“Popular response” picker.
In a digital franchise store in Liaoning, a customer came and named a 64G second-hand iPhone X. The new product sells for more than 6000, but the used price is only 3,500 yuan. The boss asked the customer to leave a deposit and a phone call. After confessing to him for a week, he took the goods.
More than 3,000 kilometers away from Huaqiangbei, Shenzhen, “Backpacker” Xiao Zhan received a call from the shop owner and added a 64G iPhone X to his purchase list. In the end, the second-hand Apple phone, which was first collected from Zhengzhou stores, was transferred to Huaqiangbei by the hands of cattle, and was then brought back to Liaoning by backpackers.
In 2019, the domestic market has nearly 400 million new mobile phone shipments. With a smartphone penetration rate of over 96%, more than 90% of new mobile phone sales are due to people’s replacement needs. The old phones that were replaced have a different destiny. Part of it is lying in the drawers of millions of households as a “spare machine” and left idle; the other part is sold by the savvy owner and enters the market for used mobile phones.
The “offline world” of second-hand mobile phones
In the “Second-hand Mobile Phone Industry Research Report” released in 2019, it was pointed out that the online rate of second-hand mobile phone transactions is only about 20%, that is, more than 70% of second-hand mobile phone transactions are completed offline.
Theoretically, second-hand mobile phones are non-standard products. There is a technical barrier to the quality inspection of ordinary consumers. Online third-party platforms or service providers are required to do credit endorsement to provide quality inspection and after-sales services. But it is undeniable that the inherent consumption and cognitive habits of users limit the online purchase behavior of second-hand mobile phones. A more common scenario is: Consumers take their own faulty mobile phone to a nearby store for repair, and when they learn that it cannot be repaired or the cost of repair exceeds the psychological expectations, they buy a second-hand mobile phone.
Another reason is that although platforms that can trade second-hand mobile phones are sinking the market, such as the growth of the second-hand transaction network in the third quarter, the increase in new users in cities of three, four, five, and below , Which has accounted for 49% of the overall increase, but their awareness in the first- and second-tier cities is still higher than in third- and fourth-tier cities. .
These phenomena have led to widespread offline stores, which are still the main sales terminals for second-hand mobile phones. According to Xiang Changfeng, co-founder and vice president of Zhuan Zhuan, there are about 1 million merchants in the second-hand mobile phone-related business in China throughout the industry chain.
A single small-scale merchant offline cannot achieve a balance between supply and demand. Under the “adjustment” of a large number of cattle, local communication markets have become local distribution centers for second-hand mobile phones. At the same time, there are also differences in supply and demand between regions for second-hand mobile phones. Shenzhen Huaqiangbei has become a national distribution center for second-hand mobile phones with its leading position in the electronic business world and strong technical strength.It has become an offline circulation mode with a small regional circulation centered on the local communication market and a national large circulation centered on Shenzhen Huaqiangbei.
A significant proportion of second-hand mobile phones are digested in the B-end circulation, but the problem is also obvious. The first is the increase in costs brought about by many circulation links. From stores to oxen, backpackers, and offline retailers, on complex transaction chains, even if the profit of each link is not high, it will inevitably increase the cost after many rounds. For example, when the second-hand mobile phone collected from Zhengzhou was detoured to Huaqiangbei and brought back to Liaoning by the hand of backpacker Xiao Zhan, its cost has increased by hundreds of yuan.
Secondly, information asymmetry reduces circulation efficiency. In the second-hand mobile phone industry, peers often exchange information on supply sources, but they are often confined to one place. Exchanges across provinces and regions have plummeted. Millions of merchants do not have a unified platform or channel for information.
In addition, the inconsistent standards among B-end merchants have also hindered the development of second-hand mobile phone offline transactions. Zhuan Zhuan co-founder and Xiang Changfeng introduced that second-hand mobile phones will be divided into different levels due to different usage time and degree of wear and tear, corresponding to different prices, and localities have their own standards. For example, in Huaqiangbei, mobile phones with good functions and can directly sell C-end phones are divided into four categories: charging new, beautiful, small flowers, and big flowers according to the degree of old and new. According to Xiang Changfeng, “charging new” mobile phones are in the best condition, almost comparable to new phones, “beautiful phones” are second, and “small flowers” and “big flowers” have bumps, but to varying degrees. Inconsistent standards increase communication costs and restrict the flow of used mobile phones between different regions.
The “Popular” Picking Man
If you have pain, you have a chance.
In November 2019, the second-hand trading platform transferred to online supply platforms such as Flash Recycling, Yueyue, Yipin and other head supply chain companies, as well as major local recyclers and channel dealers in key mobile phone circulation areas across the country. Established the company and launched the B2B second-hand trading platform “Picking Man” with the goal of providing to B services for the upstream and downstream of the industry chain. After a month, Zhuanzhuan announced an agreement with an important player in the second-hand mobile phone industry to find Liangji and sign a contract, to find Liangji to invest in the stock picker. At this point, there are 15 shareholders in the “Purchasing Man”, including transfers, and it has become an alliance.
