Used goods sector a growing phenomenon

Market research firm IDC said global shipments of secondhand smartphones in 2019 totaled 206.7 million units, up from 175.8 million in 2018.

It added that the used smartphone market continues to rise and shows no signs of slowing down across all parts of the globe, with shipments expected to grow to 332.9 million units by 2023, with the compound annual growth rate reaching 13.6 percent.

Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy, said the country's secondhand 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 small.

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 added.

Meanwhile, the new business model has also encountered many problems. Mo noted that sellers have more information than buyers before transactions occur on these platforms, which may result in the appearance of some fake and inferior quality commodities and the occurrence of fraudulent behavior during transaction processes.

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

Apart from electronic devices, demand for used cars has been surging in recent years as China is the biggest global used car market and the largest manufacturer of automobiles.

According to a report from Research and Markets, the country's used car market is expected to reach $385 billion by the end of 2025. Chinese online used car dealing platforms including Uxin, Guazi.com and Renrenche are betting big on the burgeoning segment.

Dai Kun, chairman and CEO of Uxin, said internet-based sales channels overcome geographical restrictions of secondhand car trading so that consumers can easily choose high-quality/low-priced used vehicles.

Dai said Uxin has adopted stricter standards in selecting and inspecting used cars to ensure their quality and condition, improved on-demand services delivery and shortened waiting times between initial ordering and final delivery.

It has also launched a proprietary rating system that assesses and determines a used car's condition and also provides greater transparency to facilitate the decision-making process for customers.

"Used cars are big-ticket items and are often purchased once every few years. Consumers in China find that the purchasing process is often complex and too frustrating, and it is difficult to get consistent, convenient and high-quality service," said Dai, adding that online platforms are the most cost-effective and efficient way to buy used cars in China.

"Looking ahead, we will continue to enhance the quality of used cars as well as our online products and services offerings throughout the entire transaction process to maximize value for customers," Dai said.

Founded in 2011, Uxin offers B2C services. Its B2C platform－Uxin Used Car－provides consumers with customized car recommendations, financing, title transfers, delivery, insurance referrals, warranties and other related services.

The rapid growth of the country's secondhand resale market is due to huge market demand, said Zhang Li, director of the e-commerce research institute affiliated to the Ministry of Commerce. "With people's purchasing power rising, the demand for online secondhand transactions will gradually increase."

Zhang added the new economic model could effectively make use of resources, stimulate consumption potential and promote the emergence of a new industrial chain.

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