Author | Feng Yu
Editor | Egg Manager
When Shenzhen Huaqiang North turned into a cosmetics "shopping resort", where did those second-hand 3C go?
The business of the mobile phone recycling shop on the street is bleak. When the once powerful Zhongguancun Electronic Mall in Beijing closed, it is not difficult to find that the second-hand 3C business has long been the world of the platform "regular army".
For example, idle fish is mainly C2C mode, with a strong community atmosphere, where everything can be traded; Turn around and focus on 3C products, and become a leading enterprise in C2B and B2C fields after merging with "Looking for American Machines". More back to the second-hand 3C business upstream to do recycling business, love recycling, recycling treasure and so on.
In the early years, Huaqiang North was once a distribution center for shanzhai and refurbished machines. Nowadays, with the gradual transparency of the price of 3C products, the business of traditional scalpers and distributors is becoming more and more difficult. However, one thing that remains unchanged in this industry is that every drop of value of second-hand 3C will eventually be "squeezed dry", from recycling of second-hand 3C to testing, leasing, selling and even disassembling and refining metal elements.
Who needs second-hand 3C? With the influx of giants and capital, the cost of traffic is rising. What role is the traditional channel provider playing?
As a student, you may also have the experience of "saving your computer" in the computer city. Whether it's a second-hand mobile phone or used computers, it's very attractive to pay several thousand yuan less than the new one.
However, once young students enter the society, second-hand 3C seems to be excluded from their choice.
Especially in the golden age of Apple brand, young consumers in China looked up from knockoffs and low-priced machines, and were immediately attracted by this brand, which was different from other brands in aesthetics and product design. The ridicule of "selling kidney to buy iphone" reflects the madness that consumers are still flocking at a high premium, which is the era mark of electronic consumption in China in the past decade.
If electronic consumption is regarded as a symbol of personal taste and status, what does second-hand 3C mean? Whose needs are these products?
"From the B side, enterprises are emphasizing cost reduction, minimizing the upfront investment, and the frequency of equipment upgrading is relatively high. If second-hand equipment (computers) can meet the requirements from appearance to performance, enterprises are willing to accept it. " Wu, general manager of Bear U Rent Recycling Sales Center, an IT office equipment operator, told Entrepreneurship Frontier.
Bear U Rent provides IT industry chain services such as leasing, recycling, technical services, SaaS systems, etc. Bear Urent, its corporate IT equipment recycling business brand, has recycled more than 7 million IT equipment in the past three years.
In contrast, mobile phones have higher residual value than computers, so they are more popular at both B and C terminals.
Most companies that buy second-hand mobile phones are engaged in network celebrity incubation, WeChat business or brushing business. Whether it is buying or renting, it is very cost-effective for enterprises that need hundreds of mobile phones.
At the C end, more and more high-end domestic mobile phones also make the value of secondary mobile phones rise.
Whether it is Huawei, Xiaomi, or OPPO and VIVO that once focused on the sinking market, domestic mobile phones have embarked on the road of high-end. "The circulation cycle and elimination cycle of mobile phones are relatively fast, especially in recent years, the upgrading of mobile phones has reached a certain bottleneck. There is little difference in mobile phone functions between this year and next year, and it is easier to circulate in second-hand transactions. " Wu shows off.
At the same time, the high price of the second mobile phone also makes it sell well.
"The domestic consumer market is hierarchical and diversified." he ye, marketing director of recycling treasure, told Pioneering Frontier that besides consumers who are extremely fond of cost performance, some users who have the ability to buy new machines choose to buy second-hand Macs. "These consumers think that the price of the new machine includes brand, channel, marketing and other premiums, while the second mobile phone only pays for the product and does not need to pay the' IQ tax'."
Mobile phone retailer Zhu (pseudonym) also told Entrepreneurship Frontier that the general mentality of people with poor spending power to buy second-hand mobile phones is to "experience the best function with the least money". "If one person in 1000 people will buy a second mobile phone, it is already a consumer market with a large enough base." He said.
Of course, the high circulation rate of the second mobile phone also benefits from the trade-in policy of some mobile phone manufacturers.
"In recent years, the shipping pressure of mobile phone manufacturers has been increasing, and various new means are needed to drive the sales of new machines." He ye said that trade-in is one of them. "The price threshold of high-end mobile phones is high, and people may have price concerns when they consume. As a sales strategy, "trade-in" allows consumers to enjoy cheap prices and get a new mobile phone. This has greatly stimulated everyone's enthusiasm for trade-in, making many consumers willing to sell old and highly disabled mobile phones to second-hand channel providers or e-commerce platforms. "
According to CIC report, in 2020, the overall shipment of China consumer electronics market will be 538 million units. In the next five years, the consumer electronics market in China is expected to maintain a compound annual growth rate of 6.2%, and it is expected to reach 727 million units by 2025. In addition, a data from the Report on the Circular Economy Potential of Waste Electronic Products in China shows that the recovery rate of second-hand mobile phones in China is less than 2%, and the market space has yet to be tapped.
