Young Chinese consumers seeking budget-friendly purchases drive sales

China's secondhand goods transaction market is poised to see speedy growth in the coming years as young consumers nationwide trend toward lifestyles more environmentally friendly and are increasingly keen on buying more budget-friendly goods via secondhand trading platforms, experts said.

An increasing number of young consumers attach greater attention to low-carbon, sustainable consumption, with higher acceptance of used merchandise, said Ding Jian, president of Xianyu, Chinese tech heavyweight Alibaba Group Holding's online trading platform for secondhand goods.

Ding said the number of users on Xianyu has risen more than 20 percent year-on-year in two consecutive quarters, and he is bullish on the development prospects of China's secondhand products sector.

"At present, the penetration rate of China's secondhand goods market only stands at 5 percent, while in some developed countries, the figure can reach about 20 percent," he said.

It is noteworthy that the post-95 generation of consumers account for about 60 percent of total users, and have shown vibrant purchasing power for secondhand products purchased online, including through shopping vouchers and video-streaming website memberships, Ding said.

He said Xianyu will continue to expand its customer base, especially in smaller cities, improve digital capacities, speed up its layout in offline recycling channels and explore new transaction models for used merchandise.

"The circulation and reuse of secondhand items can reduce carbon emissions due to the production of new goods," he said, adding that the company expects to serve more than 1 billion users and help drive carbon emission reductions of more than 55 million metric tons by 2030 by leveraging its advanced digital technologies.

Launched in 2014, Xianyu has become one of the largest online trading platforms for used goods in China, with accumulated users reaching over 500 million. More than 4 million such products have been posted on the platform every day.

China has stepped up efforts to spur the circular economy and bring about a more efficient utilization of resources during the 14th Five-Year Plan period (2021-25).

According to the National Development and Reform Commission, the country's top economic regulator, a resource recycling industry will be established and a comprehensive resource recycling system will be completed by 2025.

More efforts will be made to encourage the development of the "internet plus secondhand" model, strengthen the management of online trading platforms, and provide standardized and regulated services for secondhand goods trading, said the NDRC.

The transaction volume of China's used goods market surpassed 1 trillion yuan ($139.9 billion) in 2020, and is expected to reach 3 trillion yuan in 2025, said a report issued by the Institute of Energy, Environment and Economy of Tsinghua University.

Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy, said the country's secondhand goods market, which is still at a nascent stage, has huge growth potential and the penetration rate of online recycling and trading platforms is still relatively low.

"The booming sharing economy and changing consumption habits and concepts that are greener and more sustainable have stimulated massive growth of the secondhand economy," Mo said.

She added that sellers have more information than buyers before transactions occur on secondhand platforms, which may result in the appearance of some fake and inferior quality products and fraudulent behavior during transaction processes.

"How to deal with the above issues and establish mutual trust between sellers and buyers is key to the healthy development of the secondhand market," Mo said.

Zhu Wei, deputy director of the Communication Law Research Center at the China University of Political Science and Law, said that in order to better regulate the emerging sector, online secondhand platforms should increase investment in after-sales services, carry out third-party identification aimed at some used goods with high value, and promote insurance coverage options for secondhand items.

fanfeifei@chinadaily.com.cn