Core Viewpoint - The second-hand trading platform Zhuanzhuan has decided to shut down its C-end business and shift focus to an "official verification" business model, indicating challenges in converting traffic into transactions despite backing from Tencent [4][6][33]. Summary by Sections Business Transition - Zhuanzhuan announced the closure of its C-end business on September 22, 2023, and will gradually shut down its "free market" operations while maintaining other business lines [6]. - The company has shifted its focus to the second-hand luxury goods sector after struggling to compete in the C-end market against rivals like Xianyu and Aihuishou [6][40]. Market Context - The Chinese second-hand market has surpassed 3 trillion yuan, with intense competition from platforms like Douyin and Kuaishou, in addition to established players [6]. - Zhuanzhuan, founded in 2015, has not achieved the same level of success as Xianyu, which boasts over 200 million monthly active users, and Aihuishou, which has surpassed 10 billion yuan in revenue [6][26]. Financial Performance - Zhuanzhuan reported cumulative revenue exceeding 25 billion yuan from 2021 to 2025, with over 4 million registered users [9][40]. - However, the company has not disclosed its profitability, raising concerns about its financial health [10][11]. User Engagement and Conversion - The platform's user engagement metrics, such as active users and transaction volumes, are critical for assessing its viability, yet Zhuanzhuan has not provided these figures [12][13]. - The lack of effective conversion from registered users to actual transactions has been a significant issue, leading to a pivot away from C2C operations [24][33]. Competitive Landscape - Zhuanzhuan has faced significant challenges from larger competitors like Alibaba and JD.com, which have more robust ecosystems and user engagement strategies [30][32]. - The company has struggled to maintain a competitive edge, with its C2C business accounting for less than 3% of total revenue [24]. Strategic Shift - In response to competitive pressures, Zhuanzhuan transitioned to a C2B2C model in 2019, but this has not reversed the decline in its C2C business [23][26]. - The company is now focusing on offline second-hand transactions, leveraging Tencent's traffic support, but recognizes that traffic alone is insufficient for success in the e-commerce sector [38][37]. Industry Reflection - Zhuanzhuan's experience reflects broader trends in the internet startup landscape, where many companies have struggled to survive against dominant players [25][41]. - Despite its challenges, Zhuanzhuan has managed to retain its brand and presence in the market, unlike many other startups that have disappeared [41].

Core Insights - The article argues that third and fourth-tier cities present significant wealth opportunities that are often overlooked due to perceptions of lower consumer power compared to first and second-tier cities [1][47][50] Group 1: Investment Opportunities - Many successful business models from first and second-tier cities can be replicated in third and fourth-tier cities, where competition is lower and investment costs are reduced [5][50] - The consumer behavior in third and fourth-tier cities shows a strong tendency for "follow-the-trend" consumption, making it easier to introduce new concepts [5][50] Group 2: Replication Strategies - **Food and Beverage**: Replicating popular dining concepts from first and second-tier cities can attract young consumers in third and fourth-tier cities [8][9] - **Health and Fitness**: Establishing well-equipped gyms can fill a gap in the market, as health consciousness is rising among younger demographics [12][13] - **Retail Innovations**: Introducing modern retail formats like convenience stores and fresh supermarkets can significantly improve the shopping experience [15][16] - **Education and Training**: There is a demand for educational services, including tutoring and skill training, which remains underdeveloped in smaller cities [20][21][24] - **Entertainment and Leisure**: Creating social venues and entertainment options can cater to the lack of recreational activities in these areas [25][27] - **Marriage and Social Services**: There is a notable absence of marriage and social platforms, presenting an opportunity to introduce these services [27][28] - **Home Services**: The demand for reliable home services is high, and replicating successful models from larger cities can quickly build a customer base [32][33] - **Local Internet Business**: Leveraging e-commerce and social media marketing can help local businesses thrive in third and fourth-tier cities [35][37] - **Elderly Care**: The aging population in these cities creates a market for elder care services, which are currently lacking [39][40] - **Platform Thinking**: Transitioning from small businesses to platform-based models can yield greater financial returns [44][45] Group 3: Conclusion - The article concludes that third and fourth-tier cities are often underestimated as wealth generation areas, and the key to success lies in replicating proven business models rather than creating unique concepts [47][48][50]