Core Viewpoint - The company, Zhuanzhuan Group, announced the gradual shutdown of its "Free Market" business, marking a strategic retreat from direct competition with Xianyu in the second-hand e-commerce sector [1][2]. Group 1: Business Transition - Zhuanzhuan's CEO, Huang Wei, described the shutdown as a "strategic retreat," indicating a shift towards a C2B2C model that has been in motion since 2019 [2]. - The C2C business, which was the foundation of Zhuanzhuan, now accounts for less than 3% of the company's total share, highlighting the need for transformation [3]. Group 2: Financial Performance and User Engagement - Zhuanzhuan has invested heavily in advertising, particularly on platforms like Bilibili and Douyin, but the effectiveness of this investment appears limited, with monthly active users only increasing from 24.73 million to 35.88 million, a year-on-year decrease of 5.3% [3]. - The company has generated over 25 billion yuan in revenue since its establishment, with registered users exceeding 400 million by the end of 2024 [3]. Group 3: Quality Assurance and Trust Issues - The shutdown allows Zhuanzhuan to focus on its "Official Verification" business, which has seen significant investment, including 1.5 billion yuan for quality inspection centers and over 2 billion yuan planned for 2024 [4]. - Despite these efforts, trust issues persist, with over 110,000 complaints on the Black Cat Complaint platform, primarily related to discrepancies in product descriptions and quality verification [5]. Group 4: Competitive Landscape - Xianyu, as the leading player in the second-hand market, has surpassed 200 million monthly active users, growing nearly 20% year-on-year, and has established a unique ecosystem combining transactions and community engagement [6][8]. - The market is expected to polarize, with Xianyu dominating the C2C segment while Zhuanzhuan and competitors like Wanwu Xingsheng compete in the B2C quality market [9].

Core Viewpoint - The company Zhuangzhuang has officially terminated its C2C business model after ten years, shifting entirely to a C2B2C model, as announced by CEO Huang Wei in a letter to users [1][22]. Group 1: Business Model Transition - Zhuangzhuang has decided to shut down its "Free Market" feature, which was part of its C2C operations, and will gradually transition to an "official verification" business model starting September 22 [1][22]. - The decision to eliminate the C2C business is seen as a second retreat for Zhuangzhuang, following a previous shift in focus to second-hand mobile phones in 2020 [9][11]. Group 2: Competitive Landscape - Zhuangzhuang has been operating under the shadow of Xianyu, which is backed by Alibaba and has a strong ecosystem that includes traffic, payment, and logistics support [7][11]. - The competitive pressure from Xianyu has influenced Zhuangzhuang's decision to abandon its C2C model, as many users have migrated to Xianyu due to perceived limitations in Zhuangzhuang's offerings [6][11]. Group 3: Financial and Operational Challenges - Zhuangzhuang has faced significant financial challenges, requiring nearly 200 million yuan annually to subsidize its C2C operations, which only contributed 30% of its revenue [11][22]. - The company has not secured new capital since its last funding round in 2021, which raises concerns about its ability to sustain operations and invest in necessary improvements [8][17]. Group 4: Trust and Quality Assurance Issues - The company has encountered a trust crisis regarding its quality inspection system, highlighted by inconsistent quality reports during the "Monkey Big Shot" incident [18][19]. - Zhuangzhuang's efforts to establish a reliable quality assurance system are critical for the success of its C2B2C model, but the high costs associated with maintaining quality inspections and physical stores pose a significant challenge [21][22]. Group 5: User Engagement and Market Position - The frequent strategic shifts have led to user confusion and potential loss, as the company struggles to maintain a stable user base while transitioning to a focus on luxury second-hand goods [14][15]. - Zhuangzhuang's user engagement has declined, with its monthly active users dropping significantly after previous strategic changes, indicating a need for a more coherent approach to retain users [15][22].