Core Viewpoint - The company "Zhuanzhuan" is shifting its business model from C2C (customer-to-customer) to C2B2C (customer-to-business-to-customer), indicating a strategic pivot due to declining market share and competition with platforms like "Xianyu" [1][4][9]. Group 1: Business Model Transition - Zhuanzhuan will gradually shut down its "Free Market" business, which supported personal transactions, and focus on the "Official Verification" model [1][2]. - The C2C business currently accounts for only 3% of Zhuanzhuan's revenue, suggesting that the impact of this transition on overall income may be minimal [1][4]. - The shift to C2B2C is seen as a necessary move to avoid direct competition with Xianyu, which has a significantly larger user base [2][4]. Group 2: Market Position and Competition - Zhuanzhuan's monthly active users are significantly lower than Xianyu's, which has surpassed 200 million, while Zhuanzhuan struggles in the millions [2][4]. - In the second-hand mobile phone market, Zhuanzhuan and "Aihuishou" are nearly equal in total transaction volume, with Zhuanzhuan at 5.8 billion and Aihuishou at 6.2 billion [5][6]. - The competitive landscape shows that while Zhuanzhuan has a strong position in mobile phone sales, it faces challenges in maintaining profitability due to high operational costs and reliance on advertising [10][11]. Group 3: Financial and Operational Challenges - Zhuanzhuan is investing heavily in expanding its quality inspection centers, with over 200 million allocated for 2024, indicating a focus on improving service quality [7][8]. - The company has not secured new financing in recent years, leading to increased pressure from its asset-heavy business model [8][9]. - Zhuanzhuan's financial services, including its rental business "Lezu," have drawn scrutiny due to high interest rates and potential regulatory risks, which could impact its financial stability [16][17]. Group 4: User Behavior and Market Dynamics - The second-hand market in China has significant growth potential, with 4 billion old phones generated annually, yet only about 5% are recycled through formal channels [6][10]. - Zhuanzhuan's rental service has attracted users with poor credit histories, raising concerns about the sustainability of its financial model [16][17]. - The company's strategy to diversify into various second-hand goods, including jewelry and electronics, reflects an attempt to capture a broader market [13].