news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

In recent years, with the rapid rise of the circular economy, Xianyu has become the most popular e-commerce brand among young people. However, recently, Xianyu suddenly announced that it would charge sellers. What is the purpose of Xianyu's action? What impact will Xianyu's charging bring?

1. Is Xianyu going to ask sellers for money?

According to China Economic Net, Xianyu has announced that it will charge all sellers a basic software service fee of 0.6% (up to 60 yuan per transaction). At the same time, for sellers who have more than 10 orders and a cumulative transaction amount of more than 10,000 yuan in the same month, a software service fee of 1% of the actual transaction amount of each order will be charged. The change will take effect on August 9 and will be officially implemented on September 1.

Recently, Xianyu was exposed to be hiding pornographic transactions. The "color transactions" on the platform using codes such as "Giant", "second-hand air conditioner", "coins", and "Apple card removal pin" have attracted attention. In response, Xianyu staff said that for similar cases, screenshots and chat records can be uploaded to report, and if the situation is true, the account will be blocked.

It is reported that in 2023, Xianyu's average daily transaction volume has exceeded 1 billion yuan, and the average daily active users have reached 36.68 million, of which "post-95s" account for 43%. Xianyu, Xiaohongshu, Bilibili, etc. have become the most popular mainstream e-commerce platforms among young people. According to the latest report from data platform QuestMobile, in April 2024, Xianyu's monthly active users have reached 162 million, a year-on-year increase of 19.1%.

On July 2, Xianyu President Ji Shan talked about his views on Xianyu offline stores in a media interview. Ji Shan said that Xianyu will make firm investments in offline stores in the next three years. He said that many people think that selling second-hand and unused goods is too troublesome, or that the prices of goods are too low to be worth listing, but in fact, the second-hand business cannot be separated from offline. This is something that cannot be avoided and will be done sooner or later.

2. What changes will Xianyu’s charging bring?

In the long history of e-commerce development, the adjustment of platform operation strategies is a common phenomenon. Recently, the news that Xianyu charges sellers has attracted widespread attention and discussion. What does this move mean? What changes will it bring to the Xianyu ecosystem?

First, with the development of the Internet economy, many platforms often adopt free strategies in the early stages to attract users and quickly capture market share. Xianyu, a second-hand trading platform under Alibaba, also adopted this strategy when it was first established. This approach helps to cultivate user habits, increase user stickiness, and quickly establish a large user base. However, when the market gradually matures and the user scale reaches a certain level, it becomes a natural trend for the platform to start considering profitability.

As a mature second-hand trading market, Xianyu has reached a considerable level of user groups and transaction volume. At this time, the platform began to consider making profits by charging service fees, which is an inevitable choice after the platform has developed to a certain stage. For the platform, charging fees can better maintain service quality, invest more resources in technology upgrades and service optimization, and thus provide users with a safer and more efficient trading environment.

Secondly, in the business world, no industry can always rely on the free model to survive and develop. Making money is one of the core goals of an enterprise. Only by achieving profitability can an enterprise continue to invest resources, improve service quality, and create greater value for users.

Take shared bicycles as an example. When they first appeared, in order to quickly occupy the market, various brands adopted low-price or even free strategies to attract users. However, with the intensification of market competition and the increase in operating costs, the price of shared bicycles has gradually increased. Today, users have a certain degree of awareness and acceptance of the price increase of shared bicycles.

This phenomenon reflects the general law of business development: in the early stage, low prices or free services are used to attract users and cultivate the market; after the market matures, reasonable price adjustments are made to achieve profitability and sustainable development. Xianyu’s charging measures also reflect this law.

Third, although Xianyu charging sellers is understandable in terms of business logic, this cost is likely to be passed on to buyers by some sellers. When sellers face additional expenses, they may increase the selling price of goods in order to maintain their profit margins. The possibility of passing on costs is higher for sellers with less fierce competition, unique products or high demand.

For example, if a seller originally planned to sell an unused item for 100 yuan, after Xianyu charged a 5% transaction fee, in order to maintain the actual income of 100 yuan, the seller might increase the selling price to 105 yuan. For buyers, this means that they need to pay a higher price to buy the same product.

However, not all sellers are able to successfully pass on costs. In a competitive market environment, buyers have more choices, and if a seller raises the price, buyers may turn to other sellers with lower prices. Therefore, sellers need to weigh market competition and buyer acceptance when deciding whether to pass on costs.

Fourth, for Xianyu, charging is an inevitable choice when the platform develops to a certain stage, but how to maintain user engagement while charging is a major challenge it faces. The key lies in finding a balance between charging and service value, and constantly innovating service models. The platform can improve user experience by providing higher-quality transaction guarantees, more convenient payment methods, more accurate recommendation mechanisms, etc., thereby offsetting the negative impact of charging. At the same time, through data analysis, in-depth understanding of user needs and launching personalized services are also important means to enhance user stickiness. In addition, Xianyu can also explore ways such as cooperating with brands and launching membership systems to provide users with more diversified value, and use charging as an opportunity to promote the platform's transformation to a higher level of service model.