Alibaba and Tencent-backed pre-owned e-commerce firms enjoy second spring thanks to China’s decarbonisation push

Name: China sees boom in transactions for used goods as coronavirus hits retail sector
Uploaded: 2021-07-15T01:00:06.000Z
Duration: 3 min 2 s
Description: China sees boom in transactions for used goods as coronavirus hits retail sector

Several Chinese platforms have raised big sums in the first half to fund their expansions

AiHuiShou has raised US$227 million through an IPO in New York and Tencent-backed Zhuanzhuan has raised about US$550 million through private equity fundraising rounds

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Tencent-backed Zhuanzhuan has avoided the emission of more than one million tonnes of greenhouse gases in the past five years, it says. Photo: Handout

Yujie XueandJane Zhang

Published: 9:00am, 15 Jul 2021

Low prices used to be a major factor driving Chinese consumers of second-hand products, but now they have one more reason to be frugal – fighting climate change by reducing the carbon footprint of their lifestyles.

China’s second-hand e-commerce industry has been booming amid the ongoing coronavirus pandemic and Beijing’s decarbonisation push, and several trading platforms have raised big sums in the first half of this year to fund their expansions.

“With the uncertainty of the current economic situation and growing adoption of recycling and environmental protection concepts, it’s a trend for consumers to trade used items online for some easy money,” said Cao Lei, director of the Hangzhou-based China E-commerce Research Center. The country’s second-hand e-commerce market was worth 374.5 billion yuan (US$57.8 billion) last year, and may grow to reach 411 billion this year, according to the centre.

03:02

China sees boom in transactions for used goods as coronavirus hits retail sector

China, where a quarter of consumer goods retail sales were conducted online last year, has the world’s largest e-commerce market. But this boom has created a big wastage problem, as many goods bought on impulse were not used. Their production and transport, as well as packaging and delivery left a big carbon footprint. To tackle this wastage, Beijing is promoting a circular economy, for which a development blueprint for 2021-25 was published this month. This involves designing products and supply chains in ways that enable them to be broken down and reused to make new products upon their disposal.

This is where platforms such as AiHuiShou International, a major second-hand e-commerce platform for computer, communications and consumer electronics products, Tencent Holdings-backed Beijing Zhuanzhuan Spirit Technology and Idle Fish, which is run by South China Morning Post parent Alibaba Group Holding, come in.

01:24

China to reduce carbon emissions by over 65 per cent, Xi Jinping says

AiHuiShou raised US$227 million through an initial public offering in New York last month. Founded in 2011, Aihuishou began as an online and offline sourcing services provider focusing on electronic devices. The company has also collaborated with JD.com, as well as smartphone makers such as Xiaomi and Huawei Technologies, as a trade-in channel. With more than 800 offline stores in 170 cities around the country, Aihuishou has sold more than 26.1 million second-hand goods on its platforms in the 12 months through the end of March.

Zhuanzhuan raised about US$550 million in the first half of this year, finishing the latest financing round of US$100 million last month led by Chinese smartphone maker Xiaomi. The platform, which is backed by online classifieds firm 58.com along with Tencent and Xiaomi, had 8.7 million active buyers and 3.9 million active sellers last year.

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