When the huge shipment of new machines meets consumers who like the new and hate the old, the second-hand 3C market in China as a whole will usher in an upward development period. How is this market developing at present?
In fact, in China 3C product recycling industry chain, the upstream supply mainly comes from individual consumers, mobile phone manufacturers and e-commerce platforms, the midstream includes offline trading platforms and online trading platforms, and the downstream is the second mobile phone circulation channel, such as leasing, resale or environmental degradation.
In the era of extremely asymmetric information, traditional channel dealers almost monopolized the second-hand 3C market-Shennan, Beijing. Large dealers generally take goods from Hong Kong, increase prices at different levels, and finally distribute them to the bottom dealers.
Zhu also said frankly: "Second-hand 3C is essentially a channel business.
In the past, in the second-hand 3C business, the traditional second-hand channel played an extremely important role, which was equivalent to the "capillary" of the market. For example, the early second-hand e-commerce platform had no traffic. These dealers of different sizes have been supplying the platform, and some of them still maintain a good relationship between supply and demand.
When Zhongguancun Electronic City declined, these retailers and distributors had a better place-the second-hand e-commerce platform.
Objectively speaking, the emergence of the second-hand e-commerce platform has made the back channel business more transparent.
The first is a stable supply of goods.
"From the recycling scene, we have maintained close cooperation with the head Internet company for a long time." Wu Xiuqi said, "These big factories have higher requirements for equipment, so the frequency of elimination will be faster." These second-hand equipment will generally be auctioned through third-party pricing or auction platforms. In this process, the second-hand trading platform has more advantages than small and medium-sized institutions in scale.
The premise of platform operation is obviously to recover the accurate traffic supply of such a low-frequency service. "In addition to cooperating with Tmall and Idle Fish, recycling treasure also cooperates with Huawei, vivo and HONOR manufacturers to trade in old ones and C2B recycling business, which can obtain very accurate scene traffic." He Wei said.
Of course, the nonstandard second-hand 3C once made the efficiency and reputation of C2C mode sink to the bottom.
Aware of this, some second-hand e-commerce platforms began to play the role of middlemen, such as providing inspection and consignment services for consumers and drawing from them.
For example, the earliest transfer mode was C2C, and then a series of YEATION, official inspection and guaranteed sale services were launched. Recycling treasure has formulated 57 quality inspection items for second-hand 3C products. In 2020, the first AI automatic inspection line "Tiangong Inspection Machine" was developed, and the machine quantity inspection has been realized. In addition, recycling treasure also launched a convenient and portable quality inspection tool for second-hand practitioners: money detector treasure.
After inspection and appraisal, where will these second-hand 3C go?
"Bear U Rent will classify recycled used 3C, such as notebooks, desktops, servers, etc. And then sold to large-scale second-hand 3C wholesalers, and another part of higher-value equipment will be leased to enterprises. " Wu Fangxiu said that about 20% of the products will flow to the leasing link, and the proportion of platform retail will account for 5%- 10%. Most of other low-end finished products will still be circulated to wholesalers.
For Bear U Lease, the payback period of high-end equipment leasing business is generally about 3 years. On the one hand, direct sale of second-hand 3C can reduce the purchasing cost of its leasing business, on the other hand, it can also improve the turnover rate of equipment recycling and sales, that is, cash flow, which makes the circulation of industry resources more efficient.
At present, it is common knowledge in the industry that B2B transactions are more efficient, so peer-to-peer transactions have become commonplace in the second-hand 3C market.
"The quality of goods in the second-hand 3C industry is less than 10% of the excellent products, which means that the sales directly to the C end are only about 10%, and the remaining 85% of the good products are basically for second-hand practitioners, and the last 5% of the defective products will be directly disassembled and refined." He Wei said.
According to Venture Frontline, although the gross profit margin of the second-hand 3C sales business in the industry is only 10%, it is not a profiteering business, but the huge domestic second-hand 3C market seems to have infinite appeal to players outside the circle.
According to CIC data, in 2020, the total turnover of second-hand consumer electronics in China reached 252.2 billion yuan, of which the GMV of mobile phone subdivision track reached 654.38+80 million yuan. It is estimated that the second-hand consumer electronics GMV in China will maintain a compound annual growth rate of 30.8% in the next five years, and it is expected to approach the trillion-dollar market by 2025.
