(Yicai Global) May 17 -- Xianyu, Alibaba Group Holding's app for second-hand goods, said it will start charging certain sellers a fee from June 6.

Sellers who get more than 10 orders a month worth a total of over CNY10,000 (USD1,433) will be charged 1 percent of the transaction value for each order after the excess, Xianyu announced yesterday.

The fee will be applied because of the rising number of users and the platform's increasing investment in technology, research and development, operations, and services, according to Xianyu’s customer service department.

Launched in June 2014, Xianyu is one of China's largest trading platforms for second-hand goods. It had about 145 million monthly active users of idle goods transactions last year, with overall user numbers in excess of 300 million.

Xianyu is introducing the charge to make a profit, Zhuang Shuai, an expert in the retail e-commerce industry, told Yicai Global. After Alibaba announced its recent organizational shakeup, the profitability of each businesses group has attracted more attention, Zhuang pointed out.

Hangzhou-based Alibaba announced on March 28 that it had split itself into six business groups to deal with a rapidly changing market environment, adding that each will independently raise funds and go public when the time is right.

According to analysts, Xianyu’s service fee is related to a large number of professional sellers joining the app, with Xianyu expanding such businesses to increase the richness and gross merchandise value of products and debut various operational tools for big traders.

Charging a fee to high-frequency and high-value sellers can reduce the competition between Xianyu and Alibaba's other two digital marketplaces Taobao and Tmall, angel investor Guo Tao told Yicai Global. Many merchants are attracted by Xianyu's advantages, including low threshold and high clicks, and have quit the other two, Guo added.

Xianyu spent CNY100 million (USD14.3 million) to help more than 60,000 vendors from Huaqiangbei in Guangdong province to settle on the platform in March 2020, the analysts added. But professional sellers have brought problems such as concealing the actual condition of goods and some information about items to earn more, throwing up issues for management, they added.

Used e-commerce trading involves many categories and has broad commercialization prospects, said Zhuang, who also founded Bailian Consulting. But the challenges lie in the difficulties of scale, a lack of industry standards, and obstacles to quickly improving user experience, Zhuang noted.

Editor: Martin Kadiev