A Chinese start-up offering to resell designer handbags is tapping into the nation’s largest social media app WeChat to give the second-hand luxury business in China a digital boost.
The company, “Miao Hui Shou,” which literally means “instant recycling,” is trying to replicate the success of New York-based online resale platform Rebagg.
According to the official description of the company on WeChat, Miao Hui Shou is a professional online-to-offline (O2O) trade platform for the secondhand luxury items. It offers an online space for sellers of pre-owned luxury items to connect with interested buyers (both from business and consumer sides).
Slightly different from Rebagg, Miao Hui Shou offers items for “recycling” that go beyond the category of designer handbags to include watches and jewelry. Aside from recycling and reselling products, the company also offers luxury rentals and an auction platform.
During an interview with the domestic Chinese media Sohu on May 31, the Founder, Zhang Yue, who previously was the General Manager of a publicly-listed American company in the Greater China region, said that Miao Hui Shou was inspired by the massive demand for recycling and reselling secondhand luxury items in China.
“Some people receive gifts from friends or family but (these luxury products) do not really match their style, they need to find a reliable recycling agent,” Zhang said.
“But when people try to sell in the traditional markets such as local recycling stores, it is hard for them to sell with a reasonable price.” Zhang explained that it was common for the local recycling agents to deliberately lower the price of secondhand luxury items and even sometimes force buyers to sell.
Thus, Miao Hui Shou attempts to be a trustworthy platform for people to use. It has set up partnerships with Chinese e-commerce companies such as JD.com to sell and rent luxury goods, and also provides free pick-up services in the major first- and second-tier cities in China.
Users of Miao Hui Shou only need to place the order on WeChat. Like Rebagg, luxury sellers upload several pictures of items on the app. After that, Miao Hui Shou’s professional appraisers judge the authenticity and newness of the products and offer a quote. Users can then decide if the quote is acceptable.
Miao Hui Shou also runs a credit check of the sellers. Once they pass the check, the company makes the payment first and then the sellers can either mail the products or use Miao Hui Shou’s free pick-up.
So far, Zhang Yue said that Miao Hui Shou has attracted nearly 8,000 product suppliers. It has around 10,000 annual transactions and the average price for each deal is about RMB 10,000 (approximately $1,462). The gross margin is around 12 to 13 percent, and the bad loan ratio stands at 0.2 percent.
From recycling to reselling, it takes about 20 days on the platform, which Zhang said was much more efficient than the time it would take through traditional channels.
Currently, Miao Hui Shou has initiated the A-round funding in order to expand the team, update the system and place more ads.