A WeChat Official Account called Duozhuayu (多抓鱼), which acts as a platform for the trading of used books, has been gaining popularity among book lovers recently.
The name sounds like the French word “Déjà vu” when pronounced in Mandarin.
Instead of investing in marketing, Duozhuayu has relied purely on the operation of online communities to encourage word-of-mouth recommendations. Since it went online in May 2017, the account has amassed more than 300,000 followers and sold over 200,000 books in total. It was made available for all cities in China last December and has since been selling some 2,000 books on a daily basis. It boasts high user stickiness and value per user as well, with its repeat purchase rate and average revenue per customer standing at 32.91% and 74.68 yuan (approx. USD 11.81) respectively. Its most engaged user has sold 1,146 books via the platform.
The platform is operated by a small team of only a dozen people, who just closed a 30 million yuan (approx. USD 4.75 million) series A round from Matrix Partners China, K2VC and Next Capital last December.
Trading of used books is not new. What’s so special about Duozhuayu? How exactly does the platform work? What is it that makes it popular among users even though it has not spent a penny on marketing?
Secondhand bookshop and “library”
In MAO Zhu’s view, books can fit perfectly into the secondhand market. On the one hand, the Chinese print book market is seeing signs of recovery, with retail sales growing by 14.55% year on year in 2017 to reach 80.32 billion yuan (approx. USD 12.7 billion), demonstrating a continuation of the strong growth trend in recent years. On the other hand, books are standard and durable items and are largely immune to price changes, features that make them perfect for repeated buy and sell transactions. This may explain why e-commerce giants like Amazon and JD.com started out as book retailers.
Duozhuayu reconditions and prices the books collected from users before posting them on its platform. In essence, it’s offering a full line of services for the handling of used books, from recycling, cleaning and reconditioning to pricing and reselling, in a collective and standardized way, with the added bonus, in MAO Zhu’s view, of conserving social and public resources. “In the long term, it’s like a library,” MAO Zhu said.
The fact that books are cleaned and reconditioned before being listed on the market breaks the stereotype that what one can get from the secondhand market are all faded or blemished books. According to Duozhuayu’s staff, they only take books that are physically intact and all books are reconditioned, put through an ozone sterilization process, and packaged with sterilized plastic before being delivered to buyers. Several users who have bought books on Duozhuayu told 36Kr – a Chinese biztech media and also KrASIA’s parent – that it almost felt as if they were purchasing new books at cheaper prices.
Apart from delivering a superior experience on the buyer’s end, to keep its business going, Duozhuayu has also made reselling easier than ever. Sellers just need to scan the barcodes on the books and Duozhuayu will send couriers from SF Express to pick them up. The platform also offers to help users check and sort books on-site (provided that the number of books to be handled exceeds 100), a service handy for graduating students or people who are moving.
Moreover, to appeal to those who don’t feel the need to dispose of their old books, Duozhuayu is cooperating with publishers to provide sellers with the option of using the money earned through resale to purchase new books at discounts.
A touch of both Douban and Toutiao
Duozhuayu is more than a used-goods market. It’s also an online community for readers.
In fact, compared with JD.com and Amazon, Duozhuayu shares more in common with the books section of Douban (豆瓣), a community for young Chinese netizens. The former two concentrate on the selling of books, while the latter also integrates a community feature. Duozhuayu displays recommendations from different users and book lists generated by users as well as editors. Users can use tags to narrow down their searches.
Duozhuayu started off as a utility and later diversified to serve as an online community for readers.
As far as MAO Zhu is concerned, a used-goods trading platform is, in essence, a community.
“We may offer additional services, but all the merchandise is provided by our users,” she said. “Users are central to the operation of a community. It’s therefore important what user group your product draws as different user groups make for completely different communities.”
Duozhuayu’s community gene is rooted in the backgrounds of its founding members, who had previously worked at Douban or Zhihu (China’s answer to Quora).
At this stage, to ensure that the books circulating on its platform suit the tastes of as many users as possible, Duozhuayu takes only books in the categories of humanities, social sciences and business. But in the future, it expects to open to more categories as its audience grows, said MAO Zhu.
It’s worth noting that, in the end, it is algorithms that decide how the platform handles books. By introducing algorithms to determine the acceptance criteria, price books in real time and match books and user information, the platform is able to run automatically and more efficiently.
However, building such an algorithm is no easy task. The team had to take into account myriad factors including economic models, the supply-demand balance, and its profitability and price competitiveness against comprehensive platforms like JD.com and Amazon.
In its early days, when it didn’t have enough data in its database, Duozhuayu adopted a one-size-fits-all approach to pricing, buying books at 10% of the list price and selling at 30%. Today, however, it is able to adjust prices in real time based on supply-demand dynamics while reserving a 60% gross profit for itself.
A remedy for middle-class anxiety
Timing is a crucial component of success, no matter what product you sell.
Duozhuayu’s gaining popularity with users and investors coincides with two other developments. For one, the business models of resale and leasing answer to China’s economic slowdown. The secondhand market is booming, with young people increasingly coming to terms with the idea of leasing instead of insisting on owning; for another, books have come to be seen as a remedy for China’s middle-class anxiety. To some degree, the very act of purchasing books or drafting book lists matters more than reading itself.
The Japan-based Book Off was also born at a time when Japan’s economy was going downhill and its people were experiencing a shift in their attitudes towards consumption. The company opened more than 700 stores between 1999 and 2005 and is now the ninth largest book company in Japan. Besides books, it’s also selling audio/video products as well as home supplies.