The recommerce trend is sweeping not just the nation, but perhaps the world. As more Americans become accustomed to buying pre-owned or returned items from other consumers or businesses, the practice is moving abroad and is growing swiftly in China.
Chinese consumers have demonstrated interest in the recommerce field, but the category is still growing and doesn’t yet include a particularly large group of players. Currently, Alibaba-owned Xianyu and Tencent-backed Zhuan Zhuan are the biggest platforms for recommerce in the country, holding nearly 90 percent of the category last year. Venture capitalists are funding new entrants to the field, and features like authenticity guarantees, postings to social media, the use of data and post-sale services could propel the industry forward, according to a new report from Fung Global Retail & Tech.
Recommerce Bigger Than Ride Sharing In China
At $60 billion, the recommerce category in China was nearly three times the size of the nation’s ride-sharing economy last year, CBNData indicates. Because China is home to a large quantity of pre-owned products, the recommerce field is expected to continue growing, the Fung Global Retail & Tech study indicates.
During 2016, recommerce provider Xianyu had 23 million monthly active users, and by December 2016, the company’s mobile app was ranked 118th in China’s app rankings, based on data from QuestMobile. During the same time period, Zhuan Zhuan had 13 million monthly active users, and the company’s mobile app had a rank of 180 in the listing of top-selling apps. Both of these two big players are consumer-to-consumer platforms rather than business-to-consumer consignment firms.
Xianyu Versus Zhuan Zhuan: What’s The Difference?
Alibaba initially launched Xianyu in 2011 under a different name, and it received its current moniker in 2014. To use the app and/or website, consumers create their own personal virtual shops, where they post and promote their pre-owned merchandise. The consumers conduct the entire transaction online and pay using Alipay, where the money is held in escrow until the buyer receives the item and is happy with it. Neither the buyer nor the seller is charged a commission.
Zhuan Zhuan also consists of both a mobile app and a website, which 58.com launched in 2015. The firm received a $200-million investment from Tencent in April 2017 to fuel its competitive abilities against Xianyu. To use the app, sellers add product listings, which potential buyers can then search. The app integrates with the WeChat platform so Zhuan Zhuan users can import their contact lists, boosting trust among users.
Small Players May Make Gains
Despite the fact that these two players carry 90 percent of the market, that may not last forever. Smaller firms are growing quickly and making gains in the market. For example, Secoo is a luxury recommerce site that grew its user base by 89 percent last year. Another luxury recommerce app, 91xinshang, has more than 200 million users registered, while GoShare2 is a women’s recommerce platform that has served more than 100,000 customers.
As these smaller players continue to gain market share, Fung Global Retail & Tech predicts that the field will become more diversified and the burgeoning infusions of venture capital into the industry could bring recommerce to new heights in China.