How Zhuan Zhuan is taking on Alibaba's Xianyu

Tencent-backed start-up has become China's second biggest online resale platform and is exploiting WeChat's vast community of users. It's now the main rival to Alibaba's Xianyu.

An emerging rival to Alibaba’s online flea market trading platform Xianyu, two-year-old Zhuan Zhuan has become China’s second largest online resale marketplace by monthly active users. It has 17.5 million, big data service provide QuestMobile reported in October.

58.com, a Chinese classifieds platforms operator listed in the US, launched the Zhuan Zhuan online portal and mobile app in 2015. In April, Zhuan Zhuan received a $200 million investment from China’s tech titan Tencent, which gave Zhuan Zhuan further exposure to the online second-hand-commerce market. In particular, its second-hand mobile phone trading is now the most active one in terms of monthly transaction volume, thanks to partnerships with some Chinese mobile manufacturers.

The April fundraising valued the company at $1 billion.

In September it agreed to work with Taiwanese electronics manufacturer Foxconn in order to launch two niche sites for used smartphones.

“Chinese people now own more and more luxury and durable goods…and the transactional livelihood of these goods should be fully explored,” Huang Wei, CEO of Zhuan Zhuan, said in an interview with FinanceAsia. “And trust is very important,” he said.

Sellers can upload product listings on Zhuan Zhuan through its mobile app, through which buyers then search. Leveraging Tencent’s WeChat’s user community, the platform introduces an acquaintance system, which encourages users to trade with their WeChat contacts. It automatically imports WeChat contacts, helping to establish that trust between buyers and sellers.

To further foster that trust, it has incorporated a credit rating system where buyers and sellers can check their counterparts’ track record on Zhuan Zhuan.

Among its next steps, the platform is optimising a transaction process, strengthening quality controls and consolidating users’ in-app experience. For example, it now offers quality inspection services and guarantees for mobile phones, and cooperates with Chinese home applicants maker Haier on inspection and maintenance solutions for household appliances sold on the platform.

Zhuan Zhuan is one of 10 hot startups FinanceAsia will profile as part of a new series running the rule over exciting companies that are changing the game across Asia. We'll publish more such profiles in the days to come.

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