The mobile phone recycling market is ending a single business model, and recyclers are exploring diversified profit-making methods. From the business model, the recycling business will develop a service form that integrates with recycling-repair-sell-rent; from the business category, Mobile phones are expanding into consumer electronics such as home appliances, computers and pan-smart terminals.
It was learned that the mobile phone post-market integrated service platform flash recycling announced that it had completed the B1 round of financing. The investors and financing amount were not disclosed yet, and Qingtong Capital acted as the exclusive financial consultant. Previously, Flash Recycling received a nearly 100 million A round of financing from Xiaomi and Shun Capital. Liu Jianyi, founder and CEO of the company, said that the financing will be mainly used for supply chain construction, new product development, marketing and other aspects.
Flash Recycling was established in May 2016. It is a smart recycling and recycling company engaged in the mobile phone aftermarket. The business covers recycling, screensavers, rental machines and excellent products. The company’s core team comes from the mobile phone industry, second-hand mobile phone industry, mobile Internet, logistics supply chain and other fields.
At present, the domestic mobile phone recycling market presents two major trends: on the one hand, mobile phone recycling is still in a period of rapid growth, and the annual average recycling rate is growing at a rate of about 30%; on the other hand, the mobile phone recycling market is sinking, The growth rate of fourth-tier cities began to accelerate. The reason for this trend is mainly due to the slowdown in global mobile phone shipments, major brand manufacturers are facing the pressure of new machine sales, and mobile phone recycling and trade-in has become the driving force of new machines after the mobile phone staging. A new power; in addition, the mobile phone recycling market has completed the channel education stage, the concept of mobile phone “trade-in” has become popular, and user acceptance is high.
Based on the high-speed development of the mobile phone recycling market, Flash Recycling currently has more than 100,000 offline stores in the country, basically completing the market coverage from the T1-T6 level, and recycling more than 150,000 mobile phones per month. Cooperative customers include mainstream manufacturers such as Apple, Xiaomi, Huawei, Samsung, OPPO, and VIVO. In the first three quarters of 2019, the company’s main business scale doubled.
About the reasons for the key layout line, company CEO Liu Jianyi said, The online recycling process is standardized, and the whole process often has two problems: one is that the customer needs to send the mobile phone first, then collect the money, logistics. Long time, this requires customers to have a high degree of trust in the recycling platform; second, the customer’s estimated price and the actual recycling price are easy to form a gap, affecting the customer experience. And the main battlefield of the new machine sales online, more than 75-80% of new machine sales per year is offline. The advantage of offline recycling is that the channel is mature, and customers are more likely to accept the “old-for-new” approach while avoiding logistics time and costs. Therefore, offline recycling has also become a major competitive advantage of flash recycling, but many recyclers on the market today use online and offline integration methods, such as love recycling (established in 2011) and recycling treasure (established in 2014).
The vast and scattered stores are important traffic portals. More than 100,000 mobile phone stores have more than 10 million passengers per day. CEO Liu Jianyi said that online and offline integration is also the future development direction of flash recycling. The realization of power to realize the flow is the key development direction of the mobile phone aftermarket.
Recycling Process
In terms of profitability, the current price difference of mobile phone recycling platforms is very small. In the long run, it is difficult to maintain this profit model from recycling to sales. This is also a common problem in the industry. CEO Liu Jianyi said that the current mobile phone recycling market is changing from 1.0 mode to 2.0, which not only changes the current single business model, but also develops into a diversified profit mode. From the business model, “flash recycling” will develop a recycling-repair-sale-rental integrated service form; from the business category, it will be expanded from mobile phones to consumer electronics such as home appliances and pan-smart terminals.
Understand that Flash Recycling began to do home appliance recycling business in July 2019. According to statistics, at present, the number of home appliances in Chinese households is more than 1.6 billion. According to the annual replacement rate of 1-2%, the scale of home appliance recycling market has reached hundreds of billions. In addition, the National Development and Reform Commission recently issued a plan for the promotion of the promotion of automobile, home appliances, consumer electronics products and the promotion of circular economy development (2019-2020) (draft for comments). Among them, it is proposed to carry out the “old-for-new” activities of home appliances, and encourage consumers to update all kinds of home appliances that are high in energy consumption and low in safety. Different from mobile phone recycling, recycling household appliances have low residual value, high logistics costs, and scattered markets. In the past, home appliance recycling relied mainly on cattle and self-employed businesses. In the future, flash recycling will focus on recycling household appliances. The overseas low-end consumer market will be the main source of customers.