The broad prospect of the second-hand mobile phone trading market has attracted the competition of Internet giants and capital to enter the market, and the leading enterprises are also trying to lead the industry from the original extensive development to standardized operation with the help of their market position and technical ability.
Giant Enters to Wake up “Silent Gold Mine”
The second-hand mobile phone market, once not so obvious, suddenly stands in the spotlight recently.
On October 14, the second-hand mobile phone e-commerce platform Zhuan announced that the former CEO of Smartisan Technology Luo Yonghao will serve as the Zhuan brand promotion ambassador, and held a “old machine conference”, increasing the number of second-hand mobile phone business.
As the top stream IP in the mobile phone circle, Luo Yonghao never lacks heat and attention. Thus, the new CP combination of “Luo Yonghao + Zhuan Zhuan” began to be refresh on Moments, and the second-hand mobile phone market associated with it also became a hot spot.
Since entering the era of mobile Internet, mobile phone has become one of the most important consumer goods, although different brands have their own unique user base, but the consumers “nomadic” and competing goods, try to overtake each other between the cell phone industry creates an inherent contradiction: update product service life is long but short iterations, combined with the user to try psychology and impulsive consumption driven, a large number of second-hand mobile phone products need to return to the market.
According to data from the Ministry of Industry and Information Technology, China is expected to produce 524 million used mobile phones by 2020, while the country has accumulated more than 2 billion used mobile phones since 2014. At the same time, the proportion of recycling of second-hand mobile phones through formal channels is still very low, only about 2%. Therefore, the second-hand mobile phone market is also known as the “silent gold mine”.
The industry believes that the further release of consumer demand in the sinking market, as well as the replacement tide brought by the 4G to 5G upgrade, will jointly drive the growth of second-hand mobile phone transactions.
In 2019, 206.7 million used smartphones were shipped around the world, according to a report released by IDC, a leading market research firm. In 2018, the number was 175.8 million. Shipments of used mobile phones are expected to reach 332.9 million units by 2023, with a CAGR of 13.6 percent.
Fast-growing markets are attracting capital. On September 22, China’s 3C electronic products professional recycling platform AiRecycler announced that, after the acquisition of Morningside Capital, the World Bank, Tiger Global Fund and other institutions after multiple rounds of investment, AiRecycler again received Jingdong and Guotai Junan led the investment of more than 100 million US dollars E+ round of investment.
In addition, love recycling also announced the brand upgrade plan, “all things new” will replace “love recycling” as the new group brand. Like Zhuan, the whole C2B2C industry chain is closed loop under the new brand, including Aishuo, Paijiotang, Paipai, overseas business and other sectors.
From the situation of the past two years, in addition to love recycling, zhuanzhuan, xianyu, recycling treasure and other second-hand mobile phone trading platforms have obtained financing, and behind it also flashed Tencent, Alibaba, Jingdong, 58.com and other Internet giants.
The potential is huge and the track is crowded
Another reason why the second-hand mobile phone market is favored by many giants and capital is that there are only three and a half categories of the second-hand mobile phone market with industrial integration opportunities, including second-hand houses, second-hand cars, second-hand mobile phones and second-hand luxuries of half categories.
Chen Xuefeng, CEO of Love Recycling, believes that the whole second-hand market should be viewed from three dimensions. The first is the size of the market. At present, the second-hand house and second-hand car market has reached trillion-level, while the second-hand mobile phone market has reached trillion-level in China, but from a global perspective, it also reaches trillion-level market scale.
Secondly, it is the depth of the industrial chain, that is, there are not enough opportunities for industrial integration. In the above three half categories, the link that can be integrated is more. Among them, the gross margin of the traditional industrial chain of second-hand mobile phones is more than 50%. There are many links and participants, and the efficiency is very low. Therefore, there are many opportunities for industrial chain integration.
Third, from the perspective of the stability of supply, the supply of second-hand houses and second-hand cars is relatively stable as rigid demand products, while the conversion rate of second-hand mobile phones as non-rigid demand products is not very high, but the base is large, the supply of the whole supply is relatively stable, and the customer unit price is also high.
The development space is huge, attracted many players to enter the game naturally. It is understood that the current market in addition to turn, idle fish this kind of comprehensive platform, there are dozens of large and small mobile phone recycling vertical players, such as love recycling, recycling treasure, flash recycling, love exchange machine, music recycling, easy machine network, repurchase network, good net, machine friends network and so on.
