ZhiEr (只二), online secondhand fashion retailer closed a Series A and a Series A+ round of financing, each contributing tens of millions of US dollars to the company. The lead investors were Redpoint China Ventures and Vision Capital, followed by the existing shareholders China Growth Capital, China’s biztech media 36Kr reports.
The funds will be mainly used to improve service efficiency and user experience, and to optimize the pricing algorithm and the authentication of transaction items.
ZhiEr was established in 2015. It is an online marketplace for secondhand casual-luxury goods and targets female consumers. In the beginning, ZhiEr bought and then sold, purchasing goods at a fixed price. Later, consignment services were added. The platform provides services such as sorting, cleaning, disinfection, photographing, rapid recycling, and shipping for items from users.
According to statistics released by ZhiEr, the platform currently has 800,000 registered users (including buyers and sellers). 80% of the items will change hands within 90 days for a unit price of at least over one thousand yuan (about US$ 157). About 20% of the sellers and buyers overlap.
Due to the diversity of trading needs, the categories that ZhiEr handles have been expanded from initially clothes to four major fashion categories—clothes, bags, shoes, and accessories. The new categories are different from secondhand clothes. They often have a higher value. The former fixed-price model based on sale-after-purchase does not apply to such items.
The newly added consignment service is intended for high-priced transactions. The seller sends the item on consignment to the platform for processing. The platform charges 15% as the service fee after it is successfully sold. If the seller returns the item, they will bear the return postage.
With respect to user-sensitive pricing, in addition to brand, design, wear and other indicators, ZhiEr added the supply-sale relationship to the pricing model and uses algorithms to adjust the pricing of goods based on sales.
The founder ZHUTAI Niqi believes that the secondhand market for female customers is an area with demanding requirements for service. A service-driven trading platform is need to solve problems in efficiency, cost, authenticity, cleaning and after-sale service that occur in the circulation of second-hand goods for women. ZhiEr, therefore, focuses on service. The startup doesn’t just aim to do secured transactions; it also wants to cover the whole secondhand goods transaction process with services.
ZhiEr is going to try more methods on both the demand and the supply ends. ZhiEr’s current services mainly focus on the buyer, and the transaction on the part of the seller occurs in two stages: sending and selling. How to enrich the seller’s gameplay is ZHUTAI Niqi’s current concern. In his view, the current 20% overlap between buyers and sellers still has room for growth. ZhiEr may add lightweight social interactions in the future to enhance the interaction between buyers and sellers and to expand supplies.