However, although the second-hand 3C has a "gold mine attribute", it is not a low-threshold business.
For example, different platforms are "fighting in their own way" in the verification process, which once made the industry lack a unified implementation standard.
"First of all, the quality inspection level and standard setting of each platform will be different. Secondly, at present, the quality inspection of second-hand 3C is basically manual quality inspection, and manual quality inspection often exists in subjective differences between people. " He ye pointed out that this requires automated quality inspection tools to improve the automation level of the overall inspection and make the standards more stable and unified.
Zhu also said that there is a general lack of unified manual testing standards. For example, when an inspector looks at an old mobile phone and accidentally sees a relatively new one, he will score high. Then, this test result is quite accidental or subjective, which is unfair to platform users (especially traders) to some extent.
Therefore, different evaluation criteria directly increase the difficulty of evaluating products.
"The valuation between platforms will vary a lot. If there is a problem with the functional test after getting the product, it will directly affect the valuation of the product. " Zhu said to:
There is still a gap between the valuation and the actual transaction price. For example, the previous "turn around and" can't play "two mobile phones? The article "Entrepreneurial Frontline" mentioned that the transfer was suspected of attracting traffic with high valuation, and then taking advantage of consumers' fear of trouble to get goods at a lower price.
From the point of view of competing for supply, the industry once fell into the dilemma of "the highest price wins".
"The second-hand 3C transaction is mainly a price war in the recycling link, because the consumer groups who buy second-hand 3C are price-sensitive users, and the primary appeal is that the products are cheap." Zhu pointed out.
Platformization is trying to solve the dilemma of these industries.
"We test and evaluate the products through systematic standards, and then evaluate the current market situation, product residual value and elimination cycle according to a large number of historical data of purchase and sale accumulated in the previous period." Wu shows off.
In view of the high online business threshold of second-hand 3C business, large platforms also have advantages over small workshops.
"The online business of heavy money recycling is essentially based on trust, which is why big platforms are easy to do online business." Zhu said, "Without platform endorsement and trust foundation, who dares to send mobile phones to unknown small companies casually?"
The threshold of platform-based sales is high, and for consumers, the price can be relatively high-the platform saves the intermediate link of "exploitation" of traditional channel providers, recycles equipment from the front end and sells it to the people who need it most, so the value of the product is also high.
"The advantage of platform-based sales is based on the scale of trust, coupled with the standardization of operating procedures and high prices, it will gain more competitive advantages than small and medium-sized players." Wu shows off.
"However, second-hand 3C trading is still a business that can only satisfy some people." Zhu said to:
When the value of the platform-type "regular army" is constantly enlarged, what can small and medium-sized second-hand dealers do?
"In the past, we needed to compete for public domain traffic on various platforms, and the price of purchasing traffic was very high." Zhu recalled that the early way to get traffic to the door was to advertise in 58 cities, spend tens of thousands of dollars a month, and then turn around. "Not only is the traffic more expensive, but many customers eventually become customers of the platform. Traffic can't be taken away and the platform can't be transformed. "
The logic of "spending money to buy traffic" didn't work, and Zhu began to play the idea of media business and private domain traffic again. His team began to prepare the media matrix from 20 15, focusing on product evaluation and making videos from 20 18. Now we have accumulated a stable customer base through the Internet, and we can recycle six or seven thousand second-hand mobile phones a month.
"In the past, paying advertising fees was essentially working for the platform. Now it's like doing business with private domain traffic. " Zhu is full of emotions.
However, under the trend of platformization and standardization, the value of traditional channels has been gradually weakened, or it has been unable to compete with the platform for supply.
"Big platforms generally have the advantages of traffic and customers." In theory, the living space of small and medium-sized dealers will become smaller and smaller, because the platform provides a more efficient recycling sales method outside the traditional recycling channels.
Zhu also has a deep understanding of this. "The more formal the platform, the better the services provided, and the fewer our corporate customers."
However, in Wu's view, small and medium-sized dealers can take advantage of the channel, collect goods at the front end, and then operate on a unified platform, which can not only save costs, but also maximize second-hand value. "After all, the entire industrial chain cannot be monopolized by one enterprise."
Throughout the second-hand 3C market, there is a connection between idle fish and short blades, and then there is a confrontation between love recycling and recycling treasure. The giant team is obvious, and the battle in the field of second-hand e-commerce continues.
When traditional channel providers retreat behind the scenes, the stage will eventually be left to unicorns. "The second-hand 3C market will never be monopolized." Zhu judged this.
* The pictures in this article are from Picture Network, based on VRF protocol.