JD.com takes the fight to Alibaba, Tencent in the sizzling second-hand online shopping market
Chinese online retailer JD.com on Thursday officially launched a second-hand e-commerce marketplace, pitting itself against rivals Alibaba Group Holding and Tencent Holdings in the multibillion-dollar industry.
The platform, called Paipai Secondhand, allows both individual users and merchants to list products in categories such as luxury goods, musical instruments, smartphones, computers, electronics, clothing and books.
Paipai Secondhand will compete in an increasingly heated second-hand market, estimated to be worth about 40 billion yuan last year according to the State Information Centre of China’s 2016 report on the so-called sharing economy. Other players in the sector include Alibaba’s Xianyu marketplace and the Tencent-backed Zhuanzhuan platform.
Investments in the sector by both technology and e-commerce giants are being driven by a shift in the consumption patterns of China’s millennials. The mainland’s young people today wield much higher purchasing power and tend to be more open-minded than previous generations – to them, buying second-hand items is viewed as a cost-saving way to shop, rather than being inferior.
The main users of such platforms tend to be young. On Alibaba’s Xianyu platform, the majority of users are under the age of 30, and mainly comprise students and white-collar office workers.
Xianyu said its users born in the 1990s make an average of about 3,500 yuan monthly and undertake transactions on average 3.6 times a month. Alibaba owns the South China Morning Post.
“Paipai Secondhand will be a win-win platform ecosystem as well as a reliable platform for users to conduct second-hand transactions,” said Hu Shengli, vice-president of JD Group in a statement.
With Paipai Secondhand , JD.com said it aims to provide a better experience for its merchants by offering services like product retrieval, quality assessment and logistics, so that both merchants and customers can have peace of mind when buying and selling on the platform.
The company also plans to invest 1 billion yuan into building up an ecosystem of merchants, with the funds going towards helping build up companies that will process millions of yuan in second-hand transactions annually.
According to Hu, Paipai Secondhand has been operating silently for a year, and has already seen some major transactions including the 400,000-yuan purchase of a Blancpain watch and a Yamaha piano that weighed more than 300 kilograms.
In April, Tencent injected US$200 million in funding into Zhuanzhuan, the second-hand marketplace unit of 58.com, commonly compared to China’s Craigslist.