China’s secondary electronics market is entering a new phase as younger consumers increasingly embrace second-hand devices amid tighter household budgets and a renewed interest in retro technology. Millennials and Gen Z buyers, once defined by frequent upgrades to the latest Apple iPhone or premium Android models, are now driving a cultural shift that reframes used electronics as both practical and socially acceptable. ATRenew, China’s largest second-hand electronics recycler and trading platform, is positioning itself to capture this behavioural change. According to president and chief financial officer Rex Chen, consumers under financial pressure no longer view used purchases as a compromise, a development that materially expands the addressable market for recommerce platforms.
Underpenetrated resale landscape
Despite its scale, China’s secondary electronics market remains structurally underdeveloped. Only 4 to 5% of consumer electronics currently in circulation are traded through formal resale channels, highlighting significant headroom for growth as policy support and consumer confidence converge. ATRenew held a 9.1% market share in 2023 and is targeting accelerated adoption as market maturity improves. The company’s core user base is largely composed of consumers born in the 1990s, aligning its growth strategy with long-term demographic trends. As acceptance widens, younger users are also reselling a broader range of assets, extending beyond ageing smartphones into categories such as gold and jewellery. ATRenew is scaling its service capabilities accordingly to capture these expanding trade-in flows.
Third quarter results
ATRenew, listed in the USA, posted record Q3 2025 revenues of € 629.7 million, up 27.1%. Net income surged 407.3% to € 11.1 million, while operating income hit € 14.8 million. With 10.9 million products transacted, growth was fueled by supply chain efficiency and China’s circular economy.
Subsidies revive smartphone volumes
Smartphones remain central to recommerce economics. Rising handset prices weighed on demand earlier in the year, but government-backed trade-in incentives have helped restore volumes. Monthly market shipments rebounded from approximately 213 million units in August to over 300 million units by October. Rex Chen expects subsidies to persist, increasing the share of recycled digital devices to 10% within three years from the current 4%. If realised, this would expand the overall market by as much as 2.5 times, materially strengthening supply pipelines for refurbishment, grading, and resale across the value chain.
Crowded competition raises costs
Growth has come with rising competitive pressure. China’s recycling sector remains fragmented, with platforms such as Alibaba-backed GooFish and Tencent- and Xiaomi-invested Zhuanzhuan competing alongside thousands of smaller operators. Customer acquisition has intensified, driving marketing inflation across social media and influencer channels. Zhuanzhuan reportedly spent nearly €200 million on advertising in 2022 and increased spending again this year, prompting rivals to follow suit. ATRenew’s selling and marketing expenses reached €1.2 billion in the first nine months of the year, up 20% year on year, with influencer rates tripling in some cases.
Strategic partnerships and offline trust
ATRenew views competition as structurally healthy, underpinned by its strategic relationship with JD.com, which owns a 34% stake. The partnership provides priority access to ecommerce traffic, with Chen estimating that one in ten Apple iPhones recycled in China passes through JD.com’s ecosystem. Offline presence remains a parallel priority. ATRenew operates 2,195 physical stores and employs around 2,000 staff for door-to-door services, arguing that trust, transparency, and accurate device grading are decisive in value-sensitive transactions. Exclusive arrangements with selected shopping malls further strengthen its physical footprint.
Profitability and cautious expansion
Founded in 2011, ATRenew achieved its first quarterly net profit in the July to September 2024 period. Most recently, the company reported net revenue of €5.15 billion and net profit of €90.8 million, representing year on year growth of 27% and 407% respectively. While mainland China remains the priority, ATRenew is evaluating selective overseas opportunities, including exporting automated testing technology and forming brand partnerships. However, Chen emphasised a conservative approach amid ongoing economic uncertainty, signalling disciplined expansion over aggressive globalisation.
Via: SCMP.com
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Trade-in
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