JD.com Quietly Rolls Out Second-Hand Market, Quashes Questions About Where Returned Goods End Up

JD.com Quietly Rolls Out Second-Hand Market, Quashes Questions About Where Returned Goods End Up

Zhao Chenting

Date: Tue, 09/12/2017 - 17:52 / source:Yicai
JD.com Quietly Rolls Out Second-Hand Market, Quashes Questions About Where Returned Goods End Up
JD.com Quietly Rolls Out Second-Hand Market, Quashes Questions About Where Returned Goods End Up

(Yicai Global) Sept. 12 -- JD.com Inc.’s [NASDAQ:JD] second-hand goods are collected by professional agencies and tested by engineers to ensure authenticity then delivered from Shanghai, the firm said.

The online market place, which built its business by selling 3C (computer, communication, consumer) products, handles a number of goods returns every day. Many consumers are curious about what happens to returned goods, and some have even questioned whether or not the firm sells pre-owned goods.

Product returns and replacements are actually dealt with by suppliers. For example, if you buy a pair of headphones worth several thousand yuan on JD.com, then return them under the seven-day no-questions-asked return policy after trying them for two days, the costs are ultimately borne by the supplier.

Under pressure from suppliers, the e-commerce platform keeps narrowing the scope of products that fall under the generous return policy. According to its website, most headphones from popular brands like Sennheiser, Sony and Beats are no longer covered by the policy.

This is the second time this year the firm has adjusted its returns policy. In July, it cut graphics products from the list. Milk, video games, jewelry and some cosmetic products are also not covered.

However, the firm is finding a way forward for returns. In January, it quietly rolled out a second-hand market place, Er Shou Youpin, to sell goods consumers returned under the seven-day policy, such as iPhones.

The marketplace is still operating on a trial basis, but information about the second-hand products is available on the main JD.com website. If you search for a product on the main site that is available second-hand, it will say so in the bottom right corner of the product description. Clicking the text will show information about second-hand products and what colors, etc. are available.

JD.com’s second-hand market model is still business-to-consumer, making it slightly different to Alibaba Group Holding Ltd.’s [NYSE:BABA] Xianyu and 58.com Inc.’s [NYSE:WUBA] Zhuanzhuan, China’s largest second-hand online markets by transaction numbers, which are both consumer-to-consumer.

Competition between Xianyu and Zhuanzhuan has been regarded as somewhat of a rivalry between Alibaba and tech giant Tencent Holdings Ltd. [HKG:0700], which pumped USD200 million into Zhuanzhuan in April.

Zhuanzhuan is also interested in JD.com’s second-hand business-to-consumer model, and is set to team up with Foxconn Technology Co. [TSE:2354], Apple Inc.’s [NASDAQ:AAPL] largest contract manufacturer for iPhones, to develop a second-hand iPhone business. Foxconn earlier set up a unit dedicated to selling such handsets, Aifengpai, which founder Terry Gou held high hopes for.

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Keywords: JD, Second Hand Goods, 2.JD.com, Zhuanzhuan, TENCENT, Alibaba, Xianyu