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This is a key step in Xianyu’s commercialization journey.

Text | Yi Tong

Edited by Chen Meixi

A few days ago,Xianyu officially announced that it has bid farewell to the free era.

Starting from September 1, 2024, a basic software service fee of 0.6% will be charged to all sellers (up to 60 yuan per transaction). At the same time, only for sellers with more than 10 orders and a cumulative transaction amount of more than 10,000 yuan in the same natural month, a software service fee of 1% of the actual transaction amount will be charged for each order beyond that.

As soon as the news came out, netizens were furious. Some people called it "ugly", but others thought it would have little impact. In fact, it took Xianyu more than a year to reach the stage of "full charging". In June last year, Xianyu had already sent out a signal to start charging service fees to sellers with high frequency and high transaction volume.

As a second-hand e-commerce platform, Xianyu was founded in 2014. Official data shows that the number of Xianyu users has exceeded 500 million, the number of monthly active users has reached 162 million, and the average daily GMV has exceeded 1 billion.

Various signs indicate that the 10-year-old Xianyu is already capable of "making money to support the family", and it is imperative to accelerate the commercialization of Xianyu.

The Shocked and the Protected

As soon as the new regulations came out, many Xianyu users believed that this move was a "punishment" against professional sellers.

From 2023 to now, Xianyu's charging behavior has been a series of continuous and consistent actions. From the perspective of guidance, increasing service fees can weaken the profits of professional sellers and squeeze their living space on this C2C idle trading platform.

It is a common phenomenon that professional sellers flock to Xianyu.

If a seller has a large inventory, a high order volume, and no price advantage for his products, then he is most likely a professional merchant rather than an individual seller of second-hand goods.

As a C2C platform, Xianyu maintains a balance between the interests of buyers and sellers. Unless there is a quality problem, once the goods are sold, they will not be returned or exchanged. At the same time, sellers do not need to pay a registration fee or deposit, and the threshold is much lower than other e-commerce platforms. Previously, some merchants moved their business to Xianyu in order to avoid being affected by e-commerce platform policies such as "refund only".

For Xianyu, although the influx of professional sellers has increased the number of sellers and the quantity of goods, it may not be a good thing in the long run.

The first thing to suffer is the buyer's experience.Some Xianyu users once exposed on social media that the products of Xianyu sellers were sent by other platforms, but the prices were much higher, and they took advantage of the information asymmetry to cheat buyers.

As a second-hand trading platform, the demands of Xianyu consumers are very clear: they want to exchange high-quality idle items for low prices and buy second-hand goods with high cost-effectiveness.

The massive influx of professional sellers has changed the original intention of idle transactions. If you can buy cheaper new products on other e-commerce platforms, why buy more expensive new products disguised as second-hand goods on Xianyu?

In addition, the living space of individual sellers will also be severely squeezed.Individual idle transactions rely on the platform's supply of commodity traffic, and individual sellers who trade in a single, occasional, low-frequency manner obviously cannot compare with professional sellers in terms of commodity quantity, commodity categories, transaction frequency, response speed, etc. Traffic squeeze is inevitable, and even worse, negative behaviors such as non-delivery, delivery of fake goods, and late delivery may destroy the trust ecology between buyers and sellers.

When a community is reduced to "fleecing the sheep" and "cutting leeks", there is no ecology to speak of. What will follow is the departure of a large number of users. After the loss of users, merchants will also change platforms, and commercialization is out of the question.

After the service fee is increased, the most affected are definitely professional sellers who have higher transaction frequency and more products. To some extent, the service fee policy that started last year has increased the operating costs of these professional sellers on Xianyu in disguise. From the motivation point of view, it is to let professional sellers return to the real e-commerce platform and leave Xianyu to real personal idle transactions. In this way, Xianyu, as an independent platform, will have more differentiated value within Taotian Group.

Although Xianyu’s big knife is mainly intended to “chop” professional sellers who cut leeks, most individual sellers who “let their idleness be” will not be greatly affected.However, for some special categories, especially users in niche culture and subculture circles, this policy may still bring additional financial burden.

Mianmian calls herself a "BJD doll lover". She often sells dolls on Xianyu. The price of a doll ranges from 2,000 to 3,000 yuan. Under the new policy, she needs to pay a handling fee of 12 to 18 yuan to Xianyu. "Although it's not much, this amount of money is as devastating as the shipping fee." Mianmian said.

Huang Li, a "grain eater" who has been hanging around Xianyu for many years, described the incident as a "big explosion in the grain circle." Each card costs 5 yuan, and even if the handling fee is included, it is only 5.3 yuan, but he does not want to bear this part of the cost for the seller.

