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Zhitong Finance APP learned that Huatai Securities issued a research report that the second-hand e-commerce market is expected to achieve relatively resilient growth on the basis of the gradual recovery of the domestic consumer market and become one of the important circulation channels for consumer goods in my country. The second-hand e-commerce track is optimistic about its medium- and long-term development space and resilience in China. Young groups and sinking markets may be important driving forces for the continued development of China's second-hand e-commerce market. The reduction of trust costs is still a key factor. On this basis, China's second-hand e-commerce platforms are expected to benefit from the enrichment of both supply and demand and enjoy improved profit margins. At the same time, the layout of refurbishment business of high-value goods is expected to further enhance its position in the industrial chain and open up profit margins.

Trend: Rational consumer psychology provides structural opportunities, but supply and demand matching is still the core driver of industry development

Judging from the development trend of the Japanese and American markets, the second-hand economy and the consumer market (mainly primary) have not formed a significant substitution or negative correlation, but the market size growth rate continues to lead the consumer market (Japan: 2012-2022; the United States 2016-2020), indicating that although it has no significant counter-cyclical properties, it is relatively resilient. This is mainly due to the mature second-hand circulation market. Under the rational consumption trend, it is expected to accelerate the circulation of second-hand goods, supporting the growth rate to significantly exceed the consumer market. As for the Chinese second-hand e-commerce market, it is believed that the increasingly rational consumption trend is expected to provide certain structural opportunities, but the long-term growth center of the industry still depends on the improvement of the efficiency of matching supply and demand in the industry, and the price game on the buying and selling side may be the key point, that is, the consumer psychology on the demand side pays more attention to cost-effectiveness and dilutes the concept of "buying new instead of old"; the psychological pricing of sellers on the supply side gradually shifts from sunk costs/original value of goods to realizable value/residual value of goods. This trend is expected to be gradually realized after the consumer income steadily increases and the number of high-quality goods reaches the threshold of personal life. At the same time, the relative changes in supply and demand will also determine the medium- and long-term profit margins of second-hand e-commerce platforms.

Pattern: Multiple modes coexist, and platforms have differentiated positioning to meet the diverse needs of consumers

There are many participants in China's second-hand e-commerce market, and currently two distinct business model paths have been formed: 1) Platforms represented by Wanwu Xinsheng and Zhuanzhuan are mostly concentrated in the C2B2C model, with a relatively heavy operation model, committed to solving the standardized pricing and information opacity of high-value second-hand items, and seeking to solve the pain point of user trust; 2) Platforms represented by Xianyu are mainly based on the C2C model, with a relatively light operation model, emphasizing community attributes, focusing on the secondary circulation of medium and long-tail non-standardized goods, and committed to meeting the diversified and layered second-hand goods purchase needs of consumers, and seeking to establish a "shopping" mentality. At the current stage where the penetration rate of second-hand e-commerce is still rapidly increasing, the two models have their own characteristics, meet different consumer needs, and complement each other to jointly promote the prosperity and development of China's second-hand e-commerce market.

Policy: The "old for new" policy accelerates the development of the industry, and e-commerce platforms may play an important role in taking over

The 2024 trade-in has been mentioned in many important political meetings. In March, the State Council, the Ministry of Commerce and 14 other departments jointly issued the action plan for this round of "trade-in". Compared with the previous rounds of home appliance promotion in rural areas, thanks to the development of socialized logistics capabilities and the improvement of second-hand e-commerce platforms in one-stop trade-in and integrated disposal capabilities, it is expected that online e-commerce channels will play a more significant role in this round of actions. At the same time, the supply of second-hand goods brought about by the demand for trade-in is expected to further promote the optimization of industry supply, and play a certain catalytic role in the construction of user mentality on the demand side.

Outlook: The road ahead is long but bright

We are optimistic about the medium- and long-term development space and resilience of the second-hand e-commerce track in China. Young groups and sinking markets may be important driving forces for the continued development of China's second-hand e-commerce market. In the process of rapid development of the industry, the reduction of trust costs is still a key factor, such as the expansion of offline formats and the integration of live broadcast formats with Chinese characteristics, which may become effective tools. On this basis, China's second-hand e-commerce platforms are expected to benefit from the enrichment of both supply and demand and enjoy improved profit margins. At the same time, the layout of refurbishment business of high-value goods is expected to further enhance its position in the industrial chain and open up profit margins.

risk warning:The progress of consumer mind building is slower than expected; competition in the second-hand e-commerce industry is intensifying.