Zhuanzhuan Group, a secondhand product marketplace operator in China, raised USD 45 million in its Series A financing round for its B2B platform Caihuoxia, led by Zhongding Capital. This brings Caihuoxia’s valuation to USD 140 million, while the transaction volume on the platform increased by 30 times year-on-year during the first quarter of 2021.
The company’s most popular product categories include consumer electronics and household appliances, while in May 2021, the monthly transaction volume on the platform reached RMB 500 million (USD 78 million), growing at a monthly rate of over 20%.
“B2B and B2C platforms have significant differences in terms of strategy, and independent operation will help each deliver improved user experience for different types of customers. Zhuanzhuan and Zhaoliangji, a secondhand smartphone marketplace, will continue to develop horizontally to serve consumers, while Caihuoxia will pursue business users in new verticals and industries,” said Huang Wei, CEO of Zhuanzhuan Group.
Huang also referenced the US secondhand car industry as an example of symbiotic development between B2C and B2B platforms. “Carmax and Carvana are B2C online retail companies, while car auction companies KAR and ACV provide dealers with B2B services, and each of them is developing very well,” he said.
Xiang Changfeng, CEO of Caihuoxia and co-founder of Zhuanzhuan Group, said that the company’s core mission is to reshape the traditional industrial chain by leveraging technical algorithms to process data from B2B transactions. This approach improves the efficiency of commodity circulation, and reduces transaction costs, Xiang said, attributing Caihuoxia’s rapid development to the firm’s advantages in supply chains, fulfillment, and purchasing power.
Caihuoxia’s goal is to create an efficient circulation of used goods by working with third-party recycling and sales platforms as well as secondhand smartphone merchants. Caihuoxia is also actively engaging with local partners in various cities, cooperating on smartphone recycling, device inspections, and secondhand product sales.
The company has built up extensive experience inspecting, grading, pricing, and selling secondhand products, and uses big data and machine learning to streamline the process and increase the transaction rate.
“We will continue to increase capital and manpower investments in technological upgrades, to support our city partners and provide better services to merchants at a lower cost,” Xiang said.
“Caihuoxia is helping secondhand smartphone recyclers increase their transaction volume through its four pillars of data-driven assessment and grading, centralized delivery infrastructure, product refurbishment, and efficient distribution channels. We believe that this business model is more efficient and resilient than the self-operated recycling model,” said Zhu Yingchun, founding partner at Zhongding Capital.
KrASIA Connection features translated and adapted content published by 36Kr. This article was originally written by Zhang Ting.