At the selling end, we mainly focus on Coke Youpin and Zaijin Machine, both of which adopt B2C mode to effectively control the product quality and provide after-sales service. The difference lies in that Coke’s superior product adopts full self – operation mode, and looks for beautiful machine mainly to take goods directly from offline suppliers.
Xianyu and Zhuanzhuan mainly use the C2C model, matching individual sellers and individual buyers directly, in order to eliminate the lengthy links in the industry.
At the recycling end, the main representative enterprise is Love Recycling. Founded in 2011, Aishuyu mainly adopts C2B and B2B models. It recycles mobile phones and other electronic and digital products through self-established channels (offline store recycling, recycling machine recycling, door-to-door recycling, express recycling, etc.). After quality inspection and classification by the operation center, Aishuyu will enter different downstream industrial chains according to different categories.
It is worth mentioning that, compared with other platforms, Aishuohu started the layout of the global market very early. As early as 2017, it invested in a mobile phone recycling company in India, and later in South America’s largest second-hand company, and has set up business lines in Hong Kong and Dallas in the US.
Xue-feng Chen said that, in the past China is a typical second-hand mobile phone importer, some second-hand iPhone main European and American markets via Hong Kong to enter the mainland, with the domestic mobile phone brand is getting stronger and stronger in recent years, more and more high-end products, from second-hand mobile phone importer into China is exporting countries, more and more domestic brands of second-hand mobile phone began to export.
Solve pain points and rebuild a “new order”
As the giants and capital compete to enter the market, the second-hand mobile phone trading market is increasingly popular, but the whole industry is lack of rules and order.
At present, the second-hand mobile phone trading industry still exists can not be ignored, the most prominent of which is that, because there is no unified national standard, the second-hand mobile phone pricing power is mostly in the hands of the “scalper army”, resulting in the second-hand mobile phone trading process in many links are opaque phenomenon.
In fact, once the mobile phone is used, even just open the packaging, it is determined to have produced different degrees of loss, and how to re-standardize these non-standard products, will become the biggest pain point of the second-hand mobile phone recycling industry.
Not only that, the shortage of goods has also been plagued by second-hand mobile phone recycling platform. In the past, due to the lack of convenient recycling scenarios and credible recycling platforms, consumers were reluctant to sell their second-hand mobile phones due to concerns about inaccurate recycling prices and information security. At the same time, due to the lack of efficient trading platform, many businesses cause scattered supply of goods and low trading efficiency.
Therefore, how to solve the problems of convenience, pricing, and the distribution of upstream and downstream goods has become the key to the development of industrial scale.
In view of this, some head second-hand mobile phone trading platform began to force, trying to use their own industry status and technical ability, to rebuild the “new order”.
In Chen Xuefeng’s opinion, how to build the supply chain capacity is the top priority for second-hand mobile phone trading platform to consider. It is based on this concept that Aihuishou continues to improve its supply chain capabilities, including enhancing automated detection capabilities, expanding online and offline recycling scenarios and services, and improving transaction efficiency.
At present, love recycling has set up a full coverage of online and offline recycling scene in C terminal. Online, Aishuo has precise channels with JD, Huawei, Xiaomi and other e-commerce companies and manufacturers. Offline, Aishuo has built more than 700 stores in more than 140 city core business districts. And in the B end, love recycling has also carried out a full scene, full transaction link layout.
Compared with the control of supply and product standardization, the quality inspection of second-hand mobile phones has the most problems. In the past, industrial quality inspection mainly relied on manual inspection, which was difficult and time-consuming. In view of this, love recycling independently developed Changzhou Asia No. 1 operation center, with the first non-standard second-hand electronic products automatic transportation sorting storage system in China, automation rate of up to 90%, error rate is less than 0.01%, the ping efficiency increased by 300%, greatly improving the circulation efficiency of the second-hand industry.
In addition, Aishuo also grades and prices each product according to quality inspection and big data, which makes non-standard second-hand mobile phones have a reliable standard and greatly improves the operation capacity and transaction efficiency of the whole platform.
The industry believes that it is under the leadership of the leading enterprises in the industry, the second-hand mobile phone trading market is evolving from the original extensive development to the standardized direction, the “old order” is being overturned, and the “new order” began to rebuild.