Core Viewpoint - The second-hand business has significant potential, but the second-hand e-commerce platform faces challenges, leading to strategic shifts in companies like Zhuanzhuan, which is transitioning from C2C to C2B2C models [2][11]. Group 1: Zhuanzhuan's Strategic Shift - Zhuanzhuan has decided to strategically withdraw from its C2C trading business, closing the "Free Market" feature and focusing on "Official Recycling" and "Consignment" services [2]. - The CEO of Zhuanzhuan, Huang Wei, acknowledged that the "Free Market" has facilitated online fraud and disputes, making it difficult to manage [2][11]. - Zhuanzhuan's C2C business now accounts for less than 3% of its total operations, indicating a significant decline in this segment [2]. Group 2: Competitive Landscape - Zhuanzhuan faces stiff competition from Xianyu, which has over 600 million registered users and daily GMV exceeding 1 billion yuan, making it a formidable rival in the second-hand market [4]. - Despite initial backing from 58.com and Tencent, Zhuanzhuan has struggled to maintain user engagement, with active users dropping significantly after aggressive marketing ceased [6][8]. - The competitive dynamics are shifting as Zhuanzhuan pivots to a model that emphasizes quality assurance, but it still needs to build a reliable "traffic pool" to sustain its operations [11][14]. Group 3: Financial Backing and Investments - Zhuanzhuan has received substantial investments, including $200 million from Tencent in 2017 and an additional $300 million in 2019, followed by $390 million in subsequent rounds [6][8]. - The influx of capital allowed Zhuanzhuan to invest heavily in marketing, but user retention has been a challenge once spending decreased [6][8]. Group 4: Quality Assurance and Trust Issues - Following a trust crisis related to inconsistent quality reports, Zhuanzhuan has implemented a "7-day no-reason return" policy and expanded its quality inspection team significantly [12][14]. - The company has established three major quality inspection centers across the country, aiming to enhance consumer trust in its services [12]. Group 5: Future Competition - Zhuanzhuan's shift to a C2B2C model may lead to direct competition with Aihuishou, which has a strong offline presence and has expanded its business model to include various categories of second-hand goods [15][17]. - The offline market is becoming increasingly competitive, with Aihuishou leading in store coverage, while Zhuanzhuan is also expanding its physical store presence [17].