Ironically, old-fashioned clothes, obsolete smartphones, once-revered household appliances and used books, once destined mainly for the trash or landfill, are getting a new lease of life thanks to China's thriving circular economy in recent years .
Multiple factors are contributing to this transformation fueled by a combination of government initiatives, a burgeoning market for surplus goods and changing attitudes influential among the country's tech-savvy and environmentally friendly youth.
Liu Mengqi, a 28-year-old resident of Changsha in Hunan Province, sold a smart watch she won at her company's annual party; she got 900 yuan (115 euros) from it at the beginning of February after a fierce haggling on Xianyu, an electronic commerce platform for second-hand goods.
Examples of individuals selling underused or out-of-date goods have become increasingly common in China, as evidenced by data from the country's largest second-hand goods platform – Xianyu – which claims 500 million customer accounts and more than a billion items on sale as of May 2023.
A female employee sorts items at second-hand e-commerce platform Xianyu's first offline store in Hangzhou, Zhejiang province. LONG WEI / FOR CHINA DAILY
China's domestic market for used products, which has already surpassed a record 1 trillion yuan in 2020, is expected to exceed 3 trillion in second-hand market transaction volume, according to a report from the Institute of energy, environment and economics based in Beijing, at Tsinghua University.
The rapid development of China's economy and the sustained period of increasing purchasing power has created ideal conditions for the circular economy, comments Zhu Keli, founder and director of the China New Economy Institute.
Data provided by the National Bureau of Statistics reveals that in 2023, the total amount of retail sales increased by 7.2 percent year-on-year, reaching 47.15 trillion yuan. This notable increase represents almost double the result obtained a decade earlier, which stood at 23.78 trillion yuan in 2013.
Soaring consumerism in China has resulted in a surplus of products that has led to large inventories of out-of-date and unwanted items. These goods, which range from clothing to electronics to household items, among others, constitute the foundation of the circular economy, adds Mr. Zhu.
Online platforms have become the bridge that connects sellers looking to get rid of their unused possessions, and buyers looking for more economical substitutes or exceptional finds and deals.
The convenience and accessibility of online platforms has accelerated the popularity of the circular economy among young people. With just a few clicks, users can browse a vast collection of products, compare prices and execute secure transactions.
In 2023, China's second-hand goods e-commerce market is estimated to jump 14.25 percent year-on-year to 548.65 billion yuan in transaction volume, according to 100ec.cn, a trading platform. business specializing in the digital economy and online commerce.
An employee at work in an electronics recovery store in Beijing. PROVIDED TO CHINA DAILY
At the same time, this surge in commercial activity benefits from a strong expansion of the user base, with an increase which should bring their number to 620 million, which represents an impressive growth of 33.9% year-on-year.
Unlike traditional brick-and-mortar flea markets and second-hand stores, second-hand goods platforms leverage algorithms that enable greater matching efficiency. This provides consumers with a more tailored and personalized shopping experience, said Li Mingtao, head of the Research Institute at the China International E-Commerce Center.
The younger generation has emerged as the driving force behind the industry's growth, contributing to the expansion of its user base and transaction volume.
The user base of electronic used goods platforms is largely made up of Generation Z, as shown by data from Aurora Mobile, a large data platform based in Shenzhen, Guangdong province. More than 90% of users who frequently engage in commercial activities on these platforms are aged 30 or younger, according to this data.
Chen Hao, a passionate Beijing techie, made his first purchase on an online second-hand goods platform – the start of a decade-long adventure. He has since amassed a collection of second-hand treasures, including computer mice, routers, graphics cards and camera lenses.
Customers examining used vehicles at a dealership in Chongqing. PROVIDED TO CHINA DAILY
The appeal of the circular economy, for the younger generation, goes beyond its affordable prices. While cost reduction is undoubtedly a key lure, young people are also attracted by the uniqueness and individuality offered by second-hand goods, says Mo Daiqing, an analyst with the 100ec.cn platform.
She adds that retro fashions, collectibles and niche products are just a few examples of the treasures that can be found in the online used goods market. Young consumers have the freedom to choose the styles that set them apart, to express their personality through one-of-a-kind items.
While the circular economy offers accounting advantages in terms of cost reduction and job creation, it also has significant effects on the environment through its capabilities in terms of drastic reductions in carbon emissions and the promotion of growth. sustainable.
As the second-hand economy continues to gain momentum in China, it faces several challenges that stand in the way of its expansion and full realization of its potential, related to the quality and authenticity of the products. products, respect for standards and rules, perceptions and stigmatizations, all of these considerations appear at the top of the list of inadequacies, analysts judge.
It is up to platforms to establish robust refund policies and procedures to simplify complaints from dissatisfied buyers. Implementing clear guidelines and effective customer support systems would help resolve refund issues promptly and restore user trust, according to Fu Yifu, a senior researcher at the Star Atlas Institute of Finance.