Image source: Xiaohongshu user @最后再吃一个谷

He toldHedgehog Commune (ciweigongshe)After the announcement, there was a debate on social media about who should bear the handling fee. Huang Li said: "Now the conflict between the platform and users has turned into a conflict between buyers and sellers."

To a certain extent, this also shows from the side that Xianyu is not only a trading platform for second-hand and idle goods, but also an interest trading community that gathers like-minded people.

From the user portrait, the post-95s are active users of Xianyu. Last year, there were 30 million new post-95s users on the platform. Data shows that in 2023, the post-95s users of Xianyu earned 2,700 yuan per person. This shows that the subculture circle composed of young people has become a new force in the Xianyu community.

Therefore, the granularity of the current charging policy cannot be fully adapted to the complex ecology of Xianyu. Perhaps, for sellers of different categories, the platform management and charging policies should be further refined.

The intersection of community ecology and commercialization

When Xianyu officially announced that it would charge no difference in fees, an interesting phenomenon was that more and more software claiming to be Xianyu alternatives took the opportunity to do a marketing campaign. For example, the second-hand trading platform "Qiandao" and even the APP "Wuyuan" which has not yet been officially launched are active in related discussions.

Image source: Xiaohongshu

However, there are endless posts on social media to avoid these platforms. Users generally say that these platforms have serious price cuts, less traffic than Xianyu, and poor user experience. In comparison, Xianyu is backed by Alibaba, has more credibility, relatively complete services, and more diverse products. Therefore, the service fee issue is not enough to make sellers leave Xianyu.

Mianmian told Hedgehog Community: "Xianyu has more traffic than other platforms. Although there are handling fees, I will not leave Xianyu."

Service fees/handling fees are nothing new, and they are common on e-commerce platforms. From the statistics of Internet transaction platform handling fees, different platforms have different charging standards, but Xianyu's 0.6% fee standard is considered affordable among many platforms. The service fee of Douyin merchants is between 1% and 5%, and the specific value depends on the category.

Just the day after the official announcement of the undifferentiated charging policy, some users found that Xianyu had quietly restarted its web version. Currently, the main page of Xianyu's web version is roughly divided into three parts: category navigation, key categories, and interest channels. Taobao's website manager "Kongwu" also revealed that this is only a preliminary version, and in the future the PC version will be able to complete the entire chain from communication to transaction between buyers and sellers.

For the platform itself, equipment maintenance and operation require costs, so from a business perspective, Xianyu’s charging policy is an inevitable transformation.As the platform continues to expand and operating costs increase, Xianyu needs to find new profit models to maintain its sustainable development.

By charging a certain percentage of service fees, Xianyu can not only cover operating costs, but also bring a stable source of income to the platform. This is Xianyu's active exploration on the road to commercialization. According to public data, Xianyu's average daily GMV has exceeded 1 billion. According to rough estimates, Xianyu will receive millions of service fees every day. For Xianyu, whose commercialization still needs to be accelerated, this is certainly a "stable happiness."

With limited monetization models,Increasing service fees can not only regulate some professional sellers, but also generate income for Xianyu. It is the "balance point between community ecology and commercialization" that Xianyu has found at this stage.

As Mianmian said, most sellers will not give up Xianyu because of the introduction of service fees. What needs to be asked more is, what optimizations can Xianyu, which charges service fees, make in platform ecological governance and product iteration to truly provide better services to both buyers and sellers?

Users are the core of the community. Xianyu needs to pay more attention to user needs and experience while implementing its charging policy. For example, the platform can optimize algorithms to provide more accurate recommendation services and reduce users' transaction costs; it can also strengthen community management, combat false transactions and fraud, and enhance user trust. And those gray areas hidden under the "code" should really be kicked out of the platform.

These are the problems Xianyu needs to face, and they are also challenges at the intersection of community ecology and commercialization. In this process, Xianyu needs to constantly listen to the voices of users, understand their needs and expectations, and also pay attention to the changes and competitive situation in the second-hand idle trading market. Only in this way can Xianyu find the best dynamic balance point at the intersection of community ecology and commercialization, and ultimately achieve a win-win situation for the platform, sellers, and buyers.

Charging policy is a complex and delicate issue, which involves the commercial needs of the platform and the protection of the community ecology. Through this policy, Xianyu has demonstrated its efforts and explorations between maintaining the community ecology and achieving commercial goals. Of course, this is just the beginning.

(Mianmian and Huang Li are pseudonyms in this article)

References:

1. Beijing Business Daily "Xianyu's daily average GMV exceeds 1 billion yuan, and financial consulting transaction volume increased 280 times year-on-year"

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