This is also very easy to understand why the picker will attract the top players in the industry to form an “alliance”. In addition to the shareholders of the purchasers, Flash Recovery is invested by Xiaomi and has a high-quality supply of used Xiaomi mobile phones; Yipintaoke and Yueyue hold second-hand mobile phones, especially Apple ’s mobile phones. ; Various local recyclers and channel dealers also have local quality resources.
Including the latest search-seeking machine that has joined the “Mania” of the purchaser, it was founded in 2015. It is mainly based on the B2C model and is also one of the strong players in the second-hand mobile phone industry. It is reported that, just a few months before the launch of the picking man, Zhaoliang also intends to set up a B2B platform, but after learning that the picking man was established, CEO Wen Yanjie of the looking machine found a researcher in Shenzhen Huaqiangbei Xiang Changfeng, after two hours of communication, quickly finalized the matter of looking for a good investment in stocks and joining the purchaser “Alliance”.
In fact, it’s not just looking for a good machine. Many players in the second-hand mobile phone industry have thought of setting up a B2B platform. There are not a few of them in practice, but they are not too loud.
As the controlling party of the purchaser, Zhuanhuan can take the lead in accomplishing this. It has an inherent identity advantage: the positioning of the third-party platform does not form a competitive relationship with other recycling merchants, so it can attract a mass of quality Sources and head players with recyclability are added. More importantly, as one of the leading platforms in second-hand e-commerce, Zhuanhuan has been intensive in the field of second-hand mobile phones for many years, and already has a mature mobile phone quality inspection service system, which can be migrated to the purchaser, for Establish standards for B2B platforms.
The vice president of Zhuan Zhuan and Xiang Changfeng also said that at present, “Purchasing Man” has formulated a set of B2B circulation standards. Sellers on the platform can publish products based on SPU pricing, buyers can order bids based on price, and post purchase requests. demand. In terms of quality control, the platform provides performance inspection services such as quality inspection. “After more than a month of running-in, we have confirmed that the goods on the platform of the picker should be checked by Zhuanzhuan and the picker, which is to control the quality from the source supply.” Xiang Changfeng said.
The scale and influence of the industry are also sources of appeal for the League of Goods. According to Aurora’s Q3 2019 Mobile Internet Industry DataAccording to the “Research Report”, from the DAU of the second-hand e-commerce App in September, it has reached an average of 2.693 million, far exceeding the vertical second-hand mobile phone platform. With the Internet network effect becoming more and more obvious, users and Traffic will increasingly concentrate on the head platform.
Another reason everyone says is unbelievable is that it is easy to set up a B2B platform, but difficult to promote. In order to enter the recognition of millions of offline merchants, it is necessary to stimulate marketing activities and expand the offline team step by step. From the perspective of the entire second-hand mobile phone industry, the rapid completion of the 300 million USD B round of financing in September 2019 not only proves that Because the second-hand track and its own business model are the capital confidence, it can obviously give the purchaser strong financial support.
Under the blessing of many advantages, it is reasonable that the picker can attract many head players to join the stock. The purchaser summarizes his functions into: gathering industry information, providing stores, providing connection services between B-end merchants, and providing standardized services including quality inspection. Regarding the investment and investment in the company, Xiang Changfeng also bluntly said: Finding an important partner like Liangji to join also means that an effective supply chain system can be established between the B2B platform and the B2C platform.
The two ends of the connection service correspond to the supplier of second-hand mobile phones and the seller of the store. With sufficient supply, it also needs to connect with millions of merchants and open up exports. When discussing this matter with reporters, Xiang Changfeng was relatively relaxed: “In the first and second-tier cities, merchants are mostly concentrated and distributed around the local communication market, and we will have corresponding promotions to reach stores. And we are also familiar with this circle. After switching in from some merchants, everyone will spontaneously communicate and communicate through the community. From the current point of view, this is the case, and it is very effective. “
In contrast, establishing a standard for second-hand mobile phones is regarded by Xiang Changfeng as the biggest challenge facing buyers, and it is also the key to the success of B2B platforms. The essence of the “Purchasing Man” model is to match up transactions. To break through regional barriers and open up the national market, so that buyers and sellers can implement efficient and high-frequency batch transactions on the “Purchasing Man” platform. According to the standards accepted and used by merchants in various regions, buyers and sellers issue supply and demand information in a standardized manner in accordance with platform rules.
People’s front-end team currently has less than 100 people, but it runs smoothly. This is mainly due to its current payment system and quality inspection system relying on a mature mid-stage system. Xiang Changfeng revealed that Zhuanhuan now has 66 quality inspection items for second-hand mobile phones, which are divided into more than 30 levels according to the quality inspection results, but for the purchaser, too many levels of division will make small and medium businesses on the platform Not very adaptable, especially in the early stage, the standard needs to be as simple as possible, and it must be divided by the grading language applicable to B-end merchants and stores.
According to Xiang Changfeng, the picker has internally reduced more than 30 standards to three levels of A, B, and C. The A-level fineness function is intact, and the B-level is intact but the color has some effects. Class C is tradable. The first step is to popularize the standard, and then “decide whether to extend based on the scene.”
National unified distribution standards can greatly reduce transaction communication costs and improve circulation efficiency. At the same time, it also guarantees the quality of the goods on the platform. After standardized quality inspection and screening, the goods suitable for retail to the C-end are on the platform. The end merchants circulated first.
Build a B2B online store
Aurora ’s data report shows that second-hand e-commerce has entered the high-growth TOP10 of the Internet segment industry, and the industry penetration rate has increased from 7.9% in September 2018 to 12.8% in September 2019. The user use time has also increased year-on-year. .
At the same time, in the field of commodity retail, second-hand mobile phones have become the third largest category after second-hand houses and cars. The data shows that on the day of Double 11 in 2019, the transaction volume of Zhuanzhuan increased by 72% year-on-year. Among them, the second-hand mobile phone is the category with the largest search volume among Zhuanzhu users, and it is also the category with the largest transaction volume.
But in general, the second-hand mobile phone transaction is actually on the eve of the outbreak.
On the one hand, the rising price of new phones has brought about an increase in residual value, which has promoted the circulation of second-hand mobile phones. On the other hand, the 5G era is coming, but the industry predicts that a large proportion of 5G coverage will take at least 5 to 7 years. And, the pace must be first and second tier cities leading, followed by third and fourth tier cities, and then more extensive and comprehensive coverage. Accordingly, the pace of 5G mobile phones replacing 4G mobile phones will also remain the same. In this upcoming wave of phone replacements, mobile phones that have been replaced in first- and second-tier cities will have greater potential to flow to third-, fourth-, and lower-tier cities, leading to a rise in the transaction volume of used mobile phones.
For now, trust and standards are the two major bottlenecks restricting the development of the used mobile phone trading market. The former is mainly in the C2C mode. Buyers and sellers are concerned about issues such as mobile phone quality and privacy data, and the latter is also urgently to be resolved during the B-side transfer process.
Switch to the C2B2C model to resolve trust issues and provide intermediary performance services, including quality inspection and warranty of second-hand mobile phones, issue third-party reports, reduce user bargaining costs, and improve transaction efficiency. Now, it is obvious that Zhuanzhuan hopes that the buyer can replicate this model and build a quality suitable for the B2B platform based on the original quality inspection system.Inspection standards, thereby accelerating the flow of quality supplies, shortening the transaction link, and improving the efficiency of B-side circulation.
The relatively mature quality inspection system that Zhuanhuan spent over 3 years can help the purchaser save a lot of energy in the initial stage. However, Xiang Changfeng also admits that the B2B platform requires different carrying capacity and higher timeliness. Therefore, in the future, the purchaser may establish a centralized test center centered on the urban communication market in the country. Twenty or thirty, covering major communication markets.
The purchaser’s inspection center can not only inspect and classify the quality of used mobile phones, but also provide unified value-added services such as warranty and after-sales services to help merchants speed up the circulation of goods.
According to Xiang Changfeng’s vision, the purchaser will paste the QR code on the back of all the mobile phones that have been detected by the platform. After the mobile phone is sold in the store, the C-end consumer can scan the code to view the inspection report and receive the corresponding Warranty, which is equivalent to providing a credit endorsement for the store, so that the C-end consumer decision need not be limited to the trust of the store owner personally. In addition, the purchaser also provides a unified red outer packaging, giving consumers a similar experience in buying new products in details.
The improvement of the consumer experience has accelerated the speed of sales conversion, and the quality assurance service has also helped store owners reduce the pressure on after-sales. Xiang Changfeng revealed that previously in Fuzhou, Fujian, the picker had found some stores with local partners for pilots. After the pilot, many store owners were even willing to pay a premium of 200 yuan for each mobile phone. In Xiang Changfeng’s view, this is the value brought by the picking platform as a platform to provide intermediary performance services.
By matching supply and demand in the upstream and downstream of the industry chain, the purchaser can not only help large suppliers and recyclers to efficiently bulk goods, but also help stores obtain first-hand high-quality sources of goods, reduce costs and increase profits, and improve the C-end consumer experience . The improvement of the C-end consumer experience in turn strengthened the store’s dependence on the platform, increased the stickiness of suppliers, and eventually formed a virtuous circle.
Xiang Changfeng predicts that at the to C end, the online rate of second-hand mobile phone transactions will reach or exceed 30% in the future. The offline market space is still broad. At present, the biggest impact on market volume is the lack of uniformity. Circulation standards. If the purchaser can establish a national second-hand mobile phone industry chain circulation standard,