consumer demand, the entire second-hand e-commerce industry has also maintained a growth trend. The increase of players from all walks of life has confirmed the broad prospects of second-hand e-commerce. However, it must be said that although the second-hand e-commerce market has great potential, there are still many problems that need to be solved by industry participants.
First, the quality of second-hand products is uneven, and the consumer experience is not good. Although consumers are beginning to choose second-hand goods, they also hope that the second-hand products they buy are of relatively high quality and relatively new condition. However, due to the strong non-standard nature of second-hand products, there are not a lot of differences between products. What's more, there are sellers who lie about the status of the goods and conceal defects in order to obtain higher **, which makes many consumers encounter this or that problem after the second-hand goods are in hand, resulting in a poor user experience.
According to the "2022 China Second-hand E-commerce Consumer Complaint Data and Typical Case Report" released by the E-commerce Research Center of the Network Economic Society, the refund problem accounts for the highest proportion of second-hand e-commerce user complaints in the country, reaching 2208%；followed by the quality of goods, accounting for 1461%；In third place is online fraud, accounting for 1104%。For the platform, if the problems such as mismatched goods and poor product quality cannot be solved, in the long run, consumers will gradually lose trust in the second-hand platform, resulting in a crisis of trust.
Second, although the second-hand e-commerce market is large, it is not easy to make a profit. Thanks to the growing acceptance of second-hand e-commerce, the number of users of second-hand e-commerce platforms is also increasing. However, with the growth of the number of users, the investment in technology, operation, and service that the second-hand e-commerce platform will pay will also follow, so profitability has become a big problem faced by major platforms. However, although the second-hand e-commerce market is expanding, there are very few companies that are profitable. In order to achieve better management, various platforms are also constantly exploring business models. For example, Xianyu has previously issued an announcement that it intends to charge software service fees for sellers who carry out high-frequency and high-value transactions on the platform, and continue to waive software service fees for other sellers and all buyers.
05 Offline stores become an "antidote"?
Recently, Xianyu, the head enterprise of second-hand e-commerce, has made new moves. It is reported that Xianyu announced that the first Xianyu circulation store will open in Gongshu District, Hangzhou on January 28, providing a full range of idle consignment services. In fact, not only Xianyu, but other second-hand e-commerce platforms have also been decentralized, and many offline stores have been opened in the same industry. So, what is the reason for the second-hand e-commerce platform to accelerate the layout of offline physical stores?
First, the second-hand e-commerce market is full of chaos, and offline stores can alleviate these problems to a certain extent. As mentioned above, problems such as fakes, concealment of defects, and mismatched goods still exist in the second-hand e-commerce market, because most of them are online transactions, so it is difficult to give identification results, and consumers often have situations where the physical object does not match the description when they get the second-hand products. In the next store, consumers can see the true state of second-hand goods with their own eyes, and do not have to worry about the occurrence of problems such as mismatch, which can effectively eliminate the risks caused by online second-hand transactions.
Second, the offline store model is easier to bring a sense of trust to consumers, so as to achieve the conversion of transactions. Xianyu's community-based construction is the key to its transaction transformation. It is understood that Xianyu has previously released a statistical statistic that users who have interacted with the Xianyu community have a transaction conversion rate of 135%, and the conversion rate of users without interaction is only 007%。It can be seen that interaction can bring consumers a higher sense of trust, and trust is the core of the continuation of second-hand e-commerce. Through offline stores, consumers can have a clear understanding of all products, and it is easier to build a sense of trust, and ultimately facilitate transactions.
Although there are still many problems, the second-hand e-commerce platform represented by Xianyu has not sat idly by, but has started from many aspects such as developing offline stores and improving the credit system, constantly solving pain points and rebuilding user trust. However, although offline stores can solve the crisis of trust to a certain extent, offline stores also mean heavy investment and pressure. All in all, there is a long way to go, and the idle fish still have a tough battle to fight.
The author of this article, Liu Kuang, is the founder and investor of Hainan Sanche Holding Group, focusing on the fields of science and technology and finance. He is a Forbes China contributor and his views are expressed on an individual basis.