On the day Apple unveiled its latest iPhone, Smartisan founder, speaker and internet personality Luo Yonghao announced he was becoming "promotion ambassador" for secondhand smartphones on Zhuanzhuan.
Founded in 2015, Zhuanzhuan is an affiliate of classified advertisements website 58.com and is backed by technology company Tencent Holdings. As new phone models are released at a rapid pace some Chinese are recognizing the trend of cheaper, used technology.
An iPhone 11 Pro Max 256GB that sells for 10,899 yuan ($1,627.49) in the Apple store would cost 6,659 yuan on Zhuanzhuan. The only difference is perhaps a cosmetic blemish on the phone shell, said Luo at the company's seven-minute launch.
Luo said the core competitive advantage of Zhuanzhuan in the secondhand smartphone market was to provide comprehensive inspection in cooperation with Foxconn, the primary manufacturer of iPhones. It includes 66 inspection items and 266 procedural steps to ensure the quality of refurbished phones. Additionally, it refunds for products purchased within seven days and offers a one-year warranty.
On Thursday, it saw 181,590 secondhand items traded. It offers a variety of brands including iPhone, Huawei, Meizu, ZTE and MI, Vivo, realme, LG and Lenovo.
"Even some less popular phone brands are available on Zhuanzhuan," said Luo - indicating the Smartisan T1 which was launched in 2014.
No Place For Latecomers
Smartisan's patents were acquired by ByteDance in 2019 after it reported its capital chain broken and large numbers of employees and executives departed.
Luo ended up owing 600 million yuan to suppliers.
In a recent interview by monthly magazine People, Luo agreed with economist critic Wu Xiaobo's analysis about Luo's failed entrepreneurship.
As of 2013, China saw 350 million smartphone sales - a year-on-year increase of 84%. Luo's company launched its first smartphone in 2014. It was already too late for Luo to enter the market, said Wu.
E-Commerce Meets Re-Commerce
In September 2019, Zhuanzhuan announced it was raising $300 million. Its parent 58.com and Tencent Holdings participated. This followed Zhuanzhuan raising $200 million from Tencent in 2017 at a post-investment valuation of $1 billion.
Aside from trading secondhand smartphones, Zhuanzhuan provides product trading, from garments to household appliances, digital cameras and more, according to the company's website.
Zhuanzhuan chief executive Huang Wei has said in an open letter he hoped "the cash injection would help the company "survive a challenging business cycle and intense competition."
As of 2018, China's secondhand market was 740 billion yuan, with a 30% annual growth. It is estimated that by the end of 2020, the secondhand market scale will top 1 trillion yuan, according to CCTV's statistics.
Zhuanzhuan and its larger rival, Alibaba-backed secondhand trading platform Xianyu, or Idle Fish in English, together control 90% of the C2C online "re-commerce" market. Both said the majority of users were born after 1990.