For the used car market, how much impact can the entry of the giant Xianyu cause?

The bigger the storm, the more expensive the fish. Now, this "fish" has come to the used car market.

For any industry that wants to maintain passion at all times, the catfish effect is essential, and the same is true for the used car market.

Recently, Xianyu, Alibaba's second-hand platform, announced the addition of "second-hand car brokerage and car sales" business. This means that in the future, we can not only find common categories such as digital products, clothing, furniture, and maternal and child products on Xianyu, but also "big items" such as cars can be traded online. Apart from anything else, this convenience is definitely much better than running back and forth offline.

Small unused items were selling well, so why did Xianyu suddenly start selling used cars? What is the underlying logic?

In fact, it is not surprising for Xianyu to develop the used car business. As early as 2016, Alibaba's auction platform had incubated Xianyu Used Cars. If you have paid attention to it, you should remember that Hangzhou also had the first "AiChe Xianyu Used Car" offline experience store at that time, which also attracted considerable attention in the industry.

However, Alibaba had no background or experience in automobiles at the time, and it was obviously not rational to open offline stores right away, which eventually led to this business slowly withdrawing from Alibaba's history.

After many years, Alibaba has finally figured it out and decided to use its advantages to make a comeback.

Xianyu’s advantage lies in its online presence. Both its user base and community interaction model are relatively mature. This time, its online used car business can be said to be a perfect combination of timing, location and people.

Some professionals have said that with the expansion of the used car market, optimizing transaction processes and efficiency and transforming and upgrading the market are major issues facing current operators.

This is exactly one of Xianyu's major advantages. On the one hand, Xianyu has Alibaba's big data resources, which can analyze users' browsing, searching, trading and other behavioral data, achieve accurate vehicle recommendations and user matching, and improve transaction efficiency. On the other hand, with consumption downgrading, people are more looking forward to buying more value-for-money cars with a smaller budget. Xianyu can provide such a platform, bringing together those who want to buy and sell cars, making it easier to facilitate transactions.

Moreover, the used car market is currently in a growth phase, and the competition in the industry is not as fierce as in the new car market. It is obviously appropriate for Xianyu to enter the market at this time.

According to statistics from the China Automobile Dealers Association, from January to November 2024, the national used car transaction volume reached 17.7139 million vehicles, a year-on-year increase of 5.74%.

In a market with potential, there are always people who want to get a piece of the pie, so the joining of Xianyu is not surprising.

However, Xianyu's entry into the used car market has caused a lot of controversy online.

Generally speaking, people are mainly concerned about two points: one is whether Xianyu is professional in dealing with used cars, and the other is whether Xianyu’s entry into the market will have a positive role in promoting or even reshaping the development of the current used car market.

Objectively speaking, compared with other used car platforms such as Guazi Used Cars and Youxin Used Cars, Xianyu’s professionalism is indeed worrying. After all, used car transactions involve complex vehicle condition assessments and property transfers, which require a high level of professional service capabilities from the platform.

Fortunately, Xianyu is backed by Alibaba, so there should be no problem with resources. If it can provide good services and offers guarantees, its future in the used car market is still worth looking forward to.

As a new force, can the arrival of Xianyu affect the structure of the used car market itself?

In recent years, the used car market seems calm on the surface, but in fact there are many problems inside. Problems such as opaque information and irregular prices are very common in the used car market, often leaving consumers with a stereotype that it is easy to "step into a trap".

A consumer once said that when he consulted about second-hand Highlanders, he found that the vehicles offered by merchants in the nearby market were of similar years and models. "This is very abnormal."

Although antitrust enforcement in the used car sector has been carried out with heavy blows, sometimes the market's own regulation is far more effective than a sudden heavy blow - just like Liu Qiangdong cured the problem of computer malls overcharging customers and Jack Ma stopped banks from charging for transfers.

The main reason why the used car market has so many problems is the lack of a catfish effect. The entry of new forces such as Xianyu, which has a certain background, will definitely make the industry more dynamic.

Simply put, whether it is monopoly or price hike, it is because there are too few companies that can provide the "second option". Once there are more competitive options, monopoly will naturally not be possible.

Therefore, from the perspective of consumers and the healthy development of the industry, it is naturally a good thing to have new forces entering the market.

Of course, entering the used car market is not that easy. Whether new forces can gain a foothold in this field is also an issue that entrants need to consider carefully.

Cui Dongshu once said in "Aftermarket: How do used car and auto repair practitioners cope with changes?" "If you want to enter the used car business, I think you should wait. In the second half of the new energy vehicle market, the competition between manufacturers will definitely be more intense, and price wars are inevitable. It will inevitably affect the used car market, and the situation will not be too stable in the short term. If you are already in the industry, be conservative and don't stock up old cars too easily. If you want to sell, sell nearly new cars with a short age and try to sell them as quickly as possible. This may be a better strategy."

Although this is said for new energy vehicles, if you think about it carefully, you will find the meaning behind it. In other words, as the penetration rate of new energy vehicles continues to increase, the used car market is likely to enter the new energy competition stage.

However, used new energy vehicles generally do not have as high a value retention rate as fuel vehicles. In addition, their technology is updated quickly, so one car will not attract users for a long time, which will increase the risk of hoarding cars.

In general, the current used car market still has various chaos. If the new forces are strong enough and have a bottom line, it will be helpful for the healthy and orderly development of this market. As for whether the emergence of new forces will affect the current pattern of the used car market, perhaps we need more time to verify.