JD.com merges its secondhand trading platform Paipai with startup Aihuishou

And it’s investing an additional USD 20 million.

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JD.com merges its secondhand trading platform Paipai with startup Aihuishou

JD.com has entered into an agreement to invest in Aihuishou, an online trading platform for recyclers to acquire secondhand consumer electronics, according to a company filing that the e-commerce giant sent to the United States Securities and Exchange Commission on Monday.

“JD.com will merge its Paipai Secondhand business into Aihuishou with certain exclusive traffic resources for the next five years, and additionally invest approximately US$20 million in cash in exchange for a non-controlling interest in Aihuishou,” the company indicated in the filing, though it didn’t specify what those resources are.

The Paipai-Aihuishou merger terminates speculation regarding Paipai’s fate, after months of conjecture that JD.com was attempting to spin off the subsidiary. Previously, Tencent-backed C2C secondhand sales platform Zhuan Zhuan revealed that its attempts to acquire Paipai from JD did not bear fruit.

Paipai was conceived as a C2C e-commerce website before it was bought by JD.com from Tencent in 2014. By the end of the following year, sellers could no longer post new listings on the site, as JD.com was concerned about the prevalence of knockoffs on the platform. By April 2016, the website was shut down, but Paipai was relaunched in 2017.

JD.com said in a press release sent to KrASIA on Tuesday that it will lead Aihuishou’s USD 500 million financing and strategic merger deal. Other investors include Morningside Venture Capital, Tiger Fund, Tiantu Capital, and Genbridge Capital.

JD said it will become the “largest strategic shareholder”—not to be mistaken as largest shareholder—of Aihuishou, without disclosing its stake in the trading platform.

After the merger, Paipai’s general manager will serve as co-president of Aihuishou. However, JD.com did not reveal details about whether Paipai and Aihuishou will operate as separate entities or an integrated